As one can expect from such a large program, Medicare can be quite complex and loaded with details, restrictions, conditions and terms.
We’re here to cut through the fine print and outline the basics of Medicare coverage in a clear and easy-to-understand way.
What is Medicare?
Medicare is a federal health insurance program for seniors and some younger people who have certain disabilities or conditions. The program is primarily funded by Medicare payroll taxes.
What does Medicare cover?
Medicare covers a wide range of medical services, treatments, preventive care and medical devices. Everything from a routine physical examination to certain surgeries to certain prescription drugs may be covered by Medicare.
You may download a free copy of Medicare & You 2019, which details what is covered by Medicare.
Who is eligible for Medicare coverage?
In order to be eligible for Medicare, you must be at least 65 years old and a U.S. citizen (or a permanent legal resident for at least five years).
If you can check both of those off the list and have paid sufficient Medicare taxes while working, you may get the added bonus of not having to pay a premium for Medicare Part A (we’ll explain more about the different parts of Medicare below).
There are some circumstances under which you could potentially qualify for Medicare if you are under the age of 65. If you have been collecting disability benefits from Social Security or the Railroad Retirement Board for two years, you can qualify for Medicare regardless of your age.
You can also qualify if you have kidney failure (End Stage Renal Disease, or ESRD) or ALS (Lou Gehrig’s disease).
What are the parts of Medicare?
Medicare is made up of four main parts.
- Part A
Part A is hospital insurance and provides coverage for qualified inpatient care at hospitals and other inpatient providers, such as skilled nursing care facilities. It also covers hospice care and limited home health services. - Part B
Medicare Part A and Part B together are called “Original Medicare.” Part B is medical insurance and provides coverage for qualified doctor’s appointments, preventive care, therapy and a range of other outpatient care and services.
Part B also includes coverage for medical equipment such as wheelchairs or diabetes supplies. Part B is optional, but is required if you want to enroll in a Medicare Part C plan or Medicare Supplement Insurance. - Part C
Part C is also known as “Medicare Advantage.” These optional plans can be used to replace Medicare Part A and Part B while offering all the same benefits combined into one privately-sold plan.
Many Medicare Advantage plans may offer additional benefits that are not covered by Parts A or Part B, such as dental, vision, hearing and prescription drug coverage. - Part D
Part D provides coverage exclusively for prescription drugs. Medicare Part D plans are optional and are used in conjunction with Part A and Part B, or with a Medicare Advantage plan that does not provide coverage for prescription medication.
Many Medicare beneficiaries may also have the option of enrolling in a Medicare Supplement Insurance plan, also called Medigap.
These optional plans don’t offer coverage for medical services, but they can help pay for some of the Medicare deductibles, coinsurance and other out-of-pocket expenses that Medicare beneficiaries may incur.
Medicare Advantage plans, Medicare Part D plans and Medigap plans are sold by private insurance companies. Plan availability, benefits and costs may vary.
How much does Medicare cost?
There are three main types of expenses associated with Medicare.
- Premiums
A premium is the amount that you pay each month to belong to a Medicare plan. Each part of Medicare typically has its own premiums.
Most beneficiaries qualify for premium-free Part A. If you pay for your Part A benefits, you could pay up to $437 per month in 2019.
The standard Part B benefits in 2019 is $135.50, though you could pay more depending on your income level.
Some Part C plans offer $0 premiums. $0 premiums plans may not be available in all areas, however, so it’s important to check with a licensed insurance agent to compare the plans that are available where you live. - Deductibles
The deductible is the amount that you must pay out of your own pocket for covered health care before your Medicare plan begins to cover your services.
In 2019, the Medicare Part A deductible is $1,364 per benefit period.
The 2019 Part B deductible is $185 for the year.
Some Part C and Part D plans may feature $0 deductibles. - Coinsurance or copayments
Coinsurance or copayments represent the amount that you must pay after meeting your deductible. Coinsurance is typically structured as a percentage of the cost, while a copayment is most often a flat fee.
Coinsurance and copayments can vary widely depending on the type of Medicare plan you have.
Where can I use Medicare?
Medicare is accepted all over the U.S. and U.S. territories.
Medicare Part A, Part B and Medigap plans are accepted by the majority of health care providers.
Part C and Part D plans typically include networks of participating providers who accept the plan's terms and conditions.
How do I enroll in Medicare?
There are certain times of the year in which you may sign up for Medicare coverage, and the different parts of Medicare each have their own timelines and rules for enrolling.
If you don't enroll in Medicare Part B or Part D when you first become eligible, you may be subject to late enrollment penalties.
For help with enrolling in Part A or Part B, you can contact the Social Security Administration.
To get more information on Medicare Advantage plans and benefits that may be available in your area, call to speak with a licensed insurance agent today.
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