Medicare
What You Need to Know
Medicare Simplified
Medicare is a health insurance program for:
- people age 65 or older,
- people under age 65 with certain disabilities, and
- people of all ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant).
Medicare has:
Part A Hospital Insurance- Most people don't pay a premium for Part A because they or a spouse already paid for it through their payroll taxes while working. Medicare Part A (Hospital Insurance) helps cover inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities (not custodial or long-term care). It also helps cover hospice care and some home health care. Beneficiaries must meet certain conditions to get these benefits.
Part B Medical Insurance
Most people pay a monthly premium for Part B. Medicare Part B (Medical Insurance) helps cover doctors' services and outpatient care. It also covers some other medical services that Part A doesn't cover, such as some of the services of physical and occupational therapists, and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary.
Prescription Drug Coverage
Most people will pay a monthly premium for this coverage. In January 1, 2006, Medicare prescription drug coverage became available to everyone with Medicare. This coverage is to help you lower prescription drug costs and help protect against higher costs in the future. Medicare Prescription Drug Coverage is insurance. Private companies provide the coverage. Beneficiaries choose the drug plan and pay a monthly premium. Like other insurance, if a beneficiary decides not to enroll in a drug plan when they are first eligible, they may pay a penalty if they choose to join later.
Are you Eligible for Medicare?
Generally, you are eligible for Medicare if you or your spouse worked for at least 10 years in Medicare-covered employment and you are 65 years old and a citizen or permanent resident of the United States.
If you are not 65, you might also qualify for coverage if you have a disability or with End-Stage Renal disease (permanent kidney failure requiring dialysis or transplant).
Here are some simple guidelines. You can get Part A at age 65 without having to pay premiums if:
You already get retirement benefits from Social Security or the Railroad Retirement Board. You are eligible to get Social Security or Railroad benefits but have not yet filed for them. You or your spouse had Medicare-covered government employment.
If you are under 65, you can get Part A without having to pay premiums if:
You have received Social Security or Railroad Retirement Board disability benefit for 24 months. You are a kidney dialysis or kidney transplant patient.
While you don’t have to pay a premium for Part A if you meet one of those conditions, you must pay for Part B if you want it. It is deducted from your Social Security, Railroad Retirement, or Civil Service Retirement check. If you don’t get any of the above payments, Medicare sends you a bill for your Part B premium every 3 months.
Medicare Advantage Plans
Medicare Advantage Plans, sometimes called Part C, are health plan options that are part of the Medicare program. If you join one of these plans, you generally get all your Medicare-covered health care through the Medicare Advantage Plan. This coverage can include prescription drug coverage. Medicare Advantage Plans include:
Preferred Provider Organizations (PPO)
Health Maintenance Organization (HMO)
Private Fee-For-Service Plans (PFFS)
Chronic Special Needs Plans (CSNP)
When you join a Medicare Advantage Plan, you use the health insurance card that you get from the plan for your health care. In most of these plans, there generally are extra benefits and lower co-payments than in the Original Medicare Plan. Most Medicare Advantage Plans are managed care plans, usually a preferred provider organization (PPO) or a health maintenance organization (HMO) and you may have to see doctors that belong to the plan or go to certain hospitals to get services.
To join a Medicare Advantage Plan, you must have Medicare Part A and Part B. You will have to pay your monthly Medicare Part B premium to Medicare. In addition, you may have to pay a monthly premium to your Medicare Advantage Plan for the extra benefits that they offer. In 2024, the standard Part B premium amount is $174.70 (or higher depending on your income). However, some people who get Social Security benefits pay less than this amount.
Will I have to Pay A Late Enrollment Penalty?
The Medicare late enrollment penalty is a financial penalty imposed on individuals who delay enrolling in certain parts of Medicare when they are first eligible. For Medicare Part B (medical insurance) and Part D (prescription drug coverage), there is a penalty if someone doesn't enroll during their initial enrollment period and doesn't have creditable coverage from another source, such as employer-sponsored insurance. The late enrollment penalty is a percentage of the standard premium and is added to the individual's premium for each full 12-month period they were eligible for but did not enroll. This penalty remains for as long as the individual has Medicare Part B or Part D coverage. It's important to note that the penalty is avoidable by enrolling in Medicare during the initial enrollment period or during special enrollment periods triggered by qualifying events. Individuals who may be subject to a late enrollment penalty should carefully consider their enrollment timing and understand the potential long-term financial consequences of delaying enrollment in Medicare.
Frequently Asked Questions
What is Medicare, and who is eligible for it?
Medicare is a federal health insurance program primarily for individuals aged 65 or older, but it also covers certain younger people with disabilities or those with End-Stage Renal Disease (ESRD). Eligibility is based on age or specific qualifying conditions.
What is the difference between Medicare Part A and Part B?
Medicare Part A covers hospital stays, skilled nursing facilities, hospice care, and some home health services. Part B covers outpatient care, doctor's visits, preventive services, and medical supplies. Part A is often premium-free if you've paid Medicare taxes, while Part B has a monthly premium.
What is Medicare Advantage (Part C)?
Medicare Advantage (Part C) is an alternative to Original Medicare. It is offered by private insurance companies and includes all benefits of Part A and Part B, often with additional benefits like prescription drug coverage, dental, vision, and wellness programs. It typically comes with different out-of-pocket costs and provider networks.
What is the enrollment period for Medicare?
The Initial Enrollment Period (IEP) is a seven-month window that begins three months before your 65th birthday, includes your birthday month, and ends three months after. There is also an Annual Enrollment Period (AEP) from October 15 to December 7, during which you can make changes to your plan.
What happens if I don’t enroll in Medicare on time?
If you miss your Initial Enrollment Period, you may face late enrollment penalties. For example, for Part B, you could pay a 10% higher premium for every 12 months you were eligible but didn’t sign up, unless you qualify for a Special Enrollment Period due to circumstances like continuing employer coverage.
What is life insurance, and why do I need it?
Life insurance is a contract with an insurance company that provides a lump-sum payment to your beneficiaries after your death in exchange for premium payments. It's essential for providing financial support to your loved ones, covering debts, funeral costs, or replacing lost income.