Medicare Basics
Key Takeaways:
- Medicare is a federal health insurance program designed for American adults who are 65 years and older, as well as for certain individuals under the age of 65 with disabilities and specific health conditions.
- Medicare offers coverage for a broad spectrum of medically necessary services, including preventative care, hospital stays, doctor visits, and more.
- To enroll in Medicare, individuals typically go through the Social Security Administration, which administers the program and manages the enrollment process.
You’ve been approaching retirement, envisioning a life where you’re in control of your schedule, perhaps filled with travel, volunteering, cooking classes, and Medicare.
It’s eye-opening when you realize that preparing for retirement means you’ll need substantial finances to cover healthcare expenses. This is where understanding the fundamentals of Medicare becomes crucial, something many people overlook until it’s time to enroll.
It’s time to face the reality and understand how to finance your healthcare through Medicare.
What is Medicare, and how does it function? What does it cover? Is Medicare a form of insurance?
While the answers are complex, however, you’ve come to the right place to comprehensively understand Medicare information.
What is Medicare, and who can get it?
Medicare is like a health insurance plan for older Americans and some people with disabilities. It started in 1965 and now helps about 63.1 million Americans. The U.S. Centers for Medicare and Medicaid Services agency manages Medicare, but it's different from Medicaid, which helps low-income people of all ages.
Medicare: Your Government Health Insurance Plan
Medicare is the kind of insurance you might have from your job. You might have to pay some costs, like deductibles, coinsurance, and sometimes copays. Most people also pay a monthly fee, except for hospital coverage (Part A), which is often free.
The good thing about Medicare is that, even though the monthly fee can increase if you earn more money, it's usually cheaper than what you'd pay for insurance through your job. Plus, Medicare offers some benefits that private health insurance plan don't.
Medicare has four main parts, and each part covers different aspects of healthcare:
- Medicare Part A: This is hospital insurance. It also covers skilled nursing facility care, hospice care, and in-home care.
- Medicare Part B: This part covers visits to the doctor, outpatient care, home health care, durable medical equipment, and preventive screenings.
- Medicare Part C: Also known as Medicare Advantage, this describes Medicare-approved plans offered by private companies. They provide coverage for Medicare Part A, Part B, and usually Part D benefits.
- Medicare Part D: This part covers prescription drugs, helping you pay for the medications you need.
- Medigap: Medigap, also referred to as Medicare supplemental insurance, is an optional addition to original Medicare designed to assist in covering certain out-of-pocket expenses. By choosing Medigap, you'll pay an additional premium for this coverage.
When Can You Get Medicare?
Most people can start signing up for original Medicare three months before their 65th birthday. However, some exceptions allow you to be eligible for Medicare coverage at any age. These exceptions include:
Most people can start signing up for original Medicare three months before their 65th birthday. However, some exceptions allow you to be eligible for Medicare coverage at any age. These exceptions include:
- Certain Disabilities: If you receive monthly disability benefits through the Social Security Administration or Railroad Retirement Board (RRB), you can become eligible for Medicare after 24 months.
- Amyotrophic Lateral Sclerosis (ALS): If you have ALS and receive Social Security or RRB benefits, you are eligible for Medicare right from the first month.
- End Stage Renal Disease (ESRD): If you have ESRD, you are automatically eligible to enroll in Medicare.
Once you're enrolled in Medicare Parts A and B, eligible Americans have the option to enroll in a Medicare Advantage plan.
If you qualify for Social Security benefits at age 65, Medicare Part A (covering hospital costs) and Part B (covering doctor visits) will automatically enroll you; no action is required.
However, for other Medicare parts, you must take the initiative. To get Medicare Part D prescription drug coverage, self-enrollment is necessary. If you’re not already receiving Social Security benefits, register for it through the SSA website within a seven-month window surrounding your 65th birthday, avoiding penalties.
Enrolling in Medicare Supplement Insurance (Medigap) is also your responsibility. The six-month open enrollment period begins the month you enroll in Medicare Part B after turning 65. During this time, insurers offering Medigap must provide you coverage. Otherwise, getting a Medigap plan isn’t guaranteed.
Missing the initial enrollment or wanting to change plans later can be done during annual Medicare open enrollment periods.
Expert Guidance For More Information
Are you seeking help to get clarity on your healthcare coverage choices? Allow our team of experts to guide you in understanding your basic benefits, and then we can assist you in selecting the right supplemental plan. Reach out to us today!
The Medicare program comprises Part A, B, C, and D. It's important to note that Part C, D, and Medigap plans are offered by private insurance carriers, not the federal government.
You can opt for both a Medigap plan and a Part D plan, or you can choose an Advantage plan, only if you are enrolled in in Medicare Part A and Part B.
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