The Basics of Medicare
Once you turn age 65, you qualify for Medicare. Medicare is health insurance funded by the U.S. government. It’s available to you and your spouse if either one of you has worked and paid Medicare taxes for at least 10 years.
Keep in mind that Medicare is different from Medicaid, another type of U.S. government insurance. Medicaid is designed for people with low income and assets. It is funded by state and federal governments, and different states have different eligibility requirements. (In some cases, you can get both Medicare and Medicaid, but the rules are complicated.)
Medicare consists of four parts:
Part A. This covers hospitals, including a semi-private room, meals and other general services. It does not cover a private room, private nurse or other extras. Medicare Part A also covers the cost of a skilled nursing facility, but only after a hospital stay of at least three days. It also covers home health care prescribed by your doctor, including part-time nursing, medical equipment and services such as physical and occupational therapy. Finally, Medicare Part A covers hospice care and any blood you might receive while in a hospital or skilled nursing facility. Medicare Part A is free but only pays benefits during a benefit period that begins when you enter the hospital and ends when you have gone 60 consecutive days without inpatient hospital care or skilled care at a skilled nursing facility.3
Part B. Like Medicare Part A, you are automatically enrolled in Medicare Part B if you are receiving Social Security benefits and are at least 65 years of age, or are disabled and have been receiving Social Security benefits for 24 months. However, unlike Medicare Part A, Medicare Part B requires a monthly premium, which is based on your taxable income. Medicare Part B can help to offset the cost of doctors’ fees, emergency room visits and other outpatient services.4 Keep in mind that you do not have to accept Medicare Part B if you do not want it. You always have the option of purchasing private health insurance or, if you are still working, opting for your employer’s health coverage. Note: this varies by employer plan. Some employer plans require policyholders to make Medicare their primary policy.
Part C. More commonly known as Medicare Advantage Plans, Medicare Part C combines Part A and Part B with other services that may include vision, hearing, dental and some prescription drug coverage. Unlike Medicare Part A and Part B, Medicare Part C is offered by private insurance companies and generally requires a monthly premium.5 Like Medicare Parts A and B, your enrollment in a Medicare Advantage plan will automatically renew each year, but you can switch Medicare Advantage Plans or go back to the original Medicare during the annual open enrollment perior.
Part D. Introduced in 2006, Medicare Part D is the newest of the Medicare programs and focuses on prescription drug coverage. Like Medicare Part C, Medicare Part D is issued by private companies. Medicare Part D plans vary in the medications they cover, the co-pay or co-insurance arrangement they make available, and the monthly premiums they require.6
With so many moving parts, Medicare can be overwhelming. Your health care needs will vary depending on a variety of factors, including your medical conditions, the medications you are taking and even your preferences for medical care.
For full details of Medicare plans and coverages, please visit www.medicare.gov.
