Understanding Medicare
We understand your frustration!
Why is Medicare so frustratingly complicated? Supplements, gaps, parts: it’s just too much!
With a little history (for context) and a dose of patience and empathy, we help make it simple.
Medicare vs Insurance
We understand your frustration!
The most challenging thing about Medicare is that the majority of Americans never truly understand our health insurance while we’re working much less when we retire. The reason is simple: in most cases, our employer provides it and has done the hard work of packaging our insurance together. Or you’ve had to shop for insurance on the marketplace and that’s a whole different topic.
The average person goes to work and money comes out of their paycheck for health insurance. Then when they go to a doctor or hospital, they’re asked what insurance they have and pull out a piece of plastic from their wallet. Then they’re asked to pay some more money and often still get a bill in the mail. Frustrating!
Then the magical age of 65 comes around and Medicare shows up! Which means ads, phone calls, government jargon, more ads and phone calls, and the dreaded you must sign up or you’ll get penalized line from everyone. At this point in your life, you’ve typically had health insurance packaged for you from your employer and are now being asked to build a health insurance package with little to no experience. No wonder this creates so much anxiety, confusion, and frustration.
This is where Medicare Advisors of Alabama helps.
Why is Medicare Complicated?
To answer that question we need some background.
Way back in the 1800s and early 1900s people generally paid cash or bartered for care from a doctor when sick. As healthcare started to advance by the 1920s, hospitals began to be a place where Americans could go to have access to more sophisticated treatments and care.
In 1929 a group of Dallas school teachers decided to pool their money together and negotiate with Baylor Hospital and pay a small monthly fee in return for as needed hospital admissions. This concept of having hospital benefits from your employer became very popular and eventually became known as Blue Cross plans.
As hospital systems grew, physicians began to worry hospitals would dictate their pay. So many stopped working directly for hospitals and opened private practices. A group of physicians in Oregon started a company to negotiate with employers to pay a small fee for their employees to have access to their private practices. This concept of medical insurance also became popular and eventually would be called Blue Shield.
It would be several decades later before BlueCross and BlueShield would no longer be two separate companies and merge to form a national association of insurance plans. So from the very beginning, America has had a separation of in–patient hospital benefits and out-patient physician benefits in our health insurance system.
As the decades went on, Americans worked and their employer provided hospital benefits and medical benefits as incentives to take a job. This became known as an employee’s benefit package. However, once someone retired, there was no longer an employer providing health insurance and when those retirees needed medical care, they paid more because they were having to pay full non-negotiated prices.
In 1965, Medicare was passed to provide basic health benefits to retirees 65 years of age and older and later benefits were added for people who were under 65, disabled, and unable to work. The government didn’t invent a new system of health insurance. It just copied what was being done in the private sector. They created hospital benefits known as Part A and outpatient medical benefits known as Part B. This is why we have the two major parts of Medicare, not because the government created it, but simply because circumstances created it over time. It wouldn’t be until the next century that Part C and D would be added.
Today, most people either fill the gaps in Parts A and B with a Medicare Supplement or choose Medicare Advantage instead, and what you pay can depend on your income. Some people also qualify for help paying for Medicare in Alabama.
Need Help Finding the Right Information?
If you’re not sure where to start, or you’d rather talk with someone who can answer your questions, we’re here to help. Our team provides honest guidance and personalized Medicare advice to help you feel confident about your next steps.