Medicare is the federal health insurance program primarily for people aged 65 and older, though it also covers younger individuals with certain disabilities or End-Stage Renal Disease (ESRD). It’s designed to help cover the cost of healthcare services, but navigating its structure can be confusing. Here’s a breakdown of the basics to help you understand how Medicare works and what it offers.
The Four Parts of Medicare
Medicare is divided into four parts, each covering different aspects of healthcare:
- Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facility care, hospice services, and some home health care. Most people don’t pay a premium for Part A if they or their spouse paid Medicare taxes for at least 10 years.
- Part B (Medical Insurance): Covers outpatient care, doctor visits, preventive services, durable medical equipment, and some home health care. Part B requires a monthly premium, which varies based on income.
- Part C (Medicare Advantage): Offered by private insurance companies approved by Medicare, these plans bundle Part A and B coverage and often include Part D (prescription drugs). Many also offer extra benefits like dental, vision, and hearing care. Medicare Advantage plans may have lower out-of-pocket costs but require using a network of providers.
- Part D (Prescription Drug Coverage): Helps cover the cost of prescription medications. These plans are also offered by private insurers and vary in terms of covered drugs, premiums, and copayments.
Original Medicare vs. Medicare Advantage
You can choose between Original Medicare (Parts A and B) or a Medicare Advantage Plan (Part C). Original Medicare allows you to see any provider who accepts Medicare, but it doesn’t include drug coverage unless you add Part D. You can also purchase a Medigap policy to help cover out-of-pocket costs like deductibles and coinsurance.
Enrollment and Eligibility
Most people become eligible for Medicare at age 65. The initial enrollment period begins three months before your 65th birthday and ends three months after. Missing this window can result in late enrollment penalties. Open enrollment starts mid-October so if you want to switch your Medicare coverage, now is the time to start planning.
Why It Matters
Understanding Medicare helps you make informed decisions about your healthcare coverage. Whether you’re approaching retirement or helping a loved one navigate their options, knowing the basics can reduce stress and ensure access to the care you need.
