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Understanding Medicare as Easy as A, B, D?

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Associate Care Manager Gregory Peebles is a Certified Senior Advisor (CSA), Certified Dementia Practitioner (CDP), and trained Medicare Counselor, whose work focuses on helping aging adults and folks with limited independence by providing resources and support to help them discover and lead their best life. Gregory has been a part of CCM, Inc. for over a decade. – Charlotte

This is the first installment in a three-part series to help clear up some common misconceptions about Medicare. Medicare isn’t intentionally confusing, but with all the cross-talk surrounding Medicare, even if understanding it isn’t as intuitive as “1,2,3”, it’s at least as easy as “A, B, D.”

As a care manager, I know first-hand that there are lots of people with the wrong idea that Medicare is a cheap, single-payer, universal care package for US citizens who have retired from the work force. There is a fantasy at work in the minds of many Americans that once they have “paid their dues” and transition into retirement that their medical concerns will be easier to manage, and that all care is covered.

Unfortunately, folks who have enrolled in a Medicare plan and those helping to coordinate their care already know that this is only partially true. While Medicare, our government-subsidized health insurance program for adults 65 or older, is somewhat simpler to manage because it is a single-payer service, it has changed significantly since its implementation. But the real shock to many is that coverage was never meant to be universal.

Medical providers who agree to take Medicare “assignments” agree to maximum prices able to be charged for services. This does keep costs down, and Medicare pays 80% of those contracted prices; however, service receivers are expected to pay the remaining 20% of costs, not including prescription drugs. When the source of payments is a fixed income, that income gets spent very quickly on covering the “gap” that Medicare does not pay. So, while Medicare may be inexpensive in comparison, it is still rarely easily afforded by those who use it.

What Medicare was designed to be is a program to help offset medical costs for aging adults. It was consequently split into two broad categories – Medicare Parts A and B – which correspond to two primary methods of treatment. Part D, added later, supplemented Original Medicare as the trend for prescriptions for aging adults increased.

  • Part A – [Original Medicare]  Covers in-patient stays (including hospital stays, or stays in rehab facilities, etc.)
  • Part B – [Original Medicare]  Covers physician visits (including PCP visits, or referrals)
  • Part D – [Addenddum under the Medicare Modernization Act of 2003] Covers select prescription drugs.

These broad categories do cover the bulk of what we would call internal medicine, yet there are surprising omissions in coverage, which we’ll talk about next time.

Another consideration for those about to transition to Medicare is that the program is not one-size-fits-all; rather, it can be individualized (within limits) to the patient’s needs. Much like traditional insurance, if the selected plan is not optimal for the patient, parts of the plan can be modified during open-enrollment periods. We’ll talk about this, too, when we fill in another “gap” and talk about Medicare Part C.

Charlotte Bishop is an Aging Life Care Advisor, Geriatric Care Manager and founder of Creative Care Management, certified professionals who are geriatric advocates, resources, counselors and friends to older adults and their families in metropolitan Chicago.  She also is the co-author of How Do I Know You? A Caregiver’s Lifesaver for Dealing with Dementia.

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