What is Medicare?
Medicare is a government program that supplies healthcare coverage for those eligible. It is run by Center of Medicare and Medicaid Services. This federal agency receives funding from Medicare and Social Security taxes, premiums, and the federal budget. Medicare differs from Medicaid in that Medicaid offers coverage to people with limited incomes.
Who is Eligible for Medicare?
You are eligible if you are:
- Over 65
- Under 65 and receiving Social Security Disability Insurance (SSDI)
- Under 65 with End-Stage Renal Disease (ESRD)
Four Medicare “Parts”:
Part A: Hospital Insurance (Inpatient Care)
When you turn 65 you are automatically enrolled in Part A if you have been working and paying Medicare taxes for at least 10 years (40 quarters). If you are entitled to Part A, you will not have to pay a premium. If you’re not entitled, the premium is $422/month.
Part A does not cover doctor visits, but it does cover medically-necessary inpatient care. This includes hospitalization, skilled nursing, hospice, and home health services. Original Medicare is made up of both Part A and Part B and does include doctors visits.
Part B: Medical Insurance (Outpatient Care)
Part B covers outpatient care such as physicians, healthcare professionals, lab tests, therapies, mental treatment, and some equipment.
There is a premium for Part B, and it increases by 10% every year. The deductible for Part B is $183 and there is a 20% coinsurance. The enrollment period for Part B Original Medicare typically begins three months before you turn 65. It ends 3 months following the month you turn 65.
Part C: Medicare Advantage (Private Insurance)
This part is called Medicare Advantage. It is essentially Original Medicare (Parts A and B) provided through private insurance companies. Before you can enroll, you must first enroll in Original Medicare. Many MA plans also include Part D coverage (prescription drugs) These are Medicare Advantage- Prescription Drug Plans (MA-PD). However, for MSA plans, you would need to purchase a stand-alone Prescription Drug Plan. For cost plans and PFFS plans, you have the option of obtaining prescription drug coverage through an MA-PD or through a stand-alone PDP if you need it.
Medicare Advantage Plans:
- Coordinated Care Plans:
- PPO (Preferred Provider Organization)
- HMO (Health Maintenance Organization)
- Private Fee-for-Service Plans (PFFS)
- Medical Savings Account (MSA)
- Special Needs Plan (SNP)
- Employer/Union Group Plans
Part D: Prescription Drug Coverage
This Part describes prescription drug coverage through private companies. Part D premiums are also based on different plans and have different prices, depending on your tax return from two years ago. Like with Part B, with Part D you will pay an Income-Related Monthly Adjustable Amount (IRMAA)–so the higher your income, the higher your premium. However, you may obtain help paying for this coverage through a low-income subsidy (LIS) or State Pharmacy Assistance Program.
Medicare Supplement Insurance (MediGap):
Medigap serves only as a supplement to Original Medicare. It is sold by private companies and pays all or a portion of your Part A & B coinsurance, copayments, and deductibles. Medigap comes in standardized plans (named A-N), and some cover benefits not offered by Original Medicare. One important thing to keep in mind is that Medigap no longer covers prescription drugs. In order to get drug coverage, you would need to also purchase a PDP, or drop Medigap and purchase an MA-PD plan.
The Medicaid program is a federal and state-based program that provides Medicare benefits to people with low incomes and limited resources. Medicaid should not be confused with federal health insurance plans. In order to be enrolled in Medicaid, you need to apply for it and qualify. Applicants must meet income, assets and other eligibility requirements. In most states, Medicaid is also the main source of payment for long-term care. If you think you may qualify, be sure to apply to your State Medicaid office. You may be able to get help to pay your Part A & B premiums, cost-sharing, and deductibles as well as Part D coverage. Qualifying for both Medicare and Medicaid would make you “dual-eligible” and able to enroll in Medicare-Medicaid Plans (MMPs)
Other Medicare Health Plans
- May or may not have prescription drug coverage
- Only available in some areas
- Can visit out-of-network providers (Original cost-sharing applies)
- Eligibility: Entitled to Part A OR enrolled in Part B
Programs for All-Inclusive Care for the Elderly (PACE)
- Available in limited areas
- Medical, Social Security Systems, and in-home and referral systems
- Eligibility: Over 55 and eligible for nursing
Medicare-Medicaid Plans (MMPs)
- Not available everywhere
- Receive both Medicare and Medicaid benefits
- Includes prescription drug coverage