What is Medicare? Your Questions Answered

Medicare is a government health care program that covers adults that are 65 and older, younger people with long-term disabilities, those with end-stage renal disease (ESRD) (permanent kidney failure requiring dialysis or transplant), and amyotrophic lateral sclerosis (also known as Lou Gehrig's disease or ALS).

Before you can enroll, however, you need to know the basic options of the plan so you can narrow down what is the best option for you. The following options are available:

• Medicare Part A (inpatient hospital insurance/coverage)
• Medicare Part B (outpatient /medical coverage)
• Medicare Part C (Advantage plans)
• Medicare Part D (prescription drug coverage)

Original Medicare is composed of both Part A and Part B. You have to enroll for both parts separately. If drug coverage is needed you will have to apply for Medicare Part D plans separately as well. This plan allows you to directly to the doctor or hospital when needed without prior permission from Medicare. 

Medicare Advantage covers both Part A and Part B under the plan. The plan also has the option of covering the Medicare prescription drug plan, dental, vision, and many others. This plan is not issued through the federal government, but can be obtained by private insurers or private insurance companies under a private plan. There may be network restrictions that will limit your choice of doctors and hospitals.

Medicare Supplement, also referred to as Medigap, covers health care costs that are not already covered by original Medicare. These costs can be defined as deductibles, coinsurance, copayments, or any out-of-pocket costs not covered by Part A and B. This plan cannot be purchased if you are covered under Medicare Advantage.

Part A covers in-patient care for a hospital or skilled nursing facility (SNF). It also covers skilled nursing care, hospice care, and limited home health-care services. You typically pay a deductible and coinsurance.

Part B is used as medical insurance. It is used for medically necessary services and preventative services. Part B covers items such as:

• Doctor office visits
• Lab tests
• Ambulance transportation
• Flu shots
• Mental health care
• Medical equipment
• Home health services

Part C is also called Medicare Advantage. Advantage is offered by private companies that have been approved by Medicare. It covers everything that Original Medicare Part A and Part B cover and may cover extra benefits as well.

Part D is prescription drug coverage. You pay a monthly premium to an insurance carrier to use the carrier's network of pharmacies to purchase your prescription medications. With this plan you do not pay full price, but rather a co-pay, and the insurance company will pay the rest of the drug costs. 

Not everyone is eligible for Part A & B. This can be solved by paying premiums for Part A or Part B. 

People who are 65 or older may qualify to have premium-free Part A.  This health insurance can help protect you from the high costs of medical expenses.  Everyone pays taxes throughout their lives, and if you’ve worked long enough (around 10 years), then you are likely to be eligible for this benefit at age 65. You will need to sign up for the Medicare program at your local Social Security office as soon as possible after you turn 65.

If you have been receiving Social Security benefits or Railroad Retirement Board disability benefits for at least two years, then you may qualify to receive premium-free Part A.  You also may be eligible for both if you have not yet filed for them yet.  

Finally, there are people who are not yet 65 but have certain disabilities that cause them to need special care such as kidney transplant patients, those who require dialysis, or have been diagnosed with Lou Gehrig's disease (ALS), may be eligible for Medicare without having to pay a monthly premium.

Medicare Parts A and B are not comprehensive. Medicare Advantage plans may offer extra benefits that Original Medicare does not cover, so it's important to consider this when purchasing a Part C plan for yourself.

Items and services not covered by Medicare Parts A & B

• Routine foot care
• Acupuncture
• Most Dental Care
• Dentures
• Cosmetic Surgery
• Hearing Aids and Hearing Aid Exams
• Routine Eye Exams

Medicare does not cover long-term care, and Medicaid will only pay for this in the case of low income Americans with little or no savings.

If you are currently receiving Social Security benefits, enrollment is automatic. If not, you need to sign up three months before your 65th birthday. By enrolling before your birthday month your benefits will start the first day of your birth month. There are three ways to enroll:

• Applying online at Social Security's website
• Calling Social Security at 1-800-772-1213
• Visiting a local Social Security office in person

The online application is short and can take approximately 10 minutes. If you would rather visit an office in person, consider making an appointment. 

