You’ve seen the commercials on television. You’ve come across Medicare information online. You may even know a few people who currently receive Medicare benefits.
While you may have a basic understanding of Medicare, this isn’t always enough to help you qualify for and secure benefits in the future. Fortunately, with the necessary knowledge, you’ll better understand the Medicare program, how to apply, and potential issues that could stand in your way.
Table of Contents
What is Medicare?
Medicare is a nation-wide health insurance program that was first provided to Americans in 1966.
The primary purpose of the program is to provide health insurance benefits to the following groups of individuals:
- Anyone who is age 65 or older
- Younger people with disabilities
- Individuals with certain diseases, such as End-Stage Renal Disease (requiring dialysis) and Lou Gehrig’s disease
There are three “parts” of Medicare, including:
- Medicare Part A (hospital insurance): Part A covers inpatient hospital stays, skilled nursing care, hospice care, and some forms of home health care.
- Medicare Part B (medical insurance): Part B covers outpatient care, doctor visits, preventative services, and medical supplies.
- Medicare Part D (prescription drug coverage): Part D allows you to add a prescription drug plan to Original Medicare, Medicare Medical Savings Account Plans, and some types of Medicare Cost and Private-Fee-for-Service Plans.
What are Medicare Advantage Plans?
If you’re confused by Parts A, B, and D and wondering if there’s a better way, you may be able to benefit from a Medicare Advantage Plan.
Here’s how it’s defined by The Official U.S. Government Site for Medicare:
“Medicare Advantage Plans are a type of Medicare health plan offered by a private company that contracts with Medicare to provide all your Part A and Part B benefits. Most Medicare Advantage Plans also offer prescription drug coverage. If you’re enrolled in a Medicare Advantage Plan, most Medicare services are covered through the plan. Your Medicare services aren’t paid for by Original Medicare.”
Medicare Advantage Plans
Also known as Medicare Part C, many individuals prefer this option as it’s a comprehensive plan that includes all three parts detailed above.
Original Medicare FAQs
The more you learn about Medicare, the more questions you’ll have. And since it’s such a big part of your health and finances, it’s critical to have a clear understanding of what’s available to you and what you get in exchange for your money. Here are some of the most common questions pertaining to Original Medicare:
Are There Any Limitations Regarding Where I Can Receive Medical Care?
Generally speaking, you can receive care from any health care provider or facility that is part of the Medicare program and accepting Medicare patients. To avoid a potential surprise, verify your coverage with your provider or facility before obtaining service.
Note: you are not required to choose a primary care doctor.
Do I Need to Purchase Medicare Part D?
While you are not required to do so, keep in mind that most prescription drugs are not covered by Original Medicare.
You can purchase a Part D plan through a Medicare-approved insurance company.
Are Referrals Required to See a Specialist?
While referrals are not typically required to see a specialist, you should verify with the specialist that they are enrolled in Medicare.
Just because the referring doctor is enrolled in the program doesn’t mean that the specialist is.
Is There a Deductible With Medicare?
Yes, you will pay out of pocket, up to your deductible, before Medicare kicks in. From there, you’re responsible for paying your coinsurance or copays, while Medicare pays its share.
Do You Have to Pay For Part A and Part B Coverage?
While most people are eligible to receive Part A free of cost, some have to pay a monthly premium.
As for Part B, you’ll pay a premium each month. This amount is deducted from benefits received from one of the following:
- Social Security
- Office of Personnel Management
- Railroad Retirement Board
Adding to the above, let’s take a closer look at basic costs for Part A and Part B:
- Part A: if you don’t qualify to receive premium-free Part A, you can purchase it for up to $458 per month. If you paid Medicare taxes for a minimum of 30 quarters, your premium is set at $252. Also, if you decide to buy Part A, you’re required to have Part B.
- Part B: The majority of people pay the standard Part B premium, which is set at $144.60 in 2020. However, depending on your modified adjusted gross income from your tax return two years ago, you may have to pay $144.60 in addition to an Income Related Monthly Adjustment Amount that can increase the cost as high as $491.60.
Calculating the Cost of Medicare Part D
If you opt to purchase prescription drug coverage, your monthly premium depends on factors such as:
- The plan that you select
- The prescription drugs that you use
- The pharmacy that you use (save money by choosing one in your plan’s network)
- Whether or not the drugs you need are covered by your plan
Tip: before picking up a prescription, check with your insurance provider and/or pharmacy to ensure that it’s covered. If it’s not, consult with your doctor to determine if there’s an alternative drug you can take.
What is Medicare Supplement Insurance?
This question deserves its own section, as the decision to purchase (or not purchase) a Medicare Supplement Insurance policy is a big one. Also known as Medigap, this type of policy pays for some expenses that Original Medicare doesn’t cover.
