Medicare
Medicare Basics, Explained
What is Medicare?
Medicare is a federal health insurance program in the United States that
provides coverage for eligible individuals, including those who are 65
years old or older, certain younger individuals with disabilities, and
individuals with end-stage renal disease. Medicare was created to provide
a federally funded health insurance program specifically for individuals
aged 65 and older, regardless of their income or medical history.
Over the years, Medicare has played a crucial role in improving healthcare
access and financial security for millions of people. It continues to evolve
and adapt to the changing healthcare landscape, ensuring that eligible
individuals have access to essential medical services and treatments.
Medicare remains a cornerstone of the healthcare system, providing vital
support to older adults and individuals with disabilities.
Medicare Eligibility
Most individuals 65 and over are eligible for Medicare
Some people under 65 are eligible too if they have certain
disabilities or illnesses
Medicare eligibility is primarily based on age, with most people aged 65
and over being eligible for the program. When individuals turn 65, they
become eligible for Medicare as long as they meet certain residency and
citizenship requirements. This age requirement is rooted in the original
intent of Medicare, which aimed to provide healthcare coverage for senior
citizens who often face increased healthcare needs as they age.
For individuals under 65, Medicare eligibility is determined by specific
disabilities or medical conditions. This includes individuals who have been
receiving Social Security Disability Insurance (SSDI) benefits for at least 24
months. SSDI is a program that provides income support to individuals
who are unable to work due to a disability. After receiving SSDI benefits
for two years, individuals become eligible for Medicare, regardless of their
age.
In addition to SSDI, individuals with certain medical conditions may also
qualify for Medicare under the age of 65. These conditions include end-
stage renal disease (ESRD) and amyotrophic lateral sclerosis (ALS), also
known as Lou Gehrig’s disease. Individuals with ESRD, which is permanent
kidney failure requiring dialysis or a kidney transplant, are eligible for
Medicare regardless of their age. Similarly, individuals with ALS are
automatically eligible for Medicare as soon as they start receiving disability
benefits from Social Security.
It’s important to note that while individuals under 65 may qualify for
Medicare based on disabilities or specific medical conditions, the process
and requirements for enrollment may differ from those of individuals who
become eligible at age 65. In such cases, individuals can work with the
Social Security Administration to determine their eligibility and initiate the
Medicare enrollment process.
Overall, Medicare provides essential healthcare coverage for millions of
aged 65 and older. It also extends its benefits to individuals under 65 who
meet specific disability or medical condition criteria, ensuring that they
have access to necessary healthcare services and treatments.
What are the 4 types of Medicare?
Medicare Part A: Also known as hospital insurance, Part A covers
inpatient hospital stays, skilled nursing facility care, hospice care,
and some home health services. Most people do not have to pay a
premium for Part A if they or their spouse have paid Medicare taxes
while working.
Medicare Part B: Part B is medical insurance that covers outpatient
services, including doctor visits, preventive care, lab tests, medical
equipment, and some home health services. Part B requires the
payment of a monthly premium, which is typically deducted from
the individual’s Social Security benefits.
Medicare Part C: Commonly referred to as Medicare Advantage, Part
C plans are offered by private insurance companies approved by
Medicare. These plans provide the same coverage as Part A and Part
B, and often include additional benefits like prescription drug
coverage and dental or vision care. Medicare Advantage plans may
have different costs and rules, and individuals who enroll in them
still need to pay their Part B premium.
Medicare Part D: Part D is prescription drug coverage. This coverage
is available through private insurance companies that are approved
by Medicare. Part D helps individuals with the cost of prescription
medications and is available as a standalone plan or as part of a
Medicare Advantage plan.
Medicare Supplement Insurance (Medigap): Medigap plans are
private insurance policies that help cover the “gaps” in coverage left
by Original Medicare (Part A and Part B). These plans can help pay
for out-of-pocket costs such as deductibles, coinsurance, and
copayments. Medigap plans are standardized and offered by private
insurance companies.
Original Medicare (Parts A & B)
Original Medicare is the basic form of Medicare coverage that includes
Part A (hospital insurance) and Part B (medical insurance), providing
essential healthcare services for eligible individuals aged 65 and older or
those with certain disabilities.
What is not covered by Original Medicare?
