Most people have heard of Medicare when it comes to health insurance. However, not everyone knows precisely what Medicare is or what it covers.
You might think that Medicare coverage is only for senior citizens, but that is not always true. Medicare provides many great benefits, including hospital insurance, doctor visits, and prescription drug coverage. The details of Medicare can get confusing, so knowing which coverage you qualify for and how much it will cost you is essential.
Keep reading as we discuss the basics of Medicare, including eight things you need to know about Medicare coverage.
Basic Introduction To Medicare
To fully understand how Medicare works, you first need to know some history and Medicare basics. Medicare was signed into law in 1965 by President Lyndon B. Johnson. The United States government saw the need for health care coverage for retirees. Since most people received health insurance through their employer, many had no options after leaving the workforce.
Social Security beneficiaries needed health insurance, but they had no real options for purchasing it independently. Medicare was founded to provide insurance coverage for these retirees. Medicare is not a welfare program, as recipients either pay for the coverage during their working years or pay for it as they receive it. Medicare is funded through payroll taxes and the premiums paid by recipients.
Medicare was later expanded to include other people who could not enter the workforce, like those receiving disability benefits.
Today, Medicare covers millions of Americans. In addition, many private insurance companies contract with Medicare to provide plans for eligible individuals. These private plans help individuals simplify their separate Medicare plans into a single, easy-to-use Medicare Advantage plan. Each provider can set their own plan premiums and deductibles, although Medicare sets coverage rules that each provider must follow.
Medicare is separated into a few different parts. We will examine each in more detail later in this article, but here is a high-level overview. Medicare Part A and Medicare Part B act like what most people consider regular health insurance. Coverage details for each part differ, but these are the parts that cover regular doctor visits, hospital stays, durable medical equipment, care in a skilled nursing facility, and other items that you would typically think of regarding health insurance. Medicare Part C combines parts A and B into a single plan. Finally, Medicare Part D provides for prescription drug coverage. Now, we will dive into more details.
KEY TAKEAWAYS
- Medicare has four main components: Part A—hospital Insurance; Part B—doctor Visits; Part C (Medicare Advantage)—combining all the parts into a single plan; and Part D—prescription drugs.
- Medicare is established for people age 65 or older, younger people with disabilities, and those with end-stage renal disease.
- Medicare is not a “free” service; you will have to pay additional costs such as deductibles, copays, and monthly premiums.
Medicare Eligibility & Enrollment
So, who is eligible for Medicare? There are several different ways to qualify. People age 65 and older, younger people with disabilities, and people with End-Stage Renal Disease all qualify for Medicare.
- If you are 65 or older and you or your spouse have worked and paid Medicare taxes for at least ten years, then you qualify for Medicare Part A at no charge. If you did not pay enough taxes, you might still be able to purchase Part A coverage.
- If you already receive Social Security retirement benefits or the Railroad Retirement Board benefits, you will be automatically enrolled in this coverage.
For those receiving disability benefits, you can rest assured that the process is automatic and stress-free. You will be automatically enrolled in Medicare after you have received disability payments for 24 months. You will be automatically enrolled and begin receiving Medicare benefits at the start of the 25th month. Thankfully, enrollment is automatic and easy in most cases, allowing you to focus on your health and well-being.
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Medicare Application Process
The Medicare application process is quick and easy. If you are already receiving Social Security retirement benefits or disability benefits, then you will be automatically enrolled. You might still be working or have decided not to start your retirement benefits. In that case, you may enroll in Medicare within three months of your 65th birthday.
- You can easily apply for Medicare online. The process takes about 10 minutes and usually does not require any documentation.
When applying for Original Medicare, it’s important to consider both Part A and Part B coverage. While there is a cost associated with Part B, you can decline that coverage if you choose. However, if you wait until after your initial enrollment period, you might be required to pay a late enrollment penalty plus higher monthly premiums. If you missed your initial enrollment, you should see if you qualify for a special enrollment period to help avoid the penalty.
What Does Medicare Cover?
What do the different parts of Medicare cover? That is one of the most common questions as recipients try to determine which medical services will be covered by their plan. Here are some standard services and items covered by each part of Medicare.
Medicare Part A
Medicare Part A is generally referred to as hospital insurance. It covers inpatient hospital care and may also pay for a limited stay at a skilled nursing facility, which often occurs immediately after the hospital stay.
In some cases, Part A might even pay for home health care or hospice care. If you have a question about the covered services for Part A, you can always check for coverage details on the Medicare website.
Medicare Part B
Medicare Part B covers health care services that most people think of as traditional medical insurance plans. These include regular doctor visits, wellness checks, preventive services like flu vaccines, mental health services, outpatient procedures like dialysis, and durable medical equipment.
TIP
The best time to sign up for Medicare is during your initial enrollment period. This period begins three months before your 65th birthday and lasts six months.
8 Things You Should Know About Medicare
While we have covered the basics of Medicare, many people are still confused about Medicare costs and coverages. If you are nearing eligibility for Medicare, then there are some things that you should know as you get ready to enroll in the plan. Here are the eight things you need to know about Medicare to be prepared and get the most out of your health plan.
The Bottom Line
Medicare insurance plans provide coverage benefits for millions of Americans and excellent benefits for most people. You can enroll in Part A, Part B, and Part D plans separately or a single Medicare Advantage plan.
Whatever you choose, please ensure you know all the details of your plan. This is very important so that you can choose the one that meets your needs based on the premiums, copayments, and deductibles of that specific plan.
Frequently Asked Questions
No, it is not mandatory to go on Medicare at age 65. Many people are still employed and enrolled through a group plan at this time.
If you do not sign up for Medicare when you turn 65, you may choose to enroll later through a special enrollment period.
If you are already receiving Social Security retirement benefits, you will be automatically enrolled in Medicare Part A when you turn 65.
There are three ways that you can qualify for Medicare.
- First, you can qualify if you are age 65 or older.
- Next, you can qualify for Medicare if you are a younger individual with a disability. If you receive Social Security disability benefits, you can be eligible for Medicare regardless of age.
- Finally, people with End-Stage Renal Disease can qualify for Medicare regardless of age.
These are the three requirements for Medicare, and you must meet one of these requirements to be eligible for coverage.
The four parts of the Medicare program are Part A, Part B, Medicare Advantage (formerly Part C), and Part D.
Part A is considered hospital insurance and covers inpatient hospital services. Part B covers medically necessary treatments like outpatient services and regular doctor visits. Part D provides prescription drug coverage, and Medicare Advantage allows you to combine all the separate parts into a single, easy-to-manage plan.
You can find a Social Security Administration office near you by using our SSA office locator and searching for your closest location.