Here are a few things you need to know about a Medigap plan:
- It’s designed to pay health care costs that Original Medicare doesn’t cover, such as deductibles, copayments, and coinsurance
- Medicare Supplement Insurance is sold by private insurance companies
- In order to purchase Medicare Supplement Insurance, you must first acquire Medicare Part A and Part B
- It’s your responsibility to directly pay the private insurance company that provides your Medigap coverage
- You are not permitted to purchase a Medigap policy if you currently have a Medicare Advantage Plan (unless you make the chance to Original Medicare)
- Medigap doesn’t cover everything, such as private nursing, vision, dental, and hearing aid
You’re not required to purchase Medigap, but it’s something to consider if you’re concerned about being responsible for out of pocket expenses not covered by Original Medicare.
How to Apply for Medicare
If you’re ready to apply for Medicare, there are several steps you can take to obtain coverage. Here’s what you need to do:
Sign up Through Social Security
If you’re turning 65 in the next three months or are older than 65 but not yet receiving Social Security benefits, you’re required to sign up to receive Part A and Part B.
However, if you are already collecting Social Security retirement or disability benefits, you’re automatically enrolled in Part A and Part B. You have two options for signing up (should you need to take this step):
- Use the online system (it takes approximately 10 minutes to complete an application)
- Contact The United States Social Security Administration direct via phone or by visiting your local Social Security office
Select Your CoverageApplying is a good start, but you’re not done yet. Now, it’s time to select your coverage. The United States Social Security Administration (SSA) makes this as simple as possible by providing:
- A comprehensive welcome packet with a rundown of all your options
- Your official “Medicare & You” handbook
Also, if you’re of retirement age, you’re sure to receive plenty of information – such as direct mail and email – from private insurance companies, insurance agents, and brokers.
Carefully select your coverage from the welcome packet, as the choice you make will impact your healthcare and budget for at least the next year.
Tip: The Official U.S. Government Site for Medicare shares a Medicare checklist for year one. It provides a four-step process you can follow to make the most of your benefits and prepare yourself for the future.
Claims and Appeals
Most people never run into trouble with their Medicare coverage or the providers they visit, but there are times when this happens.
If you need to file a claim or appeal, you can do so on the official Medicare website. Some situations in which this may be necessary include:
- You have concerns about the care received by a Medicare-approved provider
- You need to file a claim for Medicare bills
- You need to file an appeal related to a payment or coverage decision (such as if Medicare doesn’t pay for a particular test)
Take Advantage of Medicare
If you qualify for Medicare coverage, there’s no good reason to ignore it. Not only does the program provide access to high-quality care, but you’re likely to save money over other options (such as through private health insurance companies). You should now have a clear idea of what the Medicare federal government health insurance program is all about, including how to apply, what it covers, and the many options available to you.
It won’t be long before you have your own Medicare card!
A Quick Medicare Summary
- Medicare is a nation-wide health insurance program that was first provided to Americans in 1966.
- The primary purpose of the program is to provide health insurance benefits to the following groups of individuals:
- Anyone who is age 65 or older
- Younger people with disabilities
- Individuals with certain diseases, such as End-Stage Renal Disease (requiring dialysis) and Lou Gehrig’s disease
- There are three “parts” of Medicare, including:
- Medicare Part A (hospital insurance)
- Medicare Part B (medical insurance)
- Medicare Part D (prescription drug coverage)
- Medicare Advantage Plans are a type of Medicare health plan offered by a private company that contracts with Medicare to provide all your Part A and Part B benefits.
- Generally speaking, you can receive care from any health care provider or facility that is part of the Medicare program and accepting Medicare patients.
- While you are not required to purchase Medicare Part D, keep in mind that most prescription drugs are not covered by Original Medicare.
- You can purchase a Part D plan through a Medicare-approved insurance company.
- If you are required to see a specialist, you should verify with that specialist that they are enrolled in Medicare.
- You will pay out of pocket, up to your deductible, before Medicare kicks in. From there, you’re responsible for paying your coinsurance or copays, while Medicare pays its share.
- While most people are eligible to receive Part A free of cost, some have to pay a monthly premium.
- As for Part B, you’ll pay a premium each month. This amount is deducted from benefits received from one of the following:
- Social Security
- Office of Personnel Management
- Railroad Retirement Board
- Medigap pays for some expenses that Original Medicare doesn’t cover.
- If you’re turning 65 in the next three months or are older than 65 but not yet receiving Social Security benefits, you’re required to sign up to receive Part A and Part B.
- If you need to file a Medicare claim or appeal, you can do so on the official Medicare website.
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