Original Medicare does not cover:
Most prescription drugs
Long-term care
Routine dental care or dentures
Routine vision care
Routine hearing care or hearing aids
Routine foot care
Other alternative treatments.
Original Medicare does not cover everything, but there are Medicare Plans
that offer additional benefits that cover dental, vision and hearing.
What is Medicare Part C (Medicare Advantage)?
Medicare Part C, also known as Medicare Advantage, is an alternative way
for beneficiaries to receive their Medicare benefits through private
insurance companies approved by Medicare. These plans offer all the
coverage provided by Original Medicare (Part A and Part B) and often
include additional benefits such as vision, dental, and hearing
services. Medicare Advantage plans may also have different cost
structures and provider networks compared to Original Medicare,
providing beneficiaries with more options and flexibility in their healthcare
coverage.
What is Medicare Supplement (Medigap)?
Medicare Supplement, also known as Medigap, is a type of private health
insurance that helps fill the coverage gaps in Original Medicare. Medigap
plans are offered by private insurance companies and work alongside
Medicare to provide additional benefits and financial protection. These
plans help cover expenses such as deductibles, copayments, and
coinsurance that are not fully covered by Original Medicare. It’s important
to note that Medigap plans do not include prescription drug coverage.
Therefore, if you have a Medigap plan, you’ll need to enroll in a separate
Medicare Part D plan for prescription drug coverage. Having a Medicare
Supplement plan can provide peace of mind by reducing out-of-pocket
costs and giving you more predictable healthcare expenses.
How do I enroll in Medicare?
Enrolling in Medicare involves several steps and options, depending on
your specific situation. Here is an outline of the enrollment process,
including information about automatic enrollment, initial enrollment
periods, special enrollment periods, and late enrollment penalties:
1. Automatic Enrollment:
If you are already receiving Social Security benefits or Railroad
Retirement Board (RRB) benefits, you will be automatically
enrolled in Medicare Part A (Hospital Insurance) and Part B
(Medical Insurance) when you turn 65.
You will receive your Medicare card in the mail about three
months before your 65th birthday.
2. Initial Enrollment Period (IEP):
If you are not automatically enrolled, you have an Initial
Enrollment Period to sign up for Medicare. The IEP lasts for 7
months and begins three months before the month you turn
65, includes your birthday month, and ends three months
after your birthday month.
3. Enrolling in Part A and Part B:
You can enroll in Medicare Part A and/or Part B in the following
ways:
Online: Visit the Social Security Administration (SSA) website
and complete the application.
Phone: Call the SSA at 1-800-772-1213 (TTY 1-800-325-0778)
and apply over the phone.
In-person: Visit your local SSA office and apply in person.
4. Special Enrollment Period (SEP):
If you missed your Initial Enrollment Period, you may be
eligible for a Special Enrollment Period.
SEPs are triggered by certain life events, such as losing
employer-based coverage, moving, or qualifying for Medicaid.
You typically have 8 months to enroll in Medicare after the
qualifying event.
5. Late Enrollment Penalties:
If you don’t enroll in Medicare Part B when you are first eligible
and you don’t have other creditable coverage (e.g., employer-
based coverage), you may have to pay a late enrollment
penalty.
The penalty is added to your Part B premium and increases
your monthly premium for as long as you have Part B.
The penalty amount depends on how long you delayed
enrollment, and it may increase over time.
It’s essential to understand the enrollment periods and options to ensure
timely and proper enrollment in Medicare. If you have any questions or
need assistance, you can contact the Social Security Administration or visit
their website for more detailed information.
Automatic Enrollment
If you are already receiving Social Security benefits or Railroad Retirement
Board (RRB) benefits, you will be automatically enrolled in Original
Medicare when you turn 65. This includes Medicare Part A (Hospital
Insurance) and Part B (Medical Insurance). However, you have the option
to delay enrollment in Part B if you have other health insurance coverage,
such as through an employer or union. In such cases, you can choose to
decline Part B and enroll later without facing a late enrollment penalty. It’s
essential to carefully consider your existing coverage and consult with
your employer or benefits administrator to understand how your current
insurance interacts with Medicare.
If you are not receiving Social Security benefits, you need to take steps to
enroll in Original Medicare.
Here are the options:
Enroll online: You can visit the official Social Security website and
complete the Medicare application online. This process is
straightforward and allows you to conveniently submit your
application.
