Medicare Insurance Terms

Medicare is a national health insurance program designed to be used mostly by senior citizens age 65 or older. Medicare is funded by the federal government, which also handles the benefits for Parts A and B, the original kinds of Medicare plans. Later, Medicare expanded to include two more parts, called C, or Medicare Advantage, and D. Like with most kinds of health insurance, understanding Medicare can be difficult, as there are many conditions, rules and terms you must master before you can take advantage of the program.

Beneficiary

• Anyone who is enrolled in Medicare and receives benefits is a beneficiary. Most Medicare beneficiaries are 65 or older, although some people younger than 65 who have disabilities or certain health conditions may also qualify as beneficiaries.

Dual Eligible

• Medicaid is a program similar to Medicare. It provides low-cost health care benefits to people who meet certain requirements, mostly financial. Medicare beneficiaries who also qualify for Medicaid are called dual eligibles. Dual eligibility is useful for individuals and families because Medicaid helps pay for custodial, long-term care in a nursing facility while Medicare does not. Medicaid also offers more comprehensive health benefits than Medicare does.

Benefits

• Benefits are the ways Medicare assists you with your health care services. Medicare does not offer benefits for every kind of health service, nor does it pay all costs. Part A Medicare has benefits for inpatient hospital stays, some kinds of home health services and hospice care, while Part B has benefits for preventive services, outpatient hospital services and certain vaccinations and health screenings. Part C Medicare, Medicare Advantage, allows users to buy their A and B benefits from private insurance companies, which may throw in additional ones such as vision or dental. Part D Medicare only offers benefits to help pay for the costs of prescription drugs.

Premiums

• Most parts of Medicare require beneficiaries to pay a monthly charge to keep their coverage. These are called premiums. Part A is often premium-free, however. If you are age 65 and you or your spouse has paid 40 quarters, or 10 years, of Medicare taxes, you can receive premium-free Part A. Parts B, C and D have their own premiums, although all parts except A are optional. You will not need both Part C and Part D if your Medicare Advantage plan includes prescription drug benefits.

Co-Payments

• Many Medicare services require that you pay a portion of the cost for the service. These are generally set amounts, such as $20 per doctor's visit or $10 per prescription. Almost all Part B services have a set 20 percent co-payment the beneficiary is responsible for, which is often called coinsurance instead of co-payment since it is a percentage of the cost and not a set amount.