Our goal is simple…break down the world of California Medicare options into easy and straight forward language so that California seniors can make an informed decision about their options. That\’s it. Towards this goal, we plan on looking each aspect of both traditional Medicare and California medigap options as well as the general landscape out there for a top-down view of the market. Getting back to the components of Medicare, we\’ll need to cover what makes up Traditional Medicare. Part A is really the first place to start so let us begin there. Back to the basics with Medicare part A.

Keep in mind that original Medicare is an old program and much has changed. Originally, Medicare was thought of to address the very large medical bills of that period which primarily concentrated on hospital costs. We really mean the vast array of facility based care but we\’ll just call it hospital care for now. Most of the the sophistication and breadth of this type of care is more recent so back then, hospital were the main aspect of this care. Part A was created to address this hospital component of health care.

Part A is the section of Medicare that deals with hospital related costs and California Medicare supplements need to account for two main holes in the coverage. First, you have a deductible that goes up annually in conjunction with inflation. This deductible amount can be found on our California Medicare deductible page. Unfortunately, this deductible amount will likely increase over time so keep this in mind. The second component that California Medigap plans need to address is the co-insurance amount. Once the Part A deductible is met, you will pay 20% of the remaining charges indefinitely. All the core California Medigap supplement plans cover this 20% co-insurance which is probably the most critical \”gap\” to fill since there is no cap on this cost sharing. You don\’t want to be left holding the 20% bag of a $10K bill. Again, your standard Medigap plans in California will cover the Part A deductible and Part A co-insurance in full.

How is Part A paid for by Californians? For the time being (we\’ll talk about this later), you should not have to pay a monthly premium for your California Part A coverage. The funding for Part A has occurred during the course of your working life in the form of payroll taxes. In theory, this money has been at a surplus and \”invested\” but a great deal of the Medicare funding has been used by every Congress since the Apollo program to fund general obligations with IOU\’s attached. This will obviously pose a problem now that the outflow of benefits is greater than the inflow of payroll tax. This brings us back to our no premium caveat above. There is currently talk of making part A means tested for California Medicare which means that you will share Part A costs based on your income level. Obviously there will be political push back on any weakening of Medicare but it\’s definitely in flux.

Hopefully, we\’ve touch based on Part A as is pertains to California Medicare supplement shoppers with sufficient detail. Of course, we\’re always here to help you with any specific questions and we\’ll continue to add to our California Medicare Learning Center with weekly articles to empower you further.

Dennis Jarvis is a licensed insurance agent concentrating on California Medicare supplement insurance.