Intro To Medicare

The two main parts of Medicare — hospital insurance (Part A) and medical insurance (Part B) — help protect people age 65 and over from the high costs of health care. This is the primary insurance program for this age group, organized by the federal government, and paid for by tax dollars and personal contributions via monthly premiums.

Medicare Part C, or Medicare Advantage, is purchased through a private insurer to cover individuals who do not have Part A or Part B. This way, you can be a Medicare member and be connected to an HMO or PPO network, or also choose a Private Fee-for-Service. Medicare Advantage members also have the option of opening a Medicare Medical Savings Account.

The hospital insurance portion, Medicare Part A, helps pay the cost of inpatient hospital care and certain kinds of follow up care. Medicare Part B covers a percentage of the costs for physicians’ services and certain other medical items and services not covered by hospital insurance.

Part D is the Medicare Prescription Drug Program, which is stand-alone coverage for prescription medications. It is an optional benefit for which you pay an additional premium. Medicare pays for 75 percent of each prescription cost through this plan, allowing you to receive more affordable rates on your medications. If you don’t need medications, however, it is unnecessary to enroll in this coverage.


Paying for Medicare

Taxpayers contribute to Medicare with each paycheck, and the Affordable Care Act added more ways for tax dollars to go towards this program. Medicare tax is part of the Social Security taxes each worker, employer, and self-employed person pays. About three-fourths of the cost of the medical insurance program is paid by the federal government after collecting tax dollars from the general public. Medicare beneficiaries are still required to pay a monthly premium for their coverage, however.


Medicare Eligibility

Once you reach age 65, individual health plans are no longer an option. Medicare is available when you are age 64 years and 9 months old, regardless of your current health status or previous conditions.

Certain individuals under age 65 are eligible, only if they have a disability and have been entitled to Social Security disability benefits for 24 months or longer. Those who have end-stage renal disease (ESRD), can also apply for protection through Medicare Part A or B.

Individuals who are eligible for a Social Security or railroad retirement check either as a worker or eligible family member, are also eligible for hospital insurance protection when they reach age 65. Government employees and, under certain conditions, their family members may become eligible for hospital insurance based on the worker’s Government employment.


Medigap Plans

Medigap, or a Medicare supplement, operates through a private health insurance carrier, designed to provide reimbursements under Medicare for the hospital, medical, or surgical expenses of Medicare beneficiaries. Each state imposes strict regulations on the sale of Medicare supplements, yet they are available to cover certain services not paid for by Medicare.

Medicare supplement plans can help offset the costs of non-covered services, like a supplemental insurance policy would for an individual health plan. This is not a stand-alone plan, and you must have Medicare Part A and Part B in order to apply for a Medigap policy. Those who are enrolled in a Medicare Advantage Plan are required to cancel their present coverage before starting a Medicare supplement policy – the two cannot coexist.

Like a Medicare Advantage plan, or any other insurance, you pay a monthly premium for coverage on top of the Part B premium you pay to the government for Medicare. Don’t expect your Medigap plan to pay for every type of care you need, though, as they do not cover dental, vision, hearing aids, private nursing, or long-term care.