Medicare is a health insurance program administered by the federal government, providing health insurance coverage to people who are 65 years of age or older, under age 65 with certain disabilities and at any age with End-Stage Renal Disease (ESRD – permanent kidney failure requiring dialysis or a kidney transplant). Medicare is broken down into four main categories:
MEDICARE Part A (Hospital Insurance)
You are entitled to receive Medicare Part A on the first day of the month you turn 65. In most cases, it's free. You usually won't pay a premium for Medicare Part A if you or your spouse paid Medicare taxes for at least 10 years while working. In most cases, you will automatically be signed up for Part A. If you haven’t met the requirements for Part A you may be able to buy Part A for a premium.
- In-patient care in hospitals (such as critical access hospitals, inpatient rehabilitation facilities, and long-term care hospitals)
- In-patient care in a skilled nursing facility (not custodial or long-term care)
- Hospice care services
- Home health care services
- In-patient care in a Religious Nonmedical Health Care Institution
You will automatically get Part A if you already receive benefits from Social Security or from the Railroad Retirement Board (RRB). If you aren't getting Social Security benefits (for example, if you are still working), you may need to sign up for Part A, even if you are eligible to receive part A at no cost.
MEDICARE Part B (Medical Insurance)
Part B coverage offers medically necessary doctor’s services, outpatient care and most other services that Part A does not cover. These may include physical or occupational therapies and some home health care services. Part B also covers some preventive services. Though many services and products are covered, keep in mind that Part B is still not a complete insurance coverage plan. Original Medicare (Part A and Part B) covers many health care services and supplies; however, there are many costs (“gaps”) it doesn’t cover.
- Office visits to a primary care physician or a specialist
- Some preventive services, such as flu shots and mammograms
- Laboratory costs, including blood work and X-rays
- Medical equipment, such as wheelchairs and walkers
- Outpatient physical therapy
- Mental health care
- Ambulance services
- One initial physical exam within the first 12 months of enrollment
If you already get benefits from Social Security or the Railroad Retirement Board (RRB), you may be enrolled automatically in Part B, effective the first day of the month in which you turn 65. You also may be eligible for Part B if you are disabled, or, in certain situations, if you have end-stage renal disease (ESRD). Be mindful, however, that if you don't sign up during your initial enrollment period, you may have to pay a late enrollment penalty. Medicare Part B premium levels are set each year by the Centers for Medicare & Medicaid Services (CMS), and vary based on your annual income. If you choose only Original Medicare, you pay an annual deductible, after which Medicare will begin to pay for Part B services.
MEDICARE Part C (Medicare Advantage)
Medicare Part C is a combination of your Part A and Part B options and must cover at least all of the services that Original Medicare covers (Part A and Part B). One difference is that private insurance companies that are approved by Medicare provide this type of coverage. Part C is often a lower out-of-pocket risk alternative to the Original Medicare Plan, and usually provides extra benefits such as vision, hearing, dental, and/or health and wellness programs and may include prescription drug coverage (Part D). Part C plans often have networks in which you must use the doctors or hospitals that are contracted with the plan. Costs for items and services vary by plan and by insurance company. Medicare Advantage plans have several plan types available.
MEDICARE Part D (Prescription Drug Coverage)
Part D is a prescription drug coverage insurance offered by private companies, approved by Medicare. Except for certain situations, you should enroll in Part D when you first become eligible to avoid penalties. Part D was designed to aid people with Medicare, lower their prescription drug costs and to protect against future costs. This prescription drug plan will allow you to have access to medically necessary drugs. Keep in mind some Part D plans have a coverage gap (or the “donut-hole”). This means that after you and your plan have spent a certain amount of money for covered drugs; you have to pay all costs out-of-pocket for your drugs up to a limit. Your yearly deductible, your coinsurance or copayments, and what you pay in the coverage gap all count towards this out-of-pocket limit. The limit doesn’t include the drug plan’s premium.