Medicare is a federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with end-stage renal disease. The program is run by the Centers for Medicare & Medicaid Services (CMS).
Parts of Medicare
Medicare has four parts:
- Part A (Hospital Insurance),
- Part B (Medical Insurance),
- Part C (Medicare Advantage), and
- Part D (Prescription Drug Coverage).
Medicare Works Like This
You can get Medicare coverage through Original Medicare or a Medicare Advantage Plan.
Original Medicare
Original Medicare is fee-for-service health insurance that is administered by the federal government. You can see any doctor or hospital that accepts Medicare, but you will pay a deductible and coinsurance for your care.
Medicare Advantage Plans
Medicare Advantage Plans are offered by private insurers and must provide at least the same level of coverage as Original Medicare. These plans may have additional benefits, such as dental, vision, and prescription drug coverage. Some Medicare Advantage Plans also offer home health care and wellness programs.
Medicare Eligibility Criteria
To be eligible for Medicare, you must:
- Be a U.S. citizen or legal permanent resident of at least 5 years
- Be 65 or older, or have a qualifying disability
- Have been receiving Social Security benefits for at least 4 months, or have Railroad Retirement Board benefits
- Not be currently enrolled in Medicaid
If you meet these requirements, you can enroll in Medicare.
Medicare Premiums
If you decide to enroll in a Medicare Advantage Plan, you will still need to pay your monthly Part B premium. You may also have to pay an annual deductible and coinsurance for your care.
Medicare Part D is a voluntary prescription drug benefit that is offered by private insurers. If you decide to enroll in a Part D plan, you will pay a monthly premium for your coverage. You may also have to pay a deductible and coinsurance for your prescriptions.
You can enroll in Medicare Part A and Part B at any time. However, there are certain times when you may have to pay a premium surcharge if you do not enroll when first eligible.
If you have health insurance through an employer or union, you may want to wait to enroll in Medicare until your group health insurance ends. This is because Medicare generally pays second to other types of health insurance.
If you delay enrollment in Medicare Part B, you may have to pay a late enrollment penalty. This penalty is an extra 10% of the current Part B premium, and it is added to your monthly premium for as long as you have Part B coverage.
You can avoid the late enrollment penalty by enrolling in Part B during one of the following special enrollment periods:
- The 8-month period that begins the month after you stop working or your group health insurance ends, whichever happens first.
- The 33-month period that begins the month after you turn 65. This special enrollment period also applies to people with disabilities who qualify for Medicare.
If you are covered by a Health Maintenance Organization (HMO) or other type of Medicare Advantage Plan, you may not need to enroll in Part D. This is because these plans typically include prescription drug coverage.
However, if you want to enroll in a stand-alone Part D plan, you can do so during the open enrollment period, which runs from October 15 to December 7 each year.
You can also switch from one Medicare Advantage Plan to another, or from one Part D plan to another, during the annual open enrollment period.
Conclusion
Medicare is a federal health insurance program that is available to people who are 65 or older, or who have a qualifying disability. Medicare Advantage Plans are offered by private insurers and must provide at least the same level of coverage as Original Medicare.
You can enroll in Medicare Part A and Part B at any time, but there are certain times when you may have to pay a premium surcharge if you do not enroll when first eligible. If you decide to enroll in a Medicare Advantage Plan or a Part D plan, you will pay a monthly premium for your coverage. You may also have to pay a deductible and coinsurance for your care.