Health insurance can be complicated and difficult to understand, and Medicare is no exception. In this article, we’ll tell you everything you need to know about what Medicare is and how and when you can enroll in these government-backed health insurance programs.
What Do You Need to Know?
- What is Medicare?
- Who is eligible for Medicare?
- What are the different parts of Medicare?
- When can you enroll for Medicare?
- How much does Medicare cost?
- How does Medicare work with other insurance plans?
- What is Medicaid?
What Is Medicare?
Medicare has been around since 1965, when the federal government created it to provide health insurance coverage to older adults and people with certain disabilities. These individuals often have trouble obtaining adequate health insurance through other means, such as through an employer. Medicare exists to fill that gap and help people get the care they need.
Although Medicare is a federal government program, you can get Medicare coverage directly through Medicare or through private insurance companies that contract with Medicare. Since it can be confusing to navigate the different plans, our Obrella agents can help you understand your options and find the right Medicare plan for you.
Who Is Eligible for Medicare?
Most people are eligible for Medicare when they turn 65. If you’re not 65 but have certain disabilities, you may still qualify if you meet a few requirements.
Medicare Eligibility Requirements for People Under 65
- You’ve been receiving Social Security disability benefits for at least 24 months.
- You have ALS (Lou Gehrig’s disease).
- You have End-Stage Renal Disease (ESRD).
If you have a disability that qualifies for Medicare and you meet the requirements, you’ll get all the same insurance benefits as someone who’s over 65. The benefits of Medicare’s different parts stay the same regardless of whether you enroll due to age or health conditions.
You can find out more details about Medicare eligibility requirements in our Eligibility article.
What Are the Different Parts of Medicare?
Medicare has four different parts: A, B, C, and D. Part A and Part B are usually referred to as “Original Medicare,” while Part C is called “Medicare Advantage.” Part D covers prescription drugs.
You can also enroll in a Medicare Supplement Insurance plan, also known as Medigap.
Medicare Part A (Original Medicare): Insurance for Inpatient Care
As part of Original Medicare, Medicare Part A covers you if you ever need to stay in a hospital, physical rehab clinic, or nursing facility, and it covers surgeries and lab tests. Part A also helps with in-home nursing care. On the other hand, it does not cover custodial care (when a paid professional helps with everyday tasks around your home, like bathing, dressing, or taking medications).
Medicare Part A does cover hospice care for people who need comfort care at the end of their lives.
What Does Medicare Part A Cover?*
- Inpatient care at a hospital
- Skilled care at a nursing facility
- Care at a long-term hospital
- Hospice care
- Lab tests
Medicare Part B (Original Medicare): Insurance for Outpatient Care
Medicare Part B covers preventative care and necessary medical services and supplies. If you use an oxygen tank or need a glucose monitor, those things are covered under Medicare Part B. Your annual checkup at your doctor’s office would also be covered by Medicare B.
Part B does not cover all medical supplies or services. For example, you can’t use Medicare Part B to buy contact lenses or a gym membership.
Furthermore, Part B doesn’t include prescription drugs. For benefits at the pharmacy, you’ll need either a Medicare Part C plan with prescription drug coverage or Medicare Part D.
What Does Medicare Part B Cover?*
- Necessary medical supplies
- Preventative medical services (like doctor visits)
Medicare Part C (Medicare Advantage): Insurance from a Private Company
If Medicare Part A and Part B are not a good fit for your needs, you can opt for a Medicare Advantage plan instead, also known as an ”MA plan” or Medicare Part C.
Medicare Advantage plans are administered by private insurance companies that work with the federal government. Most Medicare Advantage plans include prescription drug coverage, but make sure it’s an included benefit in the exact plan you choose if you regularly pick up medications at the pharmacy.
All the benefits you get with Original Medicare (Part A and Part B) are also available through a Medicare Advantage plan. Part C plans are legally required to cover the same things as Medicare Part A and Part B—but you can also get some extra benefits.
Not only can Medicare Part C include prescription drug coverage, but it can also often cover things Original Medicare does not, like hearing aids and dentist visits. Medicare Part C plans do tend to cost more than Original Medicare, so it just depends on your personal budget and needs.
