Medicare: What You Need to Know

Overview

Medicare is health insurance that the United States government provides for people ages 65 and older. It also covers some people younger than 65 who have disabilities and people who have long-term (chronic) kidney failure who need dialysis or a transplant.

Medicare helps pay for most hospital services and doctor visits. It also helps pay for physical therapy, occupational therapy, and some other home health services.

But Medicare doesn't cover everything. It doesn't pay for:

• Long-term care. This is different from short-term care to recover from an illness or injury.
• Dental and vision care.
• Dentures.
• Hearing aids.

What are the parts of Medicare?

Medicare services are offered in parts. Parts A and B are often called original Medicare.

Part A

This covers hospital care, skilled nursing facilities for a limited time, and hospice. You can choose the doctors and hospitals you want, as long as they accept Medicare payments.

Part B

This part covers doctor visits and services such as wheelchairs, walkers, lab tests, and surgeries. It also covers preventive care, such as flu shots, mammograms, colorectal screenings, and yearly wellness visits.

Part C

Part C, also known as Medicare Advantage, is insurance run by private companies that have a contract with Medicare to provide Part A and B services. (You choose either original Medicare or Part C. You can't have both.) These plans usually offer extras not covered by original Medicare. Extras may include hearing, vision, and prescription drugs. Most insurance companies offer a Part C plan. These plans can vary widely in what they cover and how they are run. They can include HMOs, PPOs, fee-for-service, and medical savings accounts. You usually can use only the doctors and other providers allowed in the plan. Premiums, deductibles, and co-pays (costs that you have to pay to be covered) vary from plan to plan. Because there are so many Medicare Advantage plans, you may need to do a lot of research to compare them to find out which plan would be best for you.

Part D

This part covers prescription drug benefits. With original Medicare, you need to join a drug plan (run by a private company) and pay a monthly premium. With Medicare Advantage, drug coverage may be part of your plan. If not, you can choose to join and pay for a separate drug plan along with Medicare Advantage.

Cost

Whether you pay for Medicare depends on your plan.

Part A

• A monthly payment, or premium, is not required for people (including spouses) who are 65 or older and paid Medicare taxes while they were working.
• You don't pay a premium if you are 65 or older and you get retirement benefits from Social Security or the Railroad Retirement Board. You also don't pay a premium if:
  • You are younger than 65 and have received Social Security or Railroad Retirement Board disability benefits for 24 months.
  • You have end-stage renal disease (kidney failure) and need dialysis or a transplant.
• If you are 65 or older and don't qualify for premium-free Medicare, you can buy Part A with a monthly premium. If you buy Part A, you also need to pay a premium for Part B. Check online at www.medicare.gov for details on premium amounts.
• You usually need to pay some amount (deductibles or co-pays) for services before Medicare pays. But if you have a Medigap policy, it may cover your deductibles and co-pays.

Part B

• Most people pay a standard monthly premium and an annual deductible. Above a certain income, you pay more based on the amount of your income.
• Most preventive services—such as flu shots, mammograms, colorectal screenings—are free if the provider accepts Medicare.

Part C

These plans have different costs depending on the plan you choose. You may have monthly premiums, as well as deductibles and co-pays.

Part D

You pay a premium for the drug plan, which can vary based on what is covered in the plan.

Signing Up

Most people are automatically enrolled in Part A and Part B. This happens if they:

• Get retirement benefits from Social Security or the Railroad Retirement Board. You are enrolled the first day of the month you turn 65.
• Are younger than 65 and have been getting disability benefits from Social Security or the Railroad Retirement Board for 24 months.

If you qualify for automatic enrollment, you will be sent your Medicare card 3 months before you turn 65 or your 25th month of disability.

You need to apply to get Part A and Part B benefits if you aren't getting Social Security or railroad benefits. (You're 65 or older but still working, for example.)

You also need to sign up if you have end-stage renal disease. Medicare covers dialysis treatment for people who have permanent kidney failure.

You can get more information and sign up for Medicare by calling the Social Security office at 1-800-772-1213. Or you can apply online at www.socialsecurity.gov/medicareonly.

Penalty for late enrollment

If you don't sign up for Parts A and B when you are first eligible—by the first day of the month you turn 65—you may pay a higher premium (for the rest of your life) than if you had signed up then. A penalty also may apply for late enrollment in Part D, depending on how long you went without drug coverage.

Other Coverage

Medigap

Medigap is an insurance policy that you can buy from a private company to cover costs that are not covered by original Medicare. These costs include co-payments and deductibles. The cost of a Medigap policy depends on what is covered. Some policies pay for health care costs when you travel outside the United States.

You pay a monthly premium to the insurer, as well as paying the Medicare premium for Part B.

A Medigap policy only covers one person, so you and your spouse would each need your own policy.

Medicaid

Medicaid is health insurance for adults who have low income and limited resources. It also covers people who have disabilities. Medicaid is run by the Centers for Medicare and Medicaid Services (CMS) of the U.S. government.

Health insurance marketplace

The health insurance marketplace is a way for people who don't have health insurance to get coverage. The marketplace is part of the Affordable Care Act. Here are some important things to know:

• If you have Medicare, the insurance marketplace doesn't affect your coverage.
• It's illegal for anyone to try to sell you a health insurance plan if they know you have Medicare.
• If you aren't yet eligible for Medicare, you can seek insurance through the marketplace.
• If you are eligible for Medicare but aren't yet enrolled, you can get a marketplace plan to cover you before you go on Medicare. Your marketplace plan would stop when Medicare starts. You can't have Medicare and a marketplace plan at the same time.

More Information

You can find out more about Medicare, whether you are eligible, and what it would cost you in your situation at www.medicare.gov. Or you can call 1-800-633-4227.

You can look at Medicare plans at www.medicare.gov/find-a-plan/questions/home.aspx.

The website www.cms.gov has information on both Medicare and Medicaid.

You also can get help to decide what plans might be best for you through your state's Health Insurance Assistance Program. For more information, see www.shiptalk.org/Public/home.aspx.