Introduction to Medicare
Are you new to Medicare or interested in finding answers to your Medicare-related questions? Read on to learn more about Medicare, how it works, what it covers if you are eligible, and how you can enroll.
What is Medicare?
Medicare is the federal health insurance program created for Americans who are 65 or older, younger people with disabilities, and people living with End-Stage Renal Disease, including permanent kidney failure requiring dialysis for a transplant. There are different parts of Medicare, as you will find out later.
Medicare History and Statistics
President Lyndon B. Johnson signed the Medicare bill into law in July 1965, allowing people who are 65 and older to access a national healthcare program designed specifically for them.
Medicare started with only Parts A and B, but the coverage has been expanded over the years to include more people. For instance, in 1972, it started covering younger Americans with permanent disabilities. It currently has four parts – Parts A, B, C, and D.
Over 61 million Americans are now included under Medicare. About 12% of the Medicare population is aged 85 or older, while 17% are currently under 65. Medicare took up about 14% of the Federal Spending in 2018 – it is expected to increase to 17.5% by 2027.
Medicare Parts and Coverage
As mentioned above, the Medicare Program has four parts:
Medicare Part A
Part A Medicare is also called “hospital insurance” because it caters to inpatient care. Beneficiaries do not have to pay for inpatient hospital, home health care, hospice care, and skilled nursing facility stays of at least one night.
Part A is free for most people at age 65 since they have paid taxes during their working years to pre-fund the premiums.
Read more on Medicare Part A here.
Medicare Part B
Medicare Part B focuses on outpatient medical coverage. It covers sick visits or trips to your doctor for a checkup or any outpatient care you might get. It also covers specific preventive care, for instance, the annual Wellness exam and preventive care.
It also covers kidney dialysis and cancer therapy, which would be otherwise expensive without supplemental coverage. Part B is not free, and the exact cost is not fixed – it depends on Social Security.
Read more on Medicare Part B here.
Medicare Part C
Medicare Part C is the Medicare Advantage program. It is not free, and the cost differs across carriers, countries of residence, and the type of plan. This part offers Medicare-covered benefits via private health plans. This may also include additional benefits like prescription drug coverage.
Unlike Parts A and B, you do not have to enroll in Part C at Social Security. Prior enrollment in Parts A and B is a prerequisite for enrollment in Part C. However, on enrolling, the coverage comes from the Advantage plan and not from the government.
Read more on Medicare Part C here.
Medicare Part D
This part of Medicare is designed to cover prescription medicines, so it is often called a Pharmacy Card. People aged 65 and above, through Medicare Part D, can enjoy free retail prescription drugs when they choose a preferred carrier and enroll in their drug plan.
There are up to 30 drug plans to choose from – you can determine the best option by asking your agent. You can either have Medicare Part D coverage in your Medicare Advantage Plan or enroll as a stand-alone plan.
Read more on Medicare Part D here.
Medicare vs. Medicaid vs. Medigap Insurance
While Medicare is health insurance targeted at the elderly, Medicaid is a financial and/or healthcare program designed to offer low-income individuals assistance. Both options are for people age 65 and older, and if anyone enrolls in both, Medicaid will be their secondary plan while Medicare will be the primary plan.
Medigap Insurance, on the other hand, is under Medicare as a supplement package. Beneficiaries of Medicare can purchase Medigap to cover out-of-pocket expenses that they would ordinarily pay themselves. Medigap Insurance is only open to people enrolled in Original Medicare – they cannot combine it with a Medicare Advantage Plan.
Medigap beneficiaries will pay a monthly premium plus their normal monthly Part B Medicare premium. The premium for Medigap goes directly to the private insurance company providing the Insurance, while the Part B premium goes to Social Security.
What Medicare does not cover
A few health services and costs are not included under Original Medicare. These include Massage therapy, Long-term care, Dentures, Routine foot care, Acupuncture, Cosmetic surgery, Routine foot care, Dental care (with a few exceptions), Vision exams required for a glasses prescription, and Hearing aids, and related exams.
Medicare also does not cover medical care outside the United States.
Eligibility for Medicare
Anyone who meets one of the following criteria is eligible for Medicare.
– 65 years old legal permanent resident in the United States for at least five consecutive years.
– Under the age of 65 but with amyotrophic lateral sclerosis (ALS) or Lou Gehrig’s Disease, and/or end-stage renal disease (ESRD).
– Under the age of 65 but eligible for the Social Security Disability benefits over at least two years.
Likewise, becoming eligible for Medicare Part A with no premium requires previous payment into the Medicare system, either personally or through a spouse or parent (for a disabled child) who has worked for at least ten years before enrolling in Medicare.
People without a 10-year work history are also eligible for Medicare, but they will have to pay a Medicare Part A premium.
Enrolling in Medicare
Enrollment in Medicare is either automatic or manual.
Automatic enrollments are for people who are already getting Social Security or Railroad Retirement Board benefits (for at least four months before the start date). It is also automatic for people under the age of 65 with a Social Security disability for 24 months and anyone with Amyotrophic Lateral Sclerosis (ALS) or end-stage renal disease.
Manual enrollments are recommended for people who are about to turn 65 or already 65 without getting Social Security benefits. To enroll manually, visit the Social Security website and fill out the online application. Alternatively, you can register at your local Social Security office.
Talk to the Experts
Do you have any questions on Medicare or professional help in choosing the best coverage options for you? Reach out to us today, and we will guide you on the right supplement plan for you.