What Does Medicare Part C Cover?*
- All the services included in both Medicare Part A and Part B
- Additional services such as vision, dental, and hearing care (depending on your plan)
- Certain prescription drugs (most MA plans include Medicare Part D)
Medicare Part D: Insurance for Prescription Drugs
Medicare Part D is an optional add-on to Original Medicare plans and a few other types of Medicare plans:
- Certain Medicare cost plans
- Medicare Medical Savings (MMS)
- Certain private Medicare fee-for-service plans
Before you sign on for a Medicare Part D plan, you should check its formulary list (the list of prescription drugs that the plan covers). That way, you can make sure the medications you take are covered, and you’ll learn more about how much they’ll cost you. Different drugs fall into different “tiers,” and each tier has a different cost associated with it.
What Does Medicare Part D Cover?*
- Certain prescription drugs
Medicare Supplement Insurance (Medigap): Additional Coverage
Medicare doesn’t cover every medical cost you need to pay. Even with Medicare coverage, you’ll still be responsible for things like deductibles and co-pays.
Medicare Supplement Insurance plans, also known as Medigap, help cover leftover costs after your Medicare plan has already paid its share of your medical costs. Medigap coverage is available for only people with Original Medicare plans (Part A and Part B). You cannot use a Medigap plan with a Medicare Advantage plan (Part C).
Which Medicare Plan Should You Choose?
The main difference between Original Medicare and Medicare Advantage is that Original Medicare plans are administered by the federal government, while Medicare Advantage plans are administered by private insurance companies.
But how do you know which Medicare plan will work best for you? It depends on your medical needs. If you are relatively healthy and don’t need much medical attention, then the Original Medicare plan might be enough for you.
On the other hand, people who tend to need more medical support throughout the year might be better off with a Medicare Advantage plan because, unlike Original Medicare, they may limit how much you spend out of pocket and cover medical services Medicare Part A and Part B don’t—like hearing aids.
When Can You Enroll for Medicare?
You can enroll in Medicare only after certain events in your life. In fact, you might not have to enroll at all—some people are enrolled automatically for Original Medicare because of specific circumstances.
When Are You Automatically Enrolled in Medicare?
- When you receive Social Security benefits at least four months before your 65th birthday
- When you have been receiving disability benefits for 24 months
- If you have ALS (Lou Gehrig’s disease), when your disability benefits begin.
In any of these circumstances, a Medicare membership card will simply arrive in your mailbox. Otherwise, you’ll need to sign up for either Original Medicare or a Medicare Advantage plan when you turn 65.
You can learn more details about how to sign up for various Medicare plans in our Enrollment article.
Medicare Enrollment Time Frames
There are a few different times when you can sign up for Medicare:
- During the Initial Enrollment Period (when you first become eligible)
- During the General Enrollment Period (from January 1st to March 31st every year)
- During a Special Enrollment Period (when a qualifying event happens in your life)
- During the Open Enrollment Period (October 15th to December 7th each year)
How Much Does Medicare Cost?
Once you enroll in a Medicare plan, there are three main costs you are responsible for:
- A premium
- A deductible
- A cost-sharing portion
The premium is the monthly cost you pay for your health insurance plan, although many people can get Medicare Part A for no premium at all. But even so, you’ll probably still have a deductible and a cost-sharing agreement.
Cost-sharing means that even after you meet your deductible, you are still responsible for a portion of your overall bills—usually about 20%.
If you don’t enroll in Medicare on time, you might also face late penalties.
How Does Medicare Work with Other Insurance?
You can have additional health insurance along with Medicare—it just means you will have multiple payers for any medical bills you might accrue. If Medicare is your primary payer, then Medicare will pay whatever bills align with your benefits. Anything left over will go to your secondary payer (i.e., your other insurance provider).
If you want a private health insurance plan, such as a plan from your employer, to be the secondary payer, then you will probably need to enroll in at least Medicare Part B before you can qualify to receive benefits from your secondary insurance payer.
What Is Medicaid?
Medicaid is similar to Medicare, and they were established at the same time. But while Medicare focuses on covering older people and people with certain disabilities, Medicaid helps people who have low or limited incomes.
It’s possible to qualify for both Medicare itself and a Medicare Savings Program through Medicaid. If you can’t afford Medicare premiums or deductibles, then Medicare Savings Programs through Medicaid can help you cover the difference.
Consult a Medicare Agent
If you have questions about Medicare eligibility and enrollment, or if you are ready to enroll, consult an Obrella Medicare agent today for more information. We’ll work with you—either in person or over the phone—to sort through your Medicare plan options and help you find the right coverage to meet your needs.
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