When it comes to health insurance, most people have heard of Medicare. However, not everyone knows exactly what Medicare is or what it covers. You might think that Medicare coverage is only for senior citizens, but that is not always the case. Medicare provides many great benefits, including hospital insurance coverage, doctor visits, and prescription drug coverage. The details of Medicare can get confusing, so it is essential to know which coverage you qualify for and how much it will cost you. Keep reading as we go through the basics of Medicare, including eight things that you need to know when it comes to 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. Retirees receiving Social Security benefits found themselves needing health insurance with no real options for purchasing it on their own. 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 they pay for it as they receive it. Medicare is funded through these 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, there are many private insurance companies that contract with Medicare to provide plans for eligible individuals. These private plans help individuals simplify their separate Medicare plans into a single and easy-to-use Medicare Advantage plan. Each provider can set their own plan premiums and deductibles, although there are coverage rules set by Medicare 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 when it comes to health insurance. Medicare Part C essentially combines both parts A and B into a single plan. Finally, Medicare Part D provides for prescription drug coverage. Now we will dive into more details.
Medicare Eligibility & Enrollment
So, who is eligible for Medicare? There are a few different ways that you can qualify for Medicare. People age 65 and older, younger people with disabilities, and people with End-Stage Renal Disease all qualify for Medicare. If you are age 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 are already receiving Social Security retirement benefits or benefits from the Railroad Retirement Board, you will be automatically enrolled in this coverage.
For those receiving disability benefits, 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.
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 yet. 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 it usually does not even require any documentation.
If you are applying for Original Medicare, then you likely want to go ahead and apply for both Part A and Part B coverage. Since 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, then you might be required to pay a late enrollment penalty plus higher monthly premiums. If you missed your initial enrollment, then you should see if you qualify for a special enrollment period to help avoid the penalty.
What Does Medicare Cover?
So, 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 of the common services and items covered by each part of Medicare.
— Part A
Medicare Part A is generally referred to as hospital insurance. Part A covers inpatient hospital care. It may also pay for a limited stay at a skilled nursing facility. This 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.
— Part B
Medicare Part B covers health care services that most people think of as traditional medical insurance health plans. This includes things like regular doctor visits, wellness checks, preventive services like flu vaccines, mental health services, outpatient procedures like dialysis, and durable medical equipment.
8 Things You Should Know About Medicare
While we have covered the very 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 that you need to know about Medicare so that you can be prepared and get the most out of your health plan.
#1. Medicare Isn’t Free
Many people tend to believe that Medicare is completely free. That is not the case at all. While you can receive Part A coverage at no charge if you or your spouse have worked and paid the proper taxes for at least ten years, there are monthly premium charges associated with Part B coverage as well as Part D and Medicare Advantage Plans. In addition to monthly Part B premiums, you might also be required to make coinsurance payments when receiving treatment and meet a deductible for some services. These cost-sharing copayments might be as low as $20 in some cases, but they are not free.
#2. Consider Signing Up For Medicare Advantage
It can be difficult and confusing to keep up with all the different parts of Medicare. This is where a Medicare Advantage plan can make things easier. Previously known as Medicare Part C, these plans allow you to manage all your Medicare coverage options easily from a single plan. These plans combine Parts A and B plus a Medicare prescription drug plan together into a single plan. These health insurance programs are managed by private insurance companies that contract with the Federal government. Since each provider sets their own plan rules, you should do your research to find the one that works best for you.
#3. The Best Time To Sign Up For Medicare
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 for six months. You avoid late enrollment penalties and pay the lowest possible premiums when you sign up during this period. If you miss this period, you might qualify for a special enrollment period that will allow you to avoid the penalties. Waiting too long means that you will be required to sign up during open enrollment.
#4. Medicare Has Expanded Telehealth Services
Telemedicine has become increasingly popular in recent years, and Medicare has adapted to handle this change. Traditionally, Medicare only covered in-person health services. However, today, they provide coverage for many telehealth services. You can even find a listing of the telehealth services available, along with the fee schedule, on their website. This is a great option for individuals who may have trouble visiting the doctor in person or need to remain home due to illness or potential exposure to illness.
#5. You Have The Ability To Appeal A Medicare Decision
It is possible that Medicare might improperly deny coverage for a service. Whenever coverage is denied, you have the right to appeal their coverage decision. You can file an appeal of this decision, and there are several stages to the appeals process. The process starts with a simple request for reconsideration, and the appeal can end up in Federal Court if it goes far enough. Ensure that you provide plenty of documentation as evidence for your appeals request to prove your case.
#6. Differences Between Medicare And Medicaid
These two programs are not the same, and the intended beneficiaries of the program are completely different. Medicare is designed to provide health care coverage for retirees and individuals receiving disability. There is no income or resource requirement for this program. However, Medicaid is designed to provide coverage for individuals who cannot afford insurance on their own. Medicaid is only available to those with limited income and resources. Coverage options and plan details also vary.
#7. How To Fill In Gaps In Medicare Coverage
Many people turn to supplemental coverage options to help fill the gap in their Medicare coverage. Many private insurance companies offer Medigap plans that will help pay for items that Medicare does not cover. In addition, these plans can help with the costs of deductibles and copayments as well. If you find that Medicare does not provide the coverage you need, then you should likely consider one of these Medicare supplement plans. They can be extremely beneficial to those who need them.
#8. Medicare Doesn’t Cover Everything
You should know that there are some things that Medicare simply does not cover. While there are many qualifying services and expenses that are covered, you will find that some services are not covered. For example, neither Medicare nor Medicaid typically pays for assisted living facilities. You might also find that your Part D coverage does not include some prescription drugs that you might take. You can always find more specifics about what the Medicare program does and does not cover through Medicare.gov.
The Bottom Line
Medicare insurance plans provide coverage benefits for millions of Americans, and they provide great benefits for most people. You can choose to enroll in Part A, Part B, and Part D plans separately or enroll in a single Medicare Advantage plan. Whatever you choose, make sure that you are aware of all the details of your plan. This is imperative so that you select the one that best meets your needs based on the premiums, copayments, and deductibles of that specific plan.
Frequently Asked Questions
Is it mandatory to go on Medicare when you turn 65?
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. You may choose to enroll in Medicare later through a special enrollment period if you do not sign up when you turn 65. If, however, you are already receiving Social Security retirement benefits, you will be automatically enrolled in Medicare Part A when you turn 65.
What are the three requirements for Medicare?
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, then you can qualify for Medicare regardless of your age. Finally, people with End-Stage Renal Disease can qualify for Medicare regardless of their age. These are the three requirements for Medicare, and you must meet one of these requirements to be eligible for coverage.
What are the four parts of the Medicare program?
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 and easy-to-manage plan.