For many people under the age of 65, Medicare is an enigma. They know it’s available. They know it’s important. But learning the ins and outs can seem daunting. So, they put off learning more about it until they reach the age of eligibility—at which point there’s a significant time pressure to make the right choices.
But at Health & Benefits Partners, our mission is to help our clients make the most informed decisions possible every step of the way. We’ve assembled the following overview to explain what Medicare is and what offers so you can prepare in advance.
WHAT IS MEDICARE?
Medicare is a national United States health insurance program for people 65 and older. It is also for people with certain disabilities or end-stage kidney failure. When Lyndon B. Johnson signed it into law in 1965, the only coverage options were Part A and Part B (which we’ll explain in a moment). But Medicare has evolved over the years and now consists of four main parts: A, B, C, and D.
Medicare Part A is essentially hospital coverage that helps with the cost of inpatient care, hospice, home health care, and skilled nursing facility stays. Part A is free for anyone who has paid payroll taxes for at least ten years in the U.S. or is married to someone at least 62 who meets that qualification.
A common question, particularly among healthy individuals, is whether Part A is sufficient for their needs. The answer is almost always no—many things in a hospital fall outside what’s covered in Part A. An easy way to think of it is to view Part A as covering your room and board while staying in the hospital—for additional services, you’ll need other parts.
Part B covers medically necessary outpatient services. It includes coverage for doctor office visits, lab testing, diagnostic imaging, preventive care, surgeries, ambulance trips, chemotherapy, radiation, and more.
Although many of these procedures will likely occur in a hospital, they fall under Part B because physicians provide them. That can make it hard to delineate between inpatient and outpatient care.
Unlike Part A, which is free for most individuals, the cost of Part B is set annually by Social Security. Your modified adjusted gross income determines what your premium will be.
Together, Parts A and B make up what’s called “Original Medicare” and are the only two parts that you can sign up for through the Social Security Administration. Parts C and D involve private insurance and different sign-up procedures.
Part C is what’s known as Medicare Advantage. If you’re enrolled in Parts A and B, you can choose to receive your Medicare from private insurance companies through this program. Once you register, your Medicare coverage will come from the Advantage plan itself, not the government.
With Medicare Advantage, you receive the same benefits as with Parts A and B, plus the lower costs and extra coverages that Original Medicare enrollees get by adding Part D and Medigap plans. (Medigap plans, such as Parts F and G, are optional supplemental coverage that you can buy to fill in the gaps in Medicare. You don’t enroll in these at the Social Security office. Instead, you choose supplemental coverage after you’ve joined Medicare.)
You don’t enroll in Part C through Social Security because Part C is voluntary. People who prefer to get their Medicare coverage from Original Medicare and Medigap plans should not enroll in Part C.
Part D provides retail prescription drug coverage. If you’re on Original Medicare and need medications to maintain your health, you can add Part D to help cover your prescription drugs. Many Medicare Advantage plans include Part D coverage.
Unlike Medicare Parts A and B, you don’t enroll in Part D through the Social Security office. Instead, you will select one of the Part D plans available in your county from private insurance carriers.
Prices for Part D vary based on your income and where you live. You’ll pay your Part D premium and adjusted amount separately if you have Original Medicare.
WHAT IS MEDICARE VS MEDICAID?
Another common question regarding Medicare is the difference between it and Medicaid. As we’ve outlined, Medicare is a health insurance program for those 65 and older or with qualifying conditions. Medicaid, on the other hand, is a program that offers financial or healthcare assistance for low-income individuals. In some cases, people can qualify for both—in which case Medicare is the primary program with Medicaid in a supporting role.
HAVE MORE QUESTIONS?
Whether you’re enrolling for the first time or reconsidering your current Medicare plan, we can offer personal assistance to help you find the coverage you need. Our experienced team can explain Medicare and answer any questions you have about the different parts and plans. If you’d like help determining the right coverage for you, reach out today.