What is Medicare?
Medicare is a government health insurance program for people age 65 years and older or who have a disability or end-stage renal disease (commonly known as kidney failure).
But, Medicare is NOT…
Insurance for dependents.
Continuation of Medicare services
Medicare recipients do not have to sign up for Medicare on an annual basis. However, it would be in their best interest to review the various health plans during the Open Enrollment Period every year. The prices of coverage and prescription drug plans change every year, and recipients can learn about the latest adjustments from Medicare materials such as, “Evidence of Coverage (EOC)” and “Annual Notice of Change (ANOC).”
Parts A, B, C, and D
Medicare coverage is broken down into four main areas, called parts A, B, C, and D.
Part A: Known as hospital insurance. Helps cover inpatient hospital care, skilled nursing facility (SNF) care, hospice, and home health services.
Part B: Known as medical insurance. Helps cover outpatient care, some home health care, durable medical equipment (such as walkers and blood sugar monitors), some preventive services, and services from doctors and other healthcare providers.
Part C: Known as Medicare Advantage, which is administered by private health insurance companies authorized by Medicare. Includes all that is covered under Part A and Part B, and usually includes Part D (see below), and sometimes additional benefits and services for an extra cost.
Part D: Known as Medicare prescription drug coverage. As with Part C, Medicare-authorized private insurance companies administer Part D.
You can get Medicare Parts A and B in two different ways: Original Medicare or a Medicare Advantage Plan.
Original Medicare (Part A or B). People who choose Original Medicare begin by selecting Part A (hospital insurance) or Part B (medical insurance), or both. Then they can get Part D (prescription drug coverage) as an option. Finally, they can decide if they want Medicare supplement insurance, known as a Medigap policy, which is sold by private insurers and covers some or all of the costs that Original Medicare does not cover. Medigap is available to those who have both parts A and B. See the following “Services not covered by Medicare” section for more about Medigap.
Medicare Advantage Plan (Part C). In this scenario, people choose a care plan offered by a private insurance company to administer the Part A and B benefits. The plans can be in the form of a health maintenance organization (HMO), or preferred provider organization (PPO), Private-Fee-For-Service (PFFS) plan, Special Needs Plan (SNP), HMO Point of Service (HMOPOS) plan, or Medical Savings Account (MSA) plan. All Part C plans must cover Parts A and B, and usually also include Part D. If a Medicare Advantage Plan does not automatically offer prescription drug coverage, the Medicare recipient may have the option of choosing a separate Part D plan. Note: Those who have a Medicare Advantage Plan cannot also have (or be sold) a Medicare supplement insurance (Medigap) policy.
Services not covered by Medicare
To find out online whether a specific test, item, or service is covered by Original Medicare, visit this page: https://medicare.gov/coverage/your-medicare-coverage.html. Or, see the “Need more information?” section below.
If you have Original Medicare, you have the option of buying a Medigap policy to pay for costs that are not covered by Medicare, such as copayments, coinsurance, and deductibles.
Paying for Medicare
On average, Medicare pays about 75 percent of the healthcare you use. Medicare recipients pay monthly premiums for Original Medicare coverage. Those who paid Medicare taxes while they were employed usually qualify for premium-free Part A. Most Medicare recipients pay a premium for Part B.
However, those who qualify for low-income assistance from their state may pay less than others. At the other end of the spectrum, people whose income is over a certain level pay higher premiums.
Also, Medicare recipients may pay deductibles, coinsurance or copayments (their cost share) based on the type of coverage they choose to use.
How does Medicare work with other insurance?
Some people with Medicare may also have other types of insurance, such as employer group health coverage. There are rules that dictate which insurance pays first, up to the limits of its coverage. If you are thinking about Medicare and you have other insurance, here are a few general guidelines.
Medicare pays first when a Medicare recipient:
The group health plan pays first when a Medicare recipient:
For people who have end-stage renal disease (kidney failure) at any age, their group health plan pays for the first 30 months after they qualify to enroll in Medicare. Medicare pays first after this 30-month period.
How has the Affordable Care Act (ACA) changed Medicare?
Medicare services have been broadened to include more preventive/screening procedures, such as mammograms and colonoscopies, without Medicare recipients having to pay out of pocket. ACA also reduced the cost for some brand-name and generic prescription medications during certain stages of part D drug coverage.
Also, a new feature has been built into the MyMedicare.gov website. Blue Button is an online tool that allows people to download their personal health information on their computers or mobile devices. The purpose of Blue Button is to make it easier to view medical claims and to share medical history with a healthcare provider.
The Health Insurance Marketplace, which was established under the ACA, is separate from Medicare. A person who has Medicare cannot obtain an additional plan from the Health Insurance Marketplace. However, if a person already has a plan from the Marketplace but then qualifies for Medicare, that person can cancel the Marketplace plan once he or she starts using Medicare.
Need more information?
Medicare Rights Center
“Medicare & You: 2014.” Centers for Medicare & Medicaid Services, accessed February 24, 2014.
“What Medicare covers.” Medicare.gov, accessed February 24, 2014.
“The Affordable Care Act & Medicare.” Medicare.gov, accessed February 24, 2014.
This material is intended for informational purposes only and should not be construed as medical advice or used in place of consulting a licensed medical professional. You should consult with your doctor to determine what is right for you.