What is Medicare?
Medicare is a federal health insurance group health coverage program that's the single largest payer of health insurance in the country.
Who qualifies for Medicare? People become eligible when they turn 65. It’s also available for people under 65 with disabilities or those with end-stage renal disease or amyotrophic lateral sclerosis (ALS).
Total Medicare enrollment is more than 63 million people, according to the U.S. Centers for Medicare & Medicaid Services.
What does Medicare cover?
Medicare health insurance is divided into four parts:
- Medicare Part A: Covers inpatient hospital care, some skilled nursing facility care, hospice care, and home health care in some cases.
- Medicare Part B: Part B coverage handles doctor visits, outpatient services, medical supplies, durable medical equipment, and preventive services. Parts A and B comprise Original Medicare.
- Medicare Part C: Part C is also called Medicare Advantage and is an alternate form of Original Medicare coverage in which private insurance companies offer plans that can include prescription drug coverage. Medicare Advantage plans must include the same minimum coverage as Original Medicare.
- Medicare Part D: Part D coverage is often paired with Part A and/or Part B and provides Medicare prescription drug coverage
What isn’t covered in Medicare?
Original Medicare, sometimes called traditional Medicare, doesn’t cover some health-related services. These include:
- Long-term care
- Most dental care
- Eye exams related to prescribing glasses
- Dentures
- Cosmetic surgery
- Most types of acupuncture
- Hearing aids and exams for fitting them
- Routine foot care
The government’s official Medicare website offers a tool that can help you find out if your test, item or service is covered.
Who qualifies for Medicare?
Once you turn 65, you’re eligible for Medicare. Older people make up the vast majority of Medicare enrollees. According to CMS, most people can get Part A (hospital insurance) for free, but some may have to pay a premium for this coverage. See the eligibility requirements for Part A on the CMS.gov website here.
However, there are situations where younger people are eligible for Medicare. Those under the age of 65 are eligible for Part A without paying premiums if they receive Social Security or Railroad Retirement Board disability benefits for 24 months or if they are being treated for kidney dialysis, kidney transplant or permanent kidney failure.
Younger patients with ALS -- Lou Gehrig’s disease -- are also eligible for Medicare benefits in the first month of disability benefits. This means they don’t have to wait for 24 months to get Medicare coverage.
How does Medicare work?
Medicare is divided into Parts A, B, C and D. Original Medicare consists of Parts A (hospital insurance) and Part B (medical insurance).
“A common misconception about Original Medicare is that it pays for everything when in reality it does not,” Ciano says.
For example, Original Medicare doesn’t cover prescription drugs, vision, dental or hearing care. If you have Original Medicare and need help paying prescription drug costs, you need to buy a Part D plan.
“It also does not cap your annual out-of-pocket spending for medical care, which means there’s no limit to the expenses you may have to pay each year for your medical services,” Ciano says.
Medicare Advantage plans -- Part C -- are offered by private insurance companies through a contract with the federal government. These plans can also include prescription drug coverage and extra benefits like dental, vision, hearing care and fitness programs.
“One of the biggest benefits of a Medicare Advantage plan is that it caps out-of-pocket spending,” Ciano says.
There are four types of Medicare. These plans cover specific services:
| Type | What it covers | What it costs |
|---|---|---|
| A (hospitals) | Inpatient hospital, some skilled nursing facility care, hospice care, home health care in some cases | Free for nearly all Americans. One reason why you might have to pay a premium is if you didn’t pay Medicare taxes for at least 40 quarters. If you must pay a premium, it costs up to $506 monthly. Part A has a $1,600 deductible for each benefit period. |
| B | Doctor visits, outpatient care, medical supplies, preventive services | Part B costs $164.90 monthly, but could be more than double that amount depending on income. The annual deductible is $226. After you reach the deductible, you're responsible for 20% of the costs. |
| C (Medicare Advantage) | Medicare plans through private insurance companies and can also offer prescription drug coverage | Medicare Advantage premiums vary based on coverage. Deductibles vary by plan, but they're often much higher than Part B deductibles. |
| D (prescription drugs) | Prescription drug coverage | The Part D monthly premium varies by plan (higher-income consumers may pay more) |
How to sign up for Medicare?
Wondering how to apply for Medicare? If you are not automatically enrolled in Medicare and need to apply, you can get in touch with a Social Security Administration office or fill out an application online on the Social Security website. If you worked for the railroad, contact the Railroad Retirement Board.
If you have questions about Medicare eligibility or enrollment, call Social Security's toll-free number, 1-800-772-1213 or visit the Social Security website.
Learn more about how to sign up for Medicare.
When to apply for Medicare?
You receive sign-up instructions once your Medicare enrollment period begins, which is three months before the month of your 65th birthday. Those with qualifying disabilities such as end-stage renal disease or ALS may sign up for Medicare before turning 65.
The enrollment period lasts for seven months. If you miss your individual enrollment, you need to wait until the annual Medicare Annual Enrollment period, from October 15 to December 7 each year or wait for a special enrollment period to occur. Note that you can only sign up for Medicare Advantage plans during Medicare Annual Enrollment if you are already enrolled in Original Medicare.
Medicare vs. Medicaid
Both Medicare and Medicaid are both through the Centers for Medicare and Medicaid Services.
Medicare is an insurance program that primarily covers the health bills of those who are 65 and older and for those younger than 65 with qualifying disabilities such as end-stage renal disease or ALS. You don’t need to meet income requirements to qualify for Medicare, but you’re required to pay some of the costs when you receive care.
Meanwhile, Medicaid coverage is an assistance program that serves low-income people regardless of age and those with qualifying disabilities. Patients typically aren’t responsible for expenses associated with covered medical expenses, although co-payments may be required.
People may qualify for both Medicare and Medicaid services, which is called being dual eligible. In that case, the two insurance programs will work together to pay for your health care.
How much does Medicare cost?
Medicare program costs vary and often change. Most people don’t pay a premium for Part A.
There’s no Part A premium as long as you paid Medicare taxes for at least 40 quarters. If you didn’t pay enough taxes, you must pay a monthly premium, which is $506 in 2023.
There is also a $1,600 inpatient hospital deductible for Part A per benefit period. Coinsurance begins during days 61 and 90 ($400 per day of each benefit period) when hospitalized.
Days 91 and beyond are $800 per each "lifetime reserve day" after day 90 for each benefit period up to 60 days over your lifetime.
Once you go beyond lifetime reserve days on Part A, you’re responsible for all costs.
The Part B premium is $164.90, or higher, depending on income. The Part B deductible is $226. Once you meet the deductible, you typically pay 20% of the Medicare-approved amount.
Both Part C and Part D premiums vary by plan.
Also, remember that other costs may apply that go beyond premiums.
“If you choose an out-of-network provider, you may have to pay higher out-of-pocket costs,” Ciano says.
Source:
- Medicare.gov. Costs, Accessed August 2022.
Disclaimer:
Insurance.com is not affiliated with or endorsed by the government or Federal Medicare program. Plans are insured or covered by a Medicare Advantage organization with a Medicare contract and/or a Medicare approved Part D sponsor. Enrollment in the plan depends on the plan’s contract renewal with Medicare. We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE (TTY 1-877-486-2048), 24 hours a day/7 days a week, to get information on all of your options. Not all plans offer all of these benefits. Benefits and availability may vary by carrier and location. Limitations and exclusions may apply. Every year, Medicare evaluates plans based on a 5-star rating system. Part B Premium give-back is not available with all plans. Actual Part B premium reduction could be lower. Deductibles, copays and coinsurance may apply.
