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What is Medicare?
Your guide to the federally funded health insurance program.
Medicare is a health insurance program administered by the U.S. Government. By setting approved amounts for healthcare services, it provides affordable coverage to seniors (ages 65+) as well as younger Americans with certain disabilities.
Medicaid is also federally funded but it is not the same as Medicare. Medicaid is intended to help low-income individuals regardless of age. This is a primary difference between Medicare and Medicaid; there are no income limits with Medicare. Some people qualify for both programs. If this is the case, Medicare coverage is the primary insurance and Medicaid is the secondary.
Understanding the Different Parts of Medicare
There are four parts of Medicare: A, B, C and D. Parts A and B are usually grouped together and referred to as “original” or “traditional” Medicare. Doctor visits, hospital stays and prescription medications are covered by different parts.
Medicare Part A: Hospital/Hospice Insurance
Medicare Part A covers inpatient hospitalization, as well as short-term care in a transitional rehabilitation center or skilled nursing facility following a hospital stay of two nights or more. (Long-term care is not normally covered by Medicare.) Coverage also extends to prescribed home health services that may include:
Intermittent visits from health aides or registered nurses
Physical and/or occupational therapy
Speech-language pathology services
A social worker at the healthcare facility usually coordinates home health services ordered by the attending physician and can further explain Part A as it pertains to your specific situation.
Who Is Eligible for Medicare Part A
American citizens become eligible for Medicare coverage at the age of 65; permanent residents are usually eligible at the same age. Those younger than 65 may also qualify:
After collecting Social Security Disability Insurance for 24 months.
As soon as receiving Social Security Disability Insurance for amyotrophic lateral sclerosis (commonly referred to as ALS or Lou Gehrig’s disease).
On the first day of the first month you start home dialysis for end-stage renal disease, or on the first day of the fourth month you receive dialysis at a medical facility.
Hospital services do not have to be related to the disability to be covered.
Costs Associated With Part A
Medicare Part A is premium-free if you or your spouse worked and contributed to Medicare taxes for more than 10 years. Similarly, there are no monthly premiums for those with qualifying disabilities. The monthly cost of Medicare Part A for those who are not eligible for free premiums varies based on how many calendar quarters Medicare taxes were paid. Everyone with Medicare Part A coverage is required to pay deductibles on hospital stays.
When to Sign Up for Medicare Part A
Those who are already receiving Social Security or Railroad Retirement Board benefits are automatically enrolled in Medicare. The Medicare card is mailed on the 25th month of disability or three months before your 65th birthday.
If you aren’t receiving Social Security or Railroad Retirement Board benefits yet, the Initial Enrollment Period for Medicare is seven months long. It begins three months prior to the month of your 65th birthday and extends three months after.
It’s important to sign up even if you are still working and covered under a company insurance plan. If you miss your Initial Enrollment Period, there is a penalty.
Certain circumstances impact the timing of eligibility and enrollment, like living outside of the United States or having a Health Savings Account. Contact the Social Security Office in your area for more information on such situations.
You do not have to sign up for Medicare each year. During the annual General Enrollment Period, however, you have the chance to review your coverage and make changes to your plan if desired. General Enrollment Period for Part A runs from January 1 through March 31.
How to Sign Up for Medicare Part A
If you weren’t automatically enrolled, the easiest way to sign up for Medicare is on the Social Security website. It takes about 10 minutes to fill out the online application. No signature is required to apply.
Or, call 1-800-772-1213 (TTY users can call 1-800-325-0778) to sign up. Current or former railroad employees should call the Railroad Retirement Board at 1-877-772-5772.
Medicare Part B: Medical Insurance
Medicare Part B coverage includes outpatient medical services and supplies deemed necessary for the prevention, diagnosis and treatment of health conditions. The policy pays a set amount for:
Durable medical equipment
Employer policies may cover the same things as Medicare Part B. Learn more about whether you need Part B here. Or, call a SeniorLeaf consultant at 1-833-MY-SENIOR to get answers.
Who Qualifies for Medicare Part B
Eligibility requirements are the same for Part A and Part B.
Costs Associated With Part B
Most people qualify for the standard monthly premium of $144.60 (2020), but the amount may be more dependent on the adjusted gross income reported on previous IRS tax returns. The monthly premium for Medicare Part B can be deducted from your Social Security check. If you don’t receive benefits, you will be billed for the amount due. Expect to pay annual deductibles and coinsurance in addition to the premium.
When to Sign Up for Medicare Part B
The Initial Enrollment Period for Medicare Part B is the same as Part A. Since there is a cost associated with Part B, however, many people opt out of it while they are still covered by an employer’s health insurance plan. When you or your spouse stops working, you can enroll in Part B within eight months after your coverage ends without incurring a penalty. This is known as the Special Enrollment Period.
How to Sign Up for or Drop Part B
As with Part A, the simplest way to sign up for Part B if you weren’t automatically enrolled in Medicare is by filling out the online application on the Social Security website. You can also call 1-800-772-1213 (TTY 1-800-325-0778).