The initial enrollment period for Original Medicare is from Oct. 15 to Dec. 7. Any changes that are made during this period will begin on Jan. 1 of the next year.

Medicare Advantage enrollment is from Jan. 1 to March 31. Any changes that are made during this period will take effect on the first of the month after the plan receives your request.

Medicare is partially funded by Social Security and also the taxes on your income. Part A is free for most people who are over the age of 65 that have worked and paid Medicare taxes. Part B is not free and has a standard premium that must be paid.

According to medicare.gov, here are Medicare costs for 2021:

Part A premium

Most people don't pay a monthly premium for Part A (sometimes called "premium-free Part A"). If you buy Part A, you'll pay up to $471 each month in 2021. If you paid Medicare taxes for less than 30 quarters, the standard Part A premium is $471. If you paid Medicare taxes for 30-39 quarters, the standard Part A premium is $259.

Part A hospital inpatient deductible and coinsurance

You pay:

• $1,484 deductible for each benefit period
• Days 1-60: $0 coinsurance for each benefit period
• Days 61-90: $371 coinsurance per day of each benefit period
• Days 91 and beyond: $742 coinsurance per each "lifetime reserve day" after day 90 for each benefit period (up to 60 days over your lifetime)
• Beyond lifetime reserve days: all costs

Part B premium

The standard Part B premium amount is $148.50 (or higher depending on your income).

Part B deductible and coinsurance

$203. After your deductible is met, you typically pay 20% of the Medicare-approved amount for most doctor services (including most doctor services while you're a hospital inpatient), outpatient therapy, and durable medical equipment (DME).

Part C premium

The Part C monthly premium varies by plan. Compare costs for specific Part C plans.

Part D premium

The Part D monthly premium varies by plan (higher-income consumers may pay more). Compare costs for specific Part D plans.

Medicare is a federal health insurance program that is run by the federal government. It mainly focuses on and provides coverage to individuals who are 65+ or have a disability, no matter what your income. 

Medicaid is an assistance program run by both state and federal governments and provides health coverage if you have a very low income. Medicaid does not pay money to you; instead, it sends payments directly to your health care providers. Eligibility is largely determined by income level. Medicaid programs offer a wider range of health care services compared to Medicare.

Older adults and those with serious chronic medical conditions are considered to be at higher risk for contracting the virus. While the number of cases skyrocketed it was important to protect our seniors from getting COVID-19. The following changes were made to Medicare in response to the virus:

• COVID-19 vaccines — The Food and Drug Administration (FDA) authorized that the vaccines should be distributed for free by states and local communities regardless of the type of insurance coverage an individual may have.
• Coronavirus testing — This is deemed free under the First Coronavirus Response Act for those with and without insurance.
• Telehealth Services  — Telehealth services are medical care or health services that generally occur in person. These services are now performed by a doctor or other health care professional that is located elsewhere. The visits can be done via telephone or video. Due to the pandemic, Medicare expanded its services permanently to include telehealth visits. This includes doctor visits, and behavioral health counseling.
• Prescription refills  — During the pandemic, a 90-day supply of medication was allowed instead of a traditional 30-day supply. Check with your plan and your doctor to find out what prescriptions can now be refilled in advance in case there have been any changes.
• SNF Care  — This was covered under Part A if someone was hospitalized for only three days before entering an SNF. Due to the pandemic, this three-day hospital stay requirement has been removed. Other coverage requirements have been changed, such as the 100 days of SNF care for each benefit period. It has now been changed allowing the Medicare beneficiaries another 100 days of coverage during a public health emergency.

Plans may have changed since the emergency first started. Beneficiaries should contact their plan directly to learn about how services are covered that are related to Coronavirus and those that are not.