What Is The Medicare Program

Medicare is our country's health insurance program for people age 65 or older. People younger than age 65 with certain disabilities, or permanent kidney failure, or amyotrophic lateral sclerosis (Lou Gehrig's disease), can also qualify for Medicare. The program helps with the cost of health care, but it doesn't cover all medical expenses or the cost of most long-term care. You have choices for how you get Medicare coverage.

If you choose to have original Medicare coverage, you can buy a Medicare supplement policy (called Medigap) from a private insurance company to cover some of the costs that Medicare does not. A portion of the payroll taxes paid by workers and their employers cover most Medicare expenses. Monthly premiums, usually deducted from Social Security checks also cover a portion of the costs. The Centers for Medicare & Medicaid Services is the agency in charge of the Medicare program. But, you apply for Medicare at Social Security, and they can give you general information about the Medicare program.

The four parts of the Medicare program

• Medicare Part A (hospital insurance) helps pay for inpatient care in a hospital or skilled nursing facility (following a hospital stay). Part A also pays for some home health care, and hospice care
• Medicare Part B (medical insurance) helps pay for services from doctors and other health care providers, outpatient care, home health care, durable medical equipment, and some preventive services
• Medicare Part C (Medicare Advantage) includes all benefits and services covered under Part A and Part B. Some plans include Medicare prescription drug coverage (Medicare Part D) and other extra benefits and services
• Medicare Part D (Medicare prescription drug coverage) helps cover the cost of prescription drugs

Who can get Medicare?

Below we list the different parts of the Medicare program and who qualifies for each part.

Medicare Part A - Hospital Insurance

People age 65 or older, who are citizens or permanent residents of the United States, are eligible for Medicare Part A. You're eligible for "Part A" at no cost at age 65 if:

• You receive or are eligible to receive Social Security benefits
• You receive or are eligible to receive railroad retirement benefits
• Your spouse (living or deceased, including divorced spouses) receives or is eligible to receive Social Security or railroad retirement benefits
• You or your spouse worked long enough in a government job through which you paid Medicare taxes
• You are the dependent parent of a fully insured deceased child

If you don't meet these requirements, you may be able to get Medicare Part A by paying a monthly premium. Usually, you can purchase this coverage only during designated enrollment periods. Please note, even though Social Security's full retirement age is no longer 65, you should sign up for Medicare three months before your 65th birthday. Before age 65, you are eligible for Medicare Part A at no cost if:

• You've been entitled to Social Security disability benefits for 24 months
• You receive a disability pension from the railroad retirement board and meet certain conditions
• You receive Social Security disability benefits because you have Lou Gehrig's disease (amyotrophic lateral sclerosis)
• You worked long enough in a government job through which you paid Medicare taxes, and you've been entitled to Social Security disability benefits for 24 months
• You're the child or widow(er) age 50 or older, including a divorced widow(er), of someone who's worked long enough in a government job through which Medicare taxes were paid, and you meet the requirements of the Social Security disability program
• You have permanent kidney failure and you receive maintenance dialysis or a kidney transplant and you're eligible for or receive monthly benefits under Social Security or the railroad retirement system
• You've worked long enough in a Medicare-covered government job
• You're the child or spouse (including a divorced spouse) of a worker (living or deceased) who has worked long enough under Social Security or in a Medicare-covered government job

Medicare Part B - Medical Insurance

Anyone who's eligible for Medicare Part A at no cost can enroll in Medicare Part B by paying a monthly premium. Some people with higher incomes will pay a higher monthly Part B premium.

If you're not eligible for Part A at no cost, you can buy Part B, without having to buy Part A, if you're age 65 or older and you're:

• A U.S. citizen
• A lawfully admitted noncitizen, who has lived in the United States for at least five years
• You can only sign up for Part B during designated enrollment periods. If you don't enroll in Part B when you're first eligible for it, you may have to pay a late enrollment penalty for as long as you have Part B coverage.

Medicare Part C - Medicare Advantage plans

If you receive your Part A and Part B benefits directly from the government, you have original Medicare. If you receive your benefits from a Medicare Advantage organization or other private company approved by Medicare, you have a Medicare Advantage plan. Many of these plans provide extra coverage and may lower your out-of-pocket costs.

If you have Medicare Parts A and B, you can join a Medicare Advantage plan. With these plans, you can't have a Medigap policy, because Medicare Advantage plans cover many of the same benefits a Medigap policy covers. This includes benefits like extra days in the hospital after you've used days that Medicare covers. Medicare Advantage plans include:

• Medicare coordinated-care plans
• Medicare preferred provider organization plans
• Medicare private fee-for-service plans
• Medicare specialty plans

If you decide to join a Medicare Advantage plan, you use the health card that you get from your Medicare Advantage plan provider for your health care. Also, you might have to pay a monthly premium for your Medicare Advantage plan because of the extra benefits it offers. You can enroll in a Medicare Advantage plan during your initial enrollment period, the first time you're eligible for Medicare. You can also enroll during the annual Medicare open enrollment period from October 15 - December 7 each year. The effective date for the enrollment is January 1 of the upcoming year. There are also special enrollment periods for some situations.

Medicare Part D - Medicare Prescription Drug Coverage

Anyone who has Medicare Part A or Part B is eligible for Part D (Medicare prescription drug coverage). Part D benefits are available as a stand-alone plan or built into Medicare Advantage. The drug benefits work the same in either plan. Joining a Medicare prescription drug plan is voluntary, and you pay an extra monthly premium for the coverage. Some beneficiaries with higher incomes will pay a higher monthly Part D premium.

If you don't enroll in a Medicare drug plan when you're first eligible, you may pay a late enrollment penalty if you join a plan later. You'll have to pay this penalty for as long as you have Medicare prescription drug coverage. However, you won't pay a penalty if you have Extra Help, or another creditable prescription drug plan. To be creditable, the coverage must pay, on average, at least as much as Medicare's standard prescription coverage.

You can enroll during your initial enrollment period, the first time you're eligible for Medicare. You can also enroll during the annual Medicare open enrollment period from October 15 - December 7 each year. The effective date for the enrollment is January 1 of the upcoming year. There are also special enrollment periods for some situations.