If you were automatically enrolled in Medicare and want to drop Part B, follow the instructions that were included with the card and return it. Keeping the card means you’re keeping Part B.
If you enrolled in Medicare through the Social Security Administration, you are required to submit a signed request to drop Part B. Contact the Social Security Office in your area for more information.
Medicare Part C: Medicare Advantage Plans
Medicare Part C offers an alternative to traditional Medicare. It combines coverage from Medicare Part A and B, and sometimes Part D, into a single plan provided by a private insurance company approved by Medicare. All plans are completely optional and have the same basic level of coverage as traditional Medicare, but Part C may offer additional benefits relating to vision, hearing and dental coverage, as well as prescription medication.
Types of Medicare Advantage Plans
Before signing up for one of the Medicare Part C plans, it’s important to understand the different types and compare them to find the one that best fits your needs. Unlike traditional Medicare, you cannot go to any provider if you have Part C. You must follow the rules set by the insurers.
Health Maintenance Organization: HMOs are typically less expensive than other types of Medicare Advantage Plans because they have contracted networks of healthcare professionals and facilities that provide services at discounted rates. Unless it is an emergency, HMOs generally do not pay for care outside of the network. Primary care physicians are required and you usually have to get a referral from your physician to make an appointment with a specialist.
Preferred Provider Organization: PPOs also have a contracted network. It’s less expensive to use providers within the network, but you aren’t required to do so. Referrals are not required to see a specialist which often makes it possible to get more timely treatment than with an HMO.
Private Fee-For-Service: A PFFS differs from other types of Medicare Part C plans by setting its own payment structure rather than using Medicare’s rates; some services could be more, others less. Most PFFS plants don’t have a network; you can see any doctor that accepts the plan’s payment terms.
Special Needs Plan: SNPs are tailored to the specific needs of those with severe health conditions including but not limited to chronic heart failure, dementia, end-stage renal failure, chronic lung disease, neurologic disorders, etc. The corresponding networks include more specialists for that particular health condition and the plan’s drug formulary is designed to cover the medications used for its treatment. Unlike other plans, SNPs allow enrollment at any time.
Perform an online policy search through Medicare.gov for more specific information on plans available in your area. Or, call a SeniorLeaf consultant at 1-833-MY-SENIOR for assistance.
Who Qualifies for Medicare Part C
Those who have already both Medicare Part A and B are eligible for enrollment in a Medicare Advantage Plan.
Costs Associated with Part C
The cost of Part C varies by plan. In addition to your monthly premium, there may be deductibles, copays and other out-of-pocket expenses. Depending on the plan you select, the coverage cost could be more or less than traditional medicare. It’s important to note that you still have to pay the monthly Part B premium when you participate in a Medicare Advantage Plan.
When to Sign Up for Medicare Part C
Open enrollment for Medicare Advantage Plans runs from October 15 through December 7 each year. You can also sign up during your Initial Enrollment Period or Special Enrollment Period.
How to Sign Up for Medicare Part C
Visit the provider’s website for the plan you want to enroll in. You may be able to fill out an online form to join or you may need to fill out a paper application. Either way, you’ll need your Medicare number as well as the date your Part A and Part B coverage began. This information is on your Medicare card.
Medicare Part D: Prescription Drug Plans
Medicare Part D offers optional coverage for prescription medications. It is intended to supplement original Medicare and Medicare Advantage Plans that don’t already include drug coverage. Prescription Drug Plans are administered by private insurance companies approved by Medicare.
Costs Associated With Part D
Coverage and costs of prescription medications vary by plan. In addition to a monthly premium, expect to pay an annual deductible, co-pays and/or coinsurance. Depending on which plan you choose, you may be able to reduce out-of-pocket expenses by using mail-order pharmacies or filling prescriptions with generic brands.
Some pharmaceutical companies offer financial assistance for those enrolled in Medicare Part D. Use this link to search by drug name. Many states and territories also have assistance programs to help you save money. If you have both Medicare and Medicaid, you automatically qualify for Extra Help, a program designed to lower prescription costs.
Who Qualifies for Medicare Part D
You must have Medicare Part A and B to enroll in a prescription drug plan.
When to Sign Up for Medicare Part D
You can join a Prescription Drug Plan during your Initial Enrollment Period or Special Enrollment Period. Though Part D is optional, you may incur financial penalties later on if you choose not to sign up during your Initial Enrollment Period. If you need to make changes to your plan, open enrollment runs from October 15 through December 7 each year.
How to Sign Up for Medicare Part D
Once you’ve compared plans on the Medicare website, you enroll through the policy provider. You may be able to fill out an online form on the provider’s website or you may need to contact them and fill out a paper application. Be sure to have your Medicare card handy; you’ll need your Medicare number as well as the date your Medicare Part A and B coverage began.
Please note: If your Medicare Advantage Plan includes prescription drug benefits and you sign up for a Prescription Drug Plan, you will automatically be dismissed from Part C.