How does Medicare Work?
Medicare has four basic parts that help with health care costs. Each part provides coverage for different types of health care services.
- Part A: Hospital insurance
- Part B: Medical insurance
- Part C (Medicare Advantage): Includes Parts A and B, sometimes Part D
- Part D: Outpatient prescription drugs
Parts A and B are sometimes known as “Original Medicare.” Keep in mind that original Medicare was not designed to cover all your medical expenses.
Medicare Supplement insurance: This optional coverage helps to pay for expenses beyond what is covered by Medicare. There are several Medicare Supplement insurance plans, each with different benefits and premiums, so you can choose the plan that works best for your specific needs. Medicare Supplement insurance plans are identified by the separate letters A, B, C, D, F, F-HD, G, K, L, M and N. The basic benefits of each plan are exactly alike for all insurance companies.
When are you eligible for Medicare?
If you answer “yes” to at least one of the following questions, you may be eligible.
- Are you age 65 or older and have Social Security or Railroad Retirement Board benefits?
- Are you under age 65 with certain disabilities?
- Do you have ALS (amyotrophic lateral sclerosis) or, at any age, End-Stage Renal Disease?
To be eligible for a Medicare Supplement insurance plan, you must have Medicare Part A and Part B.
To be eligible for a Medicare Part D or Medicare Advantage plan, you must be entitled to benefits under Medicare Part A and/or enrolled under Part B.
You must continue to pay your Medicare Part B premium.
When do I enroll?
If you are nearing 65, you can enroll in Medicare during the seven months of the initial enrollment period. The initial enrollment period includes the three months before your 65th birthday, the month of your 65th birthday and the three months after the month of your 65th birthday.
Medicare Part A — Hospital Insurance
If you are getting benefits from Social Security, you automatically get Part A benefits starting the first day of the month that you turn 65.
You will receive a package of information from Medicare at the beginning of your initial Medicare enrollment period. The package will contain your Medicare card and information about your benefits.
If you don’t automatically receive a Medicare enrollment notice, call Social Security at 800-772-1213 and request a Medicare enrollment package.
For most people, Medicare Part A is free.
Medicare Part B — Medical
There are three opportunities to sign up for Part B: the initial Medicare enrollment period, the special Medicare enrollment period and the general Medicare enrollment period.
If you or your spouse are still working and are enrolled in a group health plan, you may decide to delay enrolling in Part B until you retire. This is because you may have “Creditable Coverage”; check with your employer benefits administrator to see if this applies to you. Then you may be eligible for the “Special Enrollment Period” once you retire.
|Initial Enrollment Period||General Enrollment Period||Special Enrollment Period|
|Who is eligible?||People turning 65 or have been receiving Social Security Disability benefits for 24 months||People who missed the Initial Enrollment Period or declined or canceled Medicare Part B coverage and did not have any other coverage||People who have employer or union medical benefits or dropped prior Part B coverage to return to work. COBRA and retiree health plan participants are not eligible for a Special Enrollment Period.|
|When is the enrollment period?||Seven months that include:
||January 1 to March 31 each yearDuring this time, you may enroll in Part B, but your benefits will not go into effect until July 1 of the same calendar year.||
|What is the late enrollment penalty?||
||No penalty if you enroll within the 8-month window|
Medicare Part C — Medicare Advantage Plans
Medicare Advantage plans sometimes called “Part C” or “MA Plans,” are offered by private insurance companies.
Medicare Advantage is a program that offers other health plan options that pay for original Medicare-covered services (Parts A and B) plus additional benefits and services such as:
- Health maintenance organizations (HMOs)
- Preferred provider organizations (PPOs)
- Private fee for service (PFFS) plans
- Special needs plans (SNPs)
Medicare Advantage Plans — Costs
In a Medicare Advantage plan, you may pay a monthly premium as well as copayments – which are usually a fixed amount – when you receive services.
The Medicare Advantage premium includes coverage for Medicare Part A and Medicare Part B benefits, prescription drug coverage (if offered) and any other benefits allowed by the plan.
You will also continue to pay your Medicare Part B premium while enrolled in Medicare Advantage.
Medicare Advantage Plans — Drug Coverage
Health insurers offering Medicare Advantage plans generally must provide at least one plan with basic prescription drug coverage, but most offer multiple options. If you choose a Medicare Advantage plan that offers prescription drug coverage, you must receive your benefits through that plan, rather than enrolling in a separate Medicare prescription drug plan.
Medicare Advantage Eligibility
You are eligible for Medicare Advantage if you are entitled to Medicare Part A and enrolled in Medicare Part B. If you choose a Medicare Advantage plan, your coverage becomes effective the same date as your Medicare coverage.
Medicare Part D — Medicare Prescription Drug Coverage
Medicare Prescription Drug Plans are approved by Medicare and designed to cover your outpatient and maintenance prescription drugs. It enhances your Original Medicare and/or Medicare Supplement insurance coverage. Even if you don’t take any prescription drugs, consider enrolling when you become eligible. You want to protect your health and finances and be covered if your situation changes.
For more information on Medicare Part D click here.