Enroll by phone: You can call the Social Security Administration at 1-
800-772-1213 (TTY 1-800-325-0778) and speak with a representative
who can guide you through the enrollment process. They will assist
you in completing the application over the phone.
Enroll in person: If you prefer a face-to-face interaction, you can visit
your local Social Security office and apply for Medicare in person.
The staff at the office will provide you with the necessary forms and
help you complete the application.
It’s important to note that if you delay enrolling in Part B without having
other creditable coverage (such as employer-based insurance), you may
face a late enrollment penalty. This penalty can result in a higher monthly
premium for Part B, and it will apply for as long as you have Part B
coverage.
It’s advisable to understand your options and the timing of your
enrollment to ensure you have the appropriate coverage when you need
it. If you have any questions or need assistance with the enrollment
process, you can contact the Social Security Administration or visit their
website for more information.
Medicare Enrollment Periods
Initial Enrollment Period (IEP): The Initial Enrollment Period is the first
opportunity for individuals to enroll in Medicare. It occurs when you first
become eligible for Medicare, typically around your 65th birthday. The IEP
lasts for seven months and includes the three months before your 65th
birthday, the month of your birthday, and the three months after.
During your IEP, you have several enrollment options:
Original Medicare (Part A and Part B): You can enroll in Original
Medicare, which includes hospital insurance (Part A) and medical
insurance (Part B).
Medicare Advantage (Part C): You can choose to enroll in a Medicare
Advantage plan offered by private insurance companies. These
plans provide Medicare Part A and Part B coverage, often with
additional benefits such as prescription drug coverage.
Prescription Drug Coverage (Part D): If you opt for Original Medicare,
you can also enroll in a standalone Medicare Part D prescription
drug plan to help cover the cost of medications.
Medicare Advantage Open Enrollment Period (MA OEP): The Medicare
Advantage Open Enrollment Period is an annual period during which
individuals who are already enrolled in a Medicare Advantage plan can
make changes to their coverage. This period takes place from January 1st
to March 31st each year. During this period, it’s recommended to review
your current Medicare Advantage plan and compare it with other available
options to ensure that you have the coverage that best meets your needs.
During the MA OEP, individuals who are enrolled in a Medicare Advantage
plan can do the following:
Switch to a different Medicare Advantage plan: You can switch from
one Medicare Advantage plan to another, which may offer different
benefits, costs, or provider networks.
Disenroll from a Medicare Advantage plan and return to Original
Medicare: If you decide that a Medicare Advantage plan is not the
right fit for you, you can disenroll and return to Original Medicare.
You will have the option to add standalone Medicare Part D
prescription drug coverage if needed.
It’s important to note that the Medicare Advantage Open Enrollment
Period is specifically for individuals who are already enrolled in a Medicare
Advantage plan. It does not apply to individuals who are enrolled in
Original Medicare without a Medicare Advantage plan.
Medicare Supplement Open Enrollment Period (Med Supp
OEP): Medicare Supplement Open Enrollment Period (Med Supp OEP):
The Medicare Supplement Open Enrollment Period is a six-month period
that begins when you are both 65 years old and enrolled in Medicare Part
B. During this time, you have the opportunity to purchase any Medicare
Supplement (Medigap) policy available in your state, regardless of your
health condition.
Here’s what you need to know about the Med Supp OEP:
Guaranteed Issue Right: During the Med Supp OEP, insurance
companies cannot deny you coverage or charge you higher
premiums based on your health status. This is known as your
guaranteed issue right.
Freedom to Choose: You have the freedom to choose any Medicare
Supplement plan available in your area. These plans are labeled with
letters (such as Plan A, B, C, etc.) and each plan offers different
benefits to supplement your Original Medicare coverage.
No Medical Underwriting: Insurance companies cannot require you
to undergo medical underwriting during the Med Supp OEP. This
means they cannot ask you about your pre-existing conditions or
deny you coverage based on your health.
It’s important to take advantage of the Med Supp OEP because once this
period ends, insurance companies can consider your health status and
medical history when deciding whether to offer you a Medicare
Supplement policy and at what price. If you miss this enrollment period,
you may still be able to apply for a Medicare Supplement plan, but you
could face medical underwriting and potentially higher premiums.
