Medicare is a federal health insurance program designed for persons 65 or older, and those with certain disabilities or diseases. It is important to understand what comprises Medicare, whether you are eligible, when to enroll and whether you will be enrolled automatically, your coverage choices, and how Medicare works with other insurance. Below we gathered the top ten questions we hear most often regarding Medicare.
1. Who is eligible for Medicare?
Medicare is provided for U.S. citizens and permanent residents that meet one or more of the following criteria:
- Age 65 or older and eligible for social security or for benefits from Railroad Retirement
- Have been receiving social security disability income for at least 24 months
- Qualify for disability benefits because of amyotrophic lateral sclerosis (aka Lou Gehrig’s disease)
- Have end-stage renal disease
2. What are the different parts of Medicare?
Medicare covers certain medical services and supplies in hospitals, doctors’ offices, and care facilities. Services are either covered under Part A or Part B. Part C and Part D are coverage options. Understanding what each Part covers is important to making health care and coverage decisions.
- Part A is hospital insurance. It helps cover inpatient care in hospitals, skilled nursing facilities, hospice care and home health care services.
- Part B is medical insurance. Part B helps cover medically necessary services, including doctors’ services and tests, hospital outpatient care, home health services, durable medical equipment, and some preventive services to help maintain health and to keep certain illnesses from getting worse.
- Part C (Medicare Advantage) is an alternate coverage option to Original Medicare. Part C includes all benefits and services covered under Part A and Part B. Part C is run by Medicare-approved private insurance companies and may include extra benefits and services at an additional cost.
- Part D is prescription drug coverage. Part D is optional. Part D helps cover the cost of prescription drugs and is run by Medicare-approved private insurance companies. Part D may help lower the costs of prescription drugs. Part D plans vary in cost and drug coverage.
3. What are my coverage options?
You can choose how to get your Medicare coverage. First, you either choose Original Medicare or a Medicare Advantage Plan.
- Original Medicare coverage includes Part A and Part B with the option to add Part D. It allows the most flexible choice of doctors, hospitals, and other providers. You can purchase supplemental insurance coverage, known as Medigap, to pay for certain out-of-pocket costs not covered by Original Medicare, such as deductibles and copayments.
- As an alternative, you can choose a Medicare Advantage (Part C). This choice includes health plans run by Medicare-approved private insurance companies and is similar to an HMO or PPO. These plans include all services and benefits offered under Part A and Part B of Original Medicare. In most cases, you must also take the drug coverage that comes with the health plan if it’s offered. Additional coverage for vision, hearing, and dental services, in addition to health and wellness programs, may be available. If you don’t join a Medicare Advantage plan, you will have Original Medicare.
Second, you decide if you want prescription drug coverage. Part D can be added to either Original Medicare or a Medicare Advantage Plan. Lastly, if you choose Original Medicare, you decide if you want supplemental coverage known as Medigap. Medigap plans are Medicare Supplemental Insurance Policies offered by private companies. Costs vary by policy and company. Medigap plans are designed to pay for out-of-pocket costs that are not covered by Part A or Part B.
4. What does Medicare cost?
Most individuals who qualify for Medicare receive Part A (hospital insurance) at no cost, as it was likely paid for through Medicare taxes while working. Those who don’t qualify for “premium-free Part A” may buy it through social security; the premium amount depends on an individual’s income. In 2015, individuals with less than 40 quarters of Medicare-covered employment and are not otherwise eligible for premium-free hospital insurance pay $407 month for coverage. Part B (medical insurance) premiums are paid monthly, and most beneficiaries are charged a standard premium amount. In 2015, beneficiaries paid an average of $104.90 a month for Part B coverage. Part C, Part D and Medigap plans vary by plan.
5. How do you enroll?
Some individuals are automatically enrolled. The following individuals are automatically enrolled in Medicare Part A and Part B: those who are 65 years old and who currently receive social security benefits or benefits from the RRB, those who are under 65 who receive disability benefits from social security or from the RRB for 24 months, and those who have ALS. If you are automatically enrolled, a Medicare card will be mailed to you three months before your 65th birthday or three months before your 25th month of disability benefits. You can decline Part B coverage before the date it takes effect.
You must take action to enroll in Medicare if you do not receive social security or RRB benefits when you turn 65 or you have end-stage renal disease.
6. When do you enroll?
If you are not automatically enrolled, you can sign up during the initial enrollment period. The initial enrollment period is a 7 month window beginning 3 months before your 65th birthday, includes the month you turn 65, and ends 3 months after your 65th birthday. In most cases, if you don’t sign up for Medicare when you are first eligible, you will have to pay a late enrollment penalty. If you or your spouse are still working and are covered by employer-provided health insurance, you can keep your current plan and sign up without penalty at a later day. Talk to your employer about how your current health plan coordinates with Medicare.
7. How do you enroll?
You can complete your Medicare application in one of three ways:
- Online at https://secure.ssa.gov/iCLM/rib
- By printing the form and bringing it to your local social security office
- By phone or in person at any social security office
8. How does Medicare work with other insurance?
When you have other insurance (such as employer provided group health insurance), there are rules that decide whether Medicare or your other insurance pays first. Work with your employer to understand when Medicare will pay first and/or pick up any costs your primary insurer didn’t cover.
9. What are some examples of items not covered by Part A or Part B?
The following items and services are not covered by traditional Medicare:
- Cosmetic surgery
- Hearing aids
- Long-term care
- Routine dental care
- Vision care
Note that certain dental and vision care services are covered by some Medicare Advantage providers.
10. How can I make future changes to my coverage?
You don’t have to sign up for Medicare each year. However, each year you do have a chance to review your coverage and make any needed changes. Open Enrollment runs from October 15th through December 7th. During this time you should compare our coverage options and see if any changes are warranted. Medicare health and drug plans can make changes each year that may impact your decision. It is important to know how those changes will affect your coverage for the following year. If you make a change, new coverage will begin on January 1.
Source: Medicare & You, 2015, Centers for Medicare and Medicaid Services. http://www.medicare.gov/pubs/pdf/10050.pdf