Learning about Medicare can be incredibly confusing. There is a maze of information out there and sometimes that information can be hard to piece together. In this article, we’ll go through the key concepts of Medicare so you can feel confident in the coverage decisions you ultimately make.
What is Medicare?
Medicare is a federal insurance program that helps seniors and disabled individuals cover some of their health care costs. Medicare was signed into law in 1965 and helps millions of Americans every year. Here’s a breakdown of the different parts:
- Part A: Also known as Original Medicare is offered by the Federal government and covers hospital and inpatient services (inpatient hospital care, long-term hospital care, skilled nursing facility care, hospice care, emergency care, home health services).
- Part B: Also known as Original Medicare is offered by the Federal government and covers Medical Insurance (doctor’s office visits, medical equipment, laboratory services, outpatient services, mental health services, ambulatory services, and some medical supplies).
- Part C: Also known as Medicare Advantage is offered by private insurance companies and includes the same coverage as Original Medicare. Essentially, it bundles up the services provided by A and B into one plan. Plus, most Advantage plans offer additional services like dental, vision, and prescription drug coverage.
- Part D: Also known as Prescription Drug Plans are offered by private insurance companies and help cover your prescription drug costs. Each Part D plan is different and has its own formulary (or list of covered drugs).
You also have the option to add additional coverage with Medicare Supplement plans. Private insurers offer these plans and they supplement your Original Medicare benefits. Sometimes these are also referred to as “Medigap” plans because they fill the gaps in the coverage you receive from Original Medicare (Parts A and B). Read more about Supplement plans here.
What are the different types of coverage options
There are rules around the types of Medicare plans you can be enrolled in at any given time depending on what the plans offer:
Option 1: Original Medicare (Part A and Part B).
Option 2: Original Medicare (Part A and Part B) and add a Medicare Supplement plan to help pay for Original Medicare’s out-of-pocket costs.
Option 3: Original Medicare (Part A and Part B) and add a stand-alone Part D Prescription Drug Plan.
Option 4: Original Medicare (Part A and Part B) and add a Medicare Supplement plan to help pay for Original Medicare’s out-of-pocket costs + add a Part D plan to cover your prescription drug costs.
Option 5: Get your Part A and Part B coverage from a Medicare Advantage plan. You can also get additional coverage including prescription drugs with a Medicare Advantage Prescription Drug plan.
Who is eligible to enroll in Medicare?
You’re eligible to enroll in Medicare if you are:
- 65 or older
- Permanently disabled and receiving Social Security Disability Insurance (SSDI) for at least 2 years
- Under 65 and have Amyotrophic Lateral Sclerosis (ALS)
- Under 65 and have End-Stage Renal Disease (ESRD)
- Over 65 with a disability and have collected social security for 24+ months
How much does Medicare cost?
Medicare Part A: Part A is free if you or your spouse have paid Medicare taxes for 10+ years. If not, you will have to pay a monthly premium.
Medicare Part B:Part B always has a monthly premium that is dependent on your income. It’s also important to know, enrolling in Part B outside of your IEP (Initial Enrollment Period) may result in a late enrollment penalty.
Medicare Advantage: The cost varies depending on what plan you choose but you will pay a monthly premium in addition to your Part B premium. Medicare Advantage plans also come with an out-of-pocket limit. This means once you hit this limit, the carrier will cover the rest of your costs in full for the policy year. The tradeoff could be higher out-of-pocket costs in copays and coinsurance.
Medicare Part D: The cost for Part D plans also vary. If you decide to add on a Part D plan to Original Medicare, you’ll have to pay a monthly premium.
Medicare Supplement: For Medicare Supplement plans, the coverage is greater and tailored to a specific area of care, so the premiums tend to run higher.
When can I enroll in Medicare?
Many people don’t have to do anything to get enrolled in Original Medicare (Part A and Part B). If you’re already receiving benefits from Social Security or the Railroad Retirement Board (RRB), you will automatically be enrolled when you turn 65.
If you’re disabled, you automatically get Parts A and B when you reach your 25th consecutive month of receiving disability benefits.
Once you enroll in Original Medicare, you can decide to add a Medicare Part D Prescription Drug Plan and/or a Medicare Supplement plan. You may also decide to enroll in a Medicare Advantage plan instead of Original Medicare. There are different enrollment periods for these options.
If you’re still confused around what Medicare coverage is right for you, you’re not alone. It takes some time to put all the pieces together! Our licensed insurance agents are available to answer your Medicare questions and can even help you enroll in a Medicare Supplement plan. Call our licensed insurance agents for a free consultation: (855) 888-3333