Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD). Medicare is free for people who qualify, and is broken up into four parts A, B, C & D (explained below).
You are eligible for Medicare if:
In all three cases, you must be a citizen of the United States or a legal, permanent resident for at least five years.
Parts A and B are free if you qualify—although there are premiums and deductibles. In most cases, you'll automatically get Part A and Part B starting the first day of the month you turn 65 if you are already getting Social Security benefits.
If you don’t get Social Security benefits and you are 65 or older, you’ll have to sign up for Part A and Part B. To sign up, call Social Security at (800) 772-1213.
To find out more about qualifications, click here.
There are four parts to Medicare. They are:
Medicare Part A is Hospital Insurance and it:
Medicare Part B is Medical Insurance and it:
Part A and Part B together are commonly referred to as “Original Medicare”. Original Medicare is offered by the government, and again, in most cases you'll automatically get Part A and Part B starting the first day of the month you turn 65 if you are already getting Social Security benefits.
Medicare Part C is Medicare Advantage Plans
Instead of getting Medicare Part A and Part B, you have a choice and you can enroll in/purchase a Medicare Advantage Plan (also called “Part C”). Medicare Advantage Plans are health plans run by Medicare-approved private insurance companies, and have different rules and costs, but offer at least the same benefits of Medicare Part A and Part B, and in some cases also include prescription drug coverage, vision, and dental—but the health coverage is generally limited to in-network doctors and hospitals.
Why would someone opt to buy a Medicare Advantage Plan over getting Medicare Part A & Part B?
When it comes to Medicare the decision is yours however, you may want to get a Medicare Advantage Plan instead of Original Medicare if:
Medicare Part D is Prescription Drug Coverage
There are two ways to get prescription drug coverage through Medicare – either as an add on known as Medicare Part D to your Original Medicare Plan (Part A and Part B), or as part of your Medicare Advantage Plan (Part C). There are several different Part D plans offered, and they vary in cost and medications covered. Also note that Medicare Part D is provided by private insurance companies that have contracts with the government, unlike Medicare Part A and Part B, which is provided directly by the government.
Each Medicare Prescription Drug Plan has its own list of covered drugs. Many Medicare drug plans classify drugs by tiers and each tier has a different cost associated with it. Before you choose a Prescription Drug plan, it’s best to look at the plan’s list of drugs to see if your medication(s) is covered, and how much it will cost.
To find out more about Part D coverage, click here.
A Medicare Supplement Insurance (Medigap) policy is sold by private companies and can help pay the remaining 20% of costs Original Medicare doesn’t cover. Medicare Supplement Insurance can help cover:
Medicare Supplement policies fill in the gap between what Original Medicare covers and what it doesn’t. If you have Original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs. Then your Medigap policy pays its share.
A Medigap/Medicare Supplement policy is different from a Medicare Advantage Plan. A Medicare Supplement Plan is insurance coverage in addition to your Original Medicare coverage. It helps cover the 20% of hospitalization and doctor expenses that Parts A and B don’t cover, and you can visit ANY doctor who accepts Medicare. The most you will pay in a given year is the sum of your Medicare Supplement and Medicare Part B premiums. A Medicare Advantage Plan is a way to get Medicare benefits instead of getting Original Medicare. Medicare Advantage Plans cover in-network doctor visits, hospitalization, and often prescription drug costs. Your out-of-pocket maximum is $6,700 per year, as long as you use in-network doctors and hospitals.
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