Medicare Basics
Who Is Eligible for Medicare?
Generally, Medicare is for people 65 or older. You may be able to get Medicare earlier if you have a disability, End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant), or ALS (also called Lou Gehrig’s disease).
When Am I Eligible for Medicare?
You are first eligible to sign up for Medicare starting 3 months before you turn 65 and ending 3 months after you turn 65. If you are already receiving Social Security benefits, you will be automatically enrolled in Medicare Part A and Part B (you won’t need to apply).
What Are the Various Parts of Medicare?
Medicare Part A is hospital insurance that covers inpatient care in: a hospital, skilled nursing facility, nursing home (inpatient care in a skilled nursing facility that’s not custodial or long-term care), hospice and home health care.
Most people don’t pay a premium for Part A coverage. This is sometimes called “premium-free Part A.” You won’t pay a Part A premium if you:
- Qualify to get (or are already getting) retirement or disability benefits from Social Security (or the Railroad Retirement Board).
- Get Medicare earlier than 65.
- Are 65 or older and you (or another qualifying person, like your current or former spouse) paid Medicare taxes while working for a certain amount of time (usually at least 10 years).
If you don’t qualify for premium-free Part A, you might be able to buy it.
Medicare does not cover all costs associated with Part A. Some deductibles apply and then Medicare only covers 80% of associated Part A expenses.
Medicare Part B is medical insurance that covers doctor and other health care providers’ services and outpatient care. Part B also covers durable medical equipment.
You’ll pay a premium for Part B coverage every month, even if you don’t get any Part B-covered services. The monthly premium can change each year and may be higher depending on your income. Most people don’t get a bill from Medicare because they get the premium deducted automatically from their Social Security, Railroad Retirement Board, or Civil Service Retirement check. If you don’t get any of these payments, you’ll get a bill for your Part B premium so you can pay Medicare directly.
Medicare does not cover all costs associated with Part B. Some deductibles apply and then Medicare only covers 80% of associated Part B expenses.
Medicare Part C is a Medicare Advantage Plan (like an HMO or PPO) that is offered by private companies approved by Medicare. If you join a Medicare Advantage Plan, the plan will provide all of your Part A (Hospital Insurance) and Part B (Medical Insurance) coverage. Medicare Advantage Plans may offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs. Most include Medicare prescription drug coverage (Part D).
In general, Medicare Part D is designed to help beneficiaries pay for prescription drugs. It provides coverage for a wide range of medications, including brand-name and generic drugs, vaccines, and some specialized drugs.
Unlike Medicare Part A and Part B (which are administered by the federal government), Medicare Part D is delivered through private insurance companies approved by Medicare. These private insurance plans offer a variety of drug coverage options to choose from.
Beneficiaries who want Medicare Part D coverage typically pay a monthly premium to their chosen Part D plan. The premium cost can vary depending on the specific plan, but it is an additional cost on top of the standard Medicare Part B premium.
Most Part D plans have an annual deductible, which is the amount beneficiaries must pay out of pocket for their medications before the plan's coverage kicks in. Deductible amounts can vary between plans.
A Late Enrollment Penalty may apply if individuals do not enroll in a Medicare Part D plan when they are initially eligible and do not have other creditable prescription drug coverage. Creditable prescription drug coverage is coverage that is at least as good as Medicare's prescription drug coverage.
Medigap plans are private insurance policies that complement Original Medicare by covering some of the costs that Medicare beneficiaries would otherwise pay out of pocket. These standardized plans offer flexibility, peace of mind, and the ability to choose coverage that aligns with an individual's healthcare needs. However, they do not include prescription drug coverage, so beneficiaries may need to enroll in a separate Part D plan for medication coverage. Medigap plans have the following characteristics:
Supplementary Coverage: Medigap plans are sold by private insurance companies and are intended to complement Original Medicare. They help fill the gaps in coverage that Medicare Part A and Part B leave behind, such as deductibles, copayments, and coinsurance.
Standardized Plans: Medigap plans are standardized by the federal government, which means that each plan is identified by a letter (e.g., Plan A, Plan G) and offers the same basic set of benefits, regardless of the insurance company that sells it. However, the premiums may vary from one insurer to another.
Choice of Plans: There are several different Medigap plans (e.g., Plan F, Plan G, Plan N), and beneficiaries can choose the one that best suits their healthcare needs and budget. The level of coverage provided by each plan varies, so individuals can select the plan that aligns with their specific preferences.
