M edicare is a federal health insurance program which was originally established under the Social Security Act to provide health insurance to individuals age 65 and older. Under the current rules, you are eligible for Medicare if:
- You are age 65 or older, You are under age 65 with certain permanent disabilities and receive Social Security benefits You are of any age and suffer from end-stage renal disease, or
- You are of any age and suffer from Lou Gehrig’s disease .
It is important to know that Medicare helps with the cost of healthcare, but it will not cover all of your healthcare costs.
Medicare consists of 4 parts, each covering different benefits
Medicare Part A is also known as the Hospital Insurance (HI) program. Part A helps cover your inpatient care in hospitals, critical access hospitals, and skilled nursing facilities (not custodial or long-term care). It also helps cover hospice care and some home health care. You must meet certain conditions to get these benefits.
Most people don’t have to pay a monthly payment, called a premium, for Part A. This is because they or a spouse paid Medicare taxes while they were working. If you (or your spouse) didn’t pay Medicare taxes while you worked and you are age 65 or older, you may be able to buy Part A. If you aren’t sure if you have Part A, look on your red, white, and blue Medicare card. If you have Part A, “Hospital (Part A)” is printed on your card. You can call Social Security at 1-800-772-1213, or visit your local Social Security office for more information about buying Part A.
Medicare Part B is also called the Supplementary Medical Insurance (SMI) and is optional. Part B helps cover medical services like doctors’ services, outpatient care, and other medical services that Part A doesn’t cover. Part B helps pay for covered medical services and items when they are medically necessary. Part
B also covers some preventive services like exams, lab tests, and screening shots to help prevent, find, or manage a medical problem.
Most people will pay a standard monthly premium for Part B; however, this may be adjusted based on your modified adjusted gross income. In some cases, your monthly premium amount may be higher if you didn’t sign up for Part B when you first became eligible. The cost of Part B may go up 10% for each 12-month period that you could have had Part B but didn’t sign up for it. You will have to pay this extra amount as long as you have Part B, except in special cases.
Medicare Part C is also known as the Medicare Advantage Program. You must have both Part A and Part B to join Medicare Advantage plans. Most Medicare Advantage Plans are HMOs and are more restrictive. However, these plans provide all of your Part A and Part B services and generally provide additional services. You usually pay one monthly premium, plus copayments that will likely be less than the coinsurance and deductibles under Original Medicare. In most cases, these plans also offer Part D prescription drug coverage. These plans are offered by private insurance companies approved by Medicare. Costs and benefits vary significantly by plan and geography.
Medicare Part D is Prescription Drug Coverage. Since January 1, 2006, everyone with Medicare, regardless of income, health status, or prescription drug usage has had access to prescription drug coverage. For more information on Part D see “Medicare Part D – Basics ” or visit the medicare website.
As you consider your options when signing up for Medicare, carefully consider your needs, how important choice of doctors is to you, and the total costs including the total co-payment or co-insurance levels as well as total premiums. If you are prior military and covered under the government’s Tricare for Life Program, be sure to look into how your options are affected by your Tricare coverage.