How Traditional Medicare Works
Medicare is basic health care insurance provided by the government for people who qualify due to age (currently age 65), a disability or end-stage renal (kidney) disease (ESRD). It is offered in three parts:
- Part A is hospital insurance. For people who have worked in Social Security covered employment and paid Social Security and Medicare taxes for a number of years, no premium is required for this coverage. It covers most of the cost of a hospital stay and other institutional care after the Part A deductible, which applies to each “spell of illness” as defined by Medicare, is paid.
- Part B is medical insurance. After you pay the annual Part B deductible, Medicare will pay 80% of the cost for the covered services of Medicare participating doctors; it will pay 100% if the doctor accepts assignment from Medicare. You will pay for Part B through monthly premium payments deducted from your Social Security check if you are drawing Social Security payments; otherwise, the Social Security Administration will bill you quarterly.
- Part D is prescription coverage. Because MILA provides prescription benefits which are at least as good if not better than the prescription benefits provided through the Part D programs, you should not join a Medicare Part D program unless you elect coverage in a Medicare Advantage Plan.