No Network Restrictions: Medigap plans typically allow beneficiaries to see any healthcare provider who accepts Medicare, without the need for referrals or network restrictions. This flexibility can be especially valuable for those who travel frequently or have specialized healthcare needs.
Monthly Premiums: Beneficiaries who purchase Medigap coverage pay monthly premiums to the insurance company in addition to their Medicare Part B premium. The premium cost can vary depending on the plan type and the insurance provider.
Guaranteed Issue Rights: There are specific periods, such as the Initial Enrollment Period, when beneficiaries have guaranteed issue rights for Medigap plans. During these periods, insurers cannot deny coverage or charge higher premiums based on pre-existing health conditions.
No Prescription Drug Coverage: It's important to note that Medigap plans do not include prescription drug coverage (Part D). Beneficiaries who want prescription drug coverage must enroll in a separate Medicare Part D plan.
Medicare IRMAA is an income-related monthly adjustment that can increase the premiums for Medicare Part B and Part D for beneficiaries whose income exceeds certain thresholds. The higher your income, the higher the additional monthly premium you may have to pay. It's important for Medicare beneficiaries to be aware of IRMAA and its potential impact on their healthcare costs, especially if they have higher incomes.
Help Affording Medicare
There are several assistance programs available to help individuals and families afford Medicare, particularly for those with limited income and resources. These programs aim to reduce or eliminate some of the out-of-pocket costs associated with Medicare. Here are some of the main assistance programs:
Medicaid: Medicaid is a joint federal and state program that provides health coverage to low-income individuals and families. Eligibility and benefits vary by state, but in many cases, Medicaid can help cover Medicare premiums, deductibles, copayments, and coinsurance for qualified individuals. If you meet your state's income and asset criteria, you may be eligible for both Medicaid and Medicare, often referred to as "dual eligibility."
Medicare Savings Programs (MSPs): Medicare Savings Programs are state-administered initiatives that help low-income Medicare beneficiaries pay for Medicare Part A and/or Part B premiums, deductibles, copayments, and coinsurance. The programs include the Qualified Medicare Beneficiary (QMB) Program, Specified Low-Income Medicare Beneficiary (SLMB) Program, and Qualified Individual (QI) Program. Eligibility criteria and benefits vary by program and state.
Extra Help (Low-Income Subsidy): Extra Help is a federal program that assists Medicare beneficiaries with limited income and resources in affording Medicare Part D (prescription drug coverage). It can significantly reduce the costs of premiums, deductibles, copayments, and coinsurance associated with Part D plans.
State Pharmaceutical Assistance Programs (SPAPs): Some states have their own assistance programs to provide additional help with prescription drug costs. These programs can work alongside Medicare Part D and may offer further discounts on medications for eligible individuals.
PACE (Program of All-Inclusive Care for the Elderly): PACE is a Medicaid program that provides comprehensive healthcare services to eligible individuals, including those with Medicare. PACE programs offer a wide range of medical and social services to help people remain in their communities rather than in nursing homes or other care facilities.
Nonprofit Organizations and Charities: Various nonprofit organizations and charities offer assistance to Medicare beneficiaries in the form of grants, financial aid, or support services. These organizations may help with premiums, prescription drug costs, and other healthcare-related expenses.
State Health Insurance Assistance Programs (SHIPs): SHIPs provide free, unbiased counseling and assistance to Medicare beneficiaries. They can help you understand your Medicare options, apply for assistance programs, and navigate the complexities of Medicare.
To determine your eligibility for these assistance programs and to apply, it's essential to contact your state's Medicaid office, Social Security Administration, or a local SHIP office.
Additionally, you can use the Medicare.gov website or call 1-800-MEDICARE (1-800-633- 4227) to get information about available programs and assistance in your area. The specific eligibility criteria and benefits may vary depending on your income, assets, and the state in which you reside.
Original Medicare consists of two parts: Part A & Part B.
• Part A (Hospital Insurance) helps provide some coverage of inpatient care in hospitals, skilled nursing facilities, hospice and in-home health services. It does not cover all your expenses and requires a deductible. Keep in mind that once the deductible is met, Medicare only covers 80% of your charges for this category.
• Part B (Medical Insurance) helps provide some coverage of services from doctors, specialists and other health care providers; outpatient care; some home health care; durable medical equipment and many preventative services (such as screenings, annual wellness visits/physicals, shots & vaccines). It does not cover all your expenses and requires a deductible. Keep in mind that once the deductible is met, Medicare only covers 80% of your charges for this category.