Special Enrollment Period (SEP): The Special Enrollment Period (SEP) is a
time outside of the initial enrollment period when you may be eligible to
enroll in Medicare or make changes to your existing Medicare coverage.
SEPs are granted for specific circumstances, allowing you to enroll or
make changes outside of the standard enrollment periods.
Here are some common situations that may qualify you for a Special
Enrollment Period:
Delayed Retirement: If you delayed your retirement past the age of
65 and had healthcare coverage through your employer or union,
you may be eligible for an SEP when you retire and lose your existing
coverage.
Loss of Employer Coverage: If you had employer-sponsored health
insurance and it is no longer available to you (e.g., due to job loss or
retirement), you may be eligible for an SEP to enroll in Medicare.
Moving: If you move outside of your current Medicare plan’s service
area, you may be eligible for an SEP to select a new plan that serves
your new location.
Dual Eligibility: If you are eligible for both Medicare and Medicaid,
you may have additional opportunities to make changes to your
coverage through an SEP.
Qualifying Life Events: Certain life events, such as marriage, divorce,
or the death of a spouse, may trigger an SEP.
It’s important to be aware of the specific requirements and timelines for
each SEP. Generally, you will have a limited window of time to take
advantage of the SEP, typically around 60 days from the qualifying event.
During this time, you can enroll in or make changes to your Medicare
coverage without facing penalties or restrictions.
Annual Election Period (AEP): The Annual Election Period (AEP), also
known as the Open Enrollment Period, is a designated time each year
when Medicare beneficiaries can make changes to their Medicare
Advantage (Part C) and Medicare prescription drug (Part D) plans.
During the AEP, which runs from October 15th to December 7th, you have
the following options:
Switch Medicare Advantage plans:
You can change from one Medicare Advantage plan to another, or
you can switch from Original Medicare to a Medicare Advantage
plan.
Enroll in a Medicare Advantage plan: If you are currently enrolled in
Original Medicare, you can use the AEP to enroll in a Medicare
Advantage plan that offers additional benefits.
Join a Medicare prescription drug plan: If you have Original Medicare
and want prescription drug coverage, you can enroll in a Medicare
Part D prescription drug plan.
Change your Medicare prescription drug plan: If you already have a
Medicare Part D plan, you can switch to a different plan that better
suits your needs.
It’s important to note that any changes made during the AEP will take
effect on January 1st of the following year. This is a crucial period to
review your current Medicare coverage, assess your healthcare needs,
and make any necessary adjustments to ensure you have the most
suitable coverage for the upcoming year.
History of Medicare
Medicare was signed into law on July 30, 1965, by President Lyndon B.
Johnson as an amendment to the Social Security Act. It was created to
provide health insurance coverage for Americans aged 65 and older,
regardless of income or medical history. The program aimed to address
the lack of affordable healthcare for seniors and to ensure they had
access to essential medical services. Since its inception, Medicare has
undergone several expansions and amendments, including the addition of
coverage for people with disabilities and those with end-stage renal
disease. Medicare has become a cornerstone of the American healthcare
system, providing millions of beneficiaries with access to essential
healthcare services and contributing to improved health outcomes for
older adults and individuals with disabilities.
Medicare vs. Medicaid
Medicare and Medicaid are both government programs that provide
healthcare coverage, but they serve different populations and have
different eligibility requirements.
Medicare is a federal health insurance program primarily for people aged
65 and older, although it also covers some individuals with disabilities or
specific medical conditions. It is generally available to all U.S. citizens and
legal residents who have paid into the Medicare system through payroll
taxes. Medicare is divided into different parts: Part A covers hospital
insurance, Part B covers medical insurance, Part C offers Medicare
Advantage plans, and Part D provides prescription drug coverage.
Medicare is administered by the federal government.
Medicaid, on the other hand, is a joint federal and state program that
provides health coverage to low-income individuals and families. Eligibility
for Medicaid is based on income and other factors, and it varies from state
to state. Medicaid is designed to assist individuals and families who have
limited financial resources and may not be able to afford private health
insurance. The program covers a wide range of medical services and is
administered by individual states, following certain federal guidelines.
In summary, Medicare primarily serves older adults and people with
disabilities, while Medicaid focuses on providing healthcare coverage to
low-income individuals and families. The eligibility requirements, benefits,
and administration of the two programs differ, but both play important
roles in ensuring access to healthcare for different segments of the
population.