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Overview

Medicare is one of the biggest and most popular federal government programs. With 62 million members it is providing health insurance for 15% of the U.S. population, specifically the disabled and those 65 years and older. Like most of healthcare, it can be complicated. There are many flavors of Medicare. Depending on where you live, there could be as many as 30+ options or as few as two or three. It also is comprised of multiple parts, each providing coverage for a different aspect of your health care – basic coverage, enhanced coverage and drugs.

Those over 65 years of age who don’t have health insurance through their company or a spouse are required by law to have Medicare. The good news is that the program is very comprehensive and provides excellent cost-effective health insurance. Whether you are currently eligible for Medicare, or will be at some point in the near future, the information on these pages will provide you with clarity and direction.

Am I right for this?

Basic Medicare (Parts A and B) is required if you are over age 65 and don’t have health insurance through an employer or spouse. Additional coverages are optional.

Components of Medicare

  • Original Medicare (also called Parts A and B) – Provides basic coverage at 80%.
  • Medicare Part D – Provides prescription drug coverage at a percent of between 75%-100% depending on the drug and the plan you’re on.
  • Medicare Supplemental plans (also called Medigap) – Covers the additional 20% after Original Medicare. Especially useful if you travel a lot.
  • Medicare Part C (Medicare Advantage) - The private portion of Medicare sold through insurance companies typically covering more services.

Common health services not typically covered by Medicare Parts A and B (Original Medicare)

  • Long-term care
  • Most dental care
  • Eye exams related to prescribing glasses
  • Dentures
  • Cosmetic surgery  
  • Acupuncture  
  • Hearing aids and exams for fitting them
  • Routine foot care

Possible benefits for Medicare Advantage plans (depending on locations; cost and range of benefits vary widely from plan to plan)

  • Vision
  • Dental
  • Hearing
  • Transportation
  •  Fitness benefits
  •  Worldwide emergency
  • Telehealth
  •  Over-the-counter drugs
  •  In-home support
  •  Home safety devices and modifications
  •  Emergency response device

Ways to buy Medicare coverage

  • Health insurance broker
  • Online
  • Medicare Navigator
  • Medicare.gov

Q&A

Here are questions and answers that address common issues and concerns related to Medicare.

Question

What’s covered in basic Medicare?

Answer

The federal government provides Part A and Part B, also known as Original Medicare. In general, Original Medicare pays for 80% of covered health care costs. It's up to you to pay the remaining 20% or to have a Medicare Supplement plan. Original Medicare doesn't cover most prescription drugs or other benefits such as vision, dental, or hearing services. For those items you would need to sign up for supplemental coverage.

Question

What does Medicare Part A cover?

Answer

Covers many inpatient or intensive services including hospitalization, hospice, and some home health — as well as limited stays in a skilled nursing facility.

Question

What does Part B cover?

Answer

Covers medically necessary services outside the hospital like doctors’ services and tests, outpatient care, durable medical equipment, and other medical services. Part B also covers some preventive services.

Question

What about Part C or Medicare Advantage?

Answer

Health insurance companies provide Medicare Advantage plans that are regulated by the government. These plans are sometimes referred to as an "all-in-one" option. They combine Original Medicare services with benefits such as vision, dental, hearing, or prescription drug coverage.

These Medicare Advantage plans don't replace Part A and Part B. You still need to enroll in Original Medicare before you enroll in a Medicare Advantage plan.

Consider this option is you desire a lower monthly premium and are comfortable paying copays and deductibles for health care services within a limited provider network or if you want prescription drug coverage and extra benefits (dental, vision, hearing, etc.) However, under Advantage plans you are limited in your choice of doctors and other medical providers. It also may require prior authorization for treatment.

Question

What is Medicare Supplement?

Answer

Medicare Supplement (Medigap) is made available through private health insurance companies, although they are regulated by the government. Medicare Supplement plans help pay your share of health care costs, such as copays, coinsurance, and deductibles. They also have their own monthly premium. Consider this option if you are comfortable paying higher monthly premiums to limit out-of-pocket costs and want the freedom to access doctors/hospitals throughout the U.S.

Question

What is Part D?

Answer

Part D prescription drug plans (PDPs) are stand-alone optional plans that help pay for medications you buy from a pharmacy or through a mail-order pharmacy service. PDPs have their own monthly premium, plus a yearly deductible, copays, and coinsurance.

Question

When and how should I enroll in Medicare?

Answer

Most people become eligible to sign up for Medicare 3 months before and up until 3 months after their 65th birthday. As you near 65, you should ask yourself "Do I need Medicare coverage right now?" If you plan to make Medicare your primary source of health insurance, you should enroll in Part A and Part B as soon as you become eligible and start considering the additional options we've covered.

The annual enrollment period for Part D and Advantage programs runs from October 15 to December 7 each year.

Question

At what point can I sign up for Medicare Supplement coverage?

Answer

Any time up to six months prior to your Medicare start date – you must be enrolled in Original Medicare in order to do so. Part D and Medicare Advantage must be signed up three months before or 3 months after you start Medicare, if you start Medicare on your 65th birthday.

Question

How much does Medicare cost?

Answer

It depends on the plan, supplements you choose and your income level. Basic Medicare that is required by law typically costs approximately $170.10 for most people.

Question

Will Medicare be better than what I have with my current coverage through my company?

Answer

It depends on your current coverage and your health condition, but when you consider what Medicare covers, the premiums and deductibles associated with it, generally speaking Medicare will be as good or better than the average private healthcare coverage.

Question

How do I pay for Medicare?

Answer

Most plans allow you to pay via typical methods – direct payment, ACH, and EFT (for private coverage via Advantage) However, premiums are automatically deducted from monthly Social Security checks if you are on Social Security.

Question

If I have coverage through my company or a spouse, can I opt to get Medicare instead if I prefer it?

Answer

Yes.

Question

What’s the link between Social Security and Medicare?

Answer

The cost to Social Security does not pay for your Medicare premiums, but if you receive Social Security payments, your Part B premiums will be deducted from your Social Security check. You’ll automatically be enrolled in Medicare if you’re already receiving Social Security retirement at age 65. The Social Security Administration (SSA) will also determine the amount you need to pay (have withdrawn from your Social Security payment) for Medicare coverage.

Question

What is the difference between Medicare and Medicaid?

Answer

Medicaid is a fully state and federally funded healthcare insurance program that compliments Medicare but is available only to people with limited income. You must meet certain requirements to be eligible for Medicaid. However, if you are over age 65 and have limited means, you can be enrolled in both Medicare and Medicaid at the same time.

Additional resources

Next steps:

Step 1

Determine if you will have private insurance through your employer or spouse once you turn 65.

Step 2

Spend some time on www.medicare.gov to get familiar with the details.

Step 3

Do an assessment of your health situation, including medical and drug needs, both now and anticipated in the future.

Step 4

Talk to friends or relatives who are on Medicare and learn from their experience about how to apply and what levels of coverage to get.

Step 5

Consider engaging the services of a Medicare broker or Medicare Navigator.

Step 6

Review your options for additional coverage and browse plans.

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