Medicare Basics
What is Medicare?
Medicare is the federal health insurance program for people 65 or older, people under 65 with certain disabilities, and people of any age with End-Stage Renal Disease (ESRD).
When and how do I sign up for Medicare?
If you're already getting Social Security benefits, you'll be automatically enrolled into Medicare and will receive your Medicare card three months before your 65th birthday (or 25th month of disability).
If you're not receiving Social Security, you may need to manually sign up for Medicare Part A & Part B during your Initial Enrollment Period one of the following ways:
What are the different parts of Medicare?
Part A helps pay for hospital, skilled nursing facility, home care, and hospice.
In most cases, you will not pay a monthly premium for Medicare Part A if you or your spouse paid Medicare taxes for at least 10 years, or 40 quarters, while working.
Part B helps pay for physician services, outpatient care, durable medical equipment, and other medical services.
Most people will pay a monthly premium for Part B.
Part A & Part B is known as Original Medicare and covers about 80% of allowable medical charges.
Part C refers to Medicare Advantage plans.
You must have Part A and Part B to qualify. Medicare pays a private insurer to provide your healthcare coverage. This incorporates your Part A, Part B, and usually Part D into one plan.
These plans start at $0.00 per month and may include extra benefits not covered by Original Medicare.
Part D refers to prescription drug coverage.
People with Original Medicare & Medicare Supplement coverage must purchase a Part D plan separately.
Part D is usually included for those on Medicare Advantage (Part C) plans.
The Parts of Medicare
Original Medicare
Part A + B
Also known as…
Which “part”?
“Hospital” Insurance
Part A
“Medical” Insurance
Part B
Medicare Advantage - Parts A + B + more
Part C
Prescription drug coverage
Part D
Medicare Supplement Insurance
Medigap
What are Medicare Supplement (Medigap) plans?
Medicare Supplement plans (also known as Medigap) fill the gaps of Original Medicare, which usually consists of 20% of allowable medical charges that Original Medicare doesn't cover.
Insurance companies offering Medicare Supplements must use standardized benefit packages.
Medicare Supplements do not include Part D prescription drug coverage.
Medicare Supplements do not include benefits beyond what Medicare covers; such as dental, vision, and hearing coverage.
Medicare Supplements may require applicants to pass a health questionnaire to qualify for coverage.
Most Medicare Supplement plans allow you to receive care from any Medicare-certified provider who accepts Original Medicare.
What are Medicare Advantage plans?
Medicare Advantage plans provide all of your Part A, Part B, and usually Part D benefits. These plans are offered by private insurance companies that are paid by Medicare to assume responsibility for your healthcare.
Insurance companies market a variety of benefit designs that are closely monitored and approved by Medicare.
Medicare Advantage plans usually include preset copays, coinsurance, and out-of-pocket limits for medical services.
Medicare Advantage plans may include benefits beyond what Medicare covers; such as dental, vision, hearing aids, and international emergency coverage.
Medicare Advantage plans do not require medical underwriting, except that the applicant must not have End Stage Renal Disease.
Most healthcare providers only accept certain Medicare Advantage plans, which use various types of networks (HMO, PPO, etc.).
Step 1
Do you want Original Medicare or a Medicare Advantage Plan?
Original Medicare includes:
Part A (Hospital Insurance) and/or
Part B (Medical Insurance)
Medicare provides this coverage directly.
You have your choice of doctors, hospitals, and other providers that accept Medicare.
Generally, you or your supplemental coverage pay deductibles and coinsurance.
You usually pay a monthly premium for Part B.
Medicare Advantage - such as an HMO or PPO
Part C Includes BOTH Part A (Hospital Insurance) and Part B (Medical Insurance)
Private insurance companies approved by Medicare provide this coverage.
In most plans, you need to use plan-approved doctors, hospitals, and other providers, otherwise you may pay more or all of the costs.
You may pay a monthly premium (in addition to your Part B premium) and copayment or coinsurance for covered services.
Various costs, extra coverage, and rules vary by provider and plan.
Step 2
Do you want Prescription Drug Coverage (Part D)?
If you want drug coverage under Original Medicare, you must join a Medicare Prescription Drug Plan.
You will usually play a monthly premium.
These plans are run by private companies approved by Medicare.
If you want drug coverage and it is offered by your Medicare Advantage Plan, in most cases you will be required to get it through your plan.
Most Medicare Advantage Plans include Part D as an embedded benefit. If you have credible drug coverage elsewhere (e.g. through the VA) or simply do not want drug coverage, you may buy a Medicare Advantage Plan that doesn’t include Part D.
Note: If you join a Medicare Advantage Plan, you cannot use Medicare Supplement Insurance (Medigap) to pay out-of-pocket costs from your Medicare Advantage Plan.
If you already have a Medicare Advantage Plan, you cannot be sold a Medigap policy. You can only use a Medigap policy of you disenroll from your Medicare Advantage Plan and return to Original Medicare.
Step 3
(For Medigap only) Do you want a Medigap Supplement plan?
You may want to get coverage that fills gaps in the Original Medicare coverage. You may choose to buy a Medicare Supplement (Medigap) policy from a private company.
Costs vary by policy and company.
Employers/unions may offer similar coverage.
You may have health underwriting to purchase a Medicare supplement.