Understanding Medicare

Medicare is a federal health insurance program in the United States that primarily serves individuals aged 65 or older, some younger people with disabilities, and people with End-Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS). It is administered by the Centers for Medicare & Medicaid Services (CMS).

Parts of Medicare

  • Part A (Hospital Insurance):
    • Covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care.
    • Most people don’t pay a monthly premium if they or their spouse paid Medicare taxes for enough years while working.
    • Deductibles and coinsurance amounts apply.
  • Part B (Medical Insurance):
    • Covers doctors’ services, outpatient care, durable medical equipment, and preventive services.
    • Most people pay a monthly premium (higher for individuals with higher incomes).
    • A yearly deductible and 20% coinsurance typically apply after the deductible is met.
  • Part C (Medicare Advantage Plans):
    • Private insurance plans approved by Medicare that provide all Part A and Part B benefits.
    • Many offer extra benefits not in Original Medicare (vision, hearing, dental) and often prescription drug coverage.
    • You must be enrolled in Part A and Part B to join.
    • Premiums, deductibles, and out-of-pocket costs vary by plan.
  • Part D (Prescription Drug Coverage):
    • Helps cover prescription drug costs.
    • Offered through private insurance companies approved by Medicare.
    • Available as a stand-alone plan or included in a Medicare Advantage Plan (MAPD).
    • Premiums, deductibles, and copayments/coinsurance vary depending on the plan and drugs you take.

Enrollment Periods

  • Initial Enrollment Period (IEP): A 7-month window beginning 3 months before your 65th birthday, including your birthday month, and ending 3 months after.
  • Special Enrollment Period (SEP): If you delay Part B (and sometimes Part A) due to employer or union coverage, you may qualify for an SEP.
  • General Enrollment Period (GEP): Runs January 1 – March 31 each year. Coverage starts July 1. Late penalties may apply if you missed IEP/SEP.
  • Annual Enrollment Period (AEP): October 15 – December 7 each year. During this period you can:
    • Switch between Original Medicare and Medicare Advantage.
    • Switch from one Medicare Advantage Plan to another.
    • Join, switch, or drop a Medicare Prescription Drug Plan.

Medigap (Medicare Supplement Insurance)

Medigap policies are sold by private companies to help pay costs Original Medicare doesn’t cover (copayments, coinsurance, deductibles). They only work with Original Medicare and not with Medicare Advantage Plans.

Key Considerations

  • Cost-Sharing: You are responsible for deductibles, coinsurance, and copayments even with Medicare.
  • Network Restrictions: Medicare Advantage Plans often have provider networks you must use.
  • Formularies: Part D plans have drug lists; check if your medications are covered.
  • Coordination of Benefits: If you have other insurance (e.g., employer, Medicaid), rules decide which pays first.