This is an overview of information and topics related to Medicare. We also provide in-depth articles on most of these topics, which will provide more specific details and actionable information. Just click through the links if you have questions about any of the programs or plans covered on this page.
What is Medicare? How does Medicare work?
Medicare is a health insurance program provided through the federal government of the United States. It is managed by a government agency called the Centers for Medicare & Medicaid Services (CMS). Medicare coverage is divided into “parts,” which are bundles of related healthcare coverage. Original Medicare, the coverage offered by CMS rather than private carriers, consists of two parts.
- Part A – Medicare Part A covers hospital-related care and costs
- Part B – Medicare Part B covers doctor visits, durable medical equipment, and medically-necessary care
Medicare Made Easy Part One: How Medicare Works
Who qualifies for Medicare?
Individuals living in the United States who are 65 and older or under 65 on Social Security Disability Benefits are eligible for Medicare coverage.
People who have paid into Medicare taxes for about 10 years receive Medicare coverage with reduced premiums. While Medicare covers people who have not paid those taxes or who have higher incomes, they may have to pay more for Medicare coverage.
Do You Automatically Get Medicare with Social Security?
Some people may be automatically enrolled into Medicare if they’re already receiving Social Security benefits, but many people are not automatically enrolled. Do not assume you will begin receiving coverage when you turn 65. You may have to apply for Medicare through the Social Security Administration.
Private Medicare Plans
In addition to the health coverage provided by the government in Medicare Parts A and B, the Centers for Medicare & Medicaid Services contracts with private insurance companies so they can offer Medicare plans as well. If you are enrolled in Medicare Parts A and B, you will continue to receive 100% of that coverage regardless of any private plan you may choose. These private plans are carefully monitored by CMS to ensure they meet quality standards. Every year, Medicare evaluates plans based on a 5-star rating system. The 5 star scale, with 5 being the best, is based on the coverage provided and consumer experiences.
Part C – Medicare Advantage
Medicare Part C (Medicare Advantage) plans are offered as a way to bundle Original Medicare coverage. These plans sometimes offer additional benefits such as:
Medicare Advantage plans may also include prescription drug coverage so you don’t have to have a stand-alone prescription plan.
Part D – Prescription Drugs
Original Medicare does not cover your prescriptions, but obtaining this coverage is strongly encouraged by a fee built into the Medicare program if you don’t have prescription drug coverage for 63 days or longer.
Prescription drug plans are offered by private companies and include formularies with different costs for different tiers of medications.
Medicare Supplement plans, sometimes also called “Medigap,” do not cover additional benefits beyond Original Medicare. Instead, these plans help cover your copays, deductibles, and coinsurance. Medicare beneficiaries are typically responsible for 20% of each Part B service; a Supplement plan would help you pay that 20%.
How Much Does Medicare Cost?
Your specific Medicare costs will vary greatly depending on your individual circumstances, but we can help you understand what some of those costs may be.
- Premium: Most people don’t pay a premium for Part A. If you didn’t pay Medicare taxes and wish to purchase Part A coverage, you will pay a monthly premium.
- Deductible: You will have a yearly deductible of about $1,600 in 2023.
- Coinsurance: You have $0 coinsurance for days 1-60 in the hospital, with increasing costs at day 61 and 91
- Premium: You will have a set monthly Part B premium that may change every year. If you have a higher income, you may pay a higher premium.
- Deductible: Yearly deductible of $226 in 2023. This may change every year.
- Coinsurance: After paying your deductible, you are responsible for 20% of the Medicare-Approved Amount for doctor services, outpatient therapy, and durable medical equipment.
- The “Medicare-Approved Amount” is an amount that Medicare has agreed to pay for a certain service. It may be less than that provider usually charges.
- Premium: Begins at $0. You must continue paying your Part A and B premiums.
- According to 2023 plan research at the Kaiser Family Foundation, 66% of Medicare Advantage plans charge no additional premium, and 99% of beneficiaries (outside of Alaska) have access to a Medicare Advantage plan with a $0 premium.
- Deductible: Varies by plan.
- Coinsurance: Varies by plan.
If you are also enrolled in Medicaid or have a low income, you may be eligible for help with your Medicare costs.
What if I’m Eligible for Medicare and Still Working?
Using Medicare coverage may be the right choice for some people who are working. It is very dependent on the coverage offered by your employer, your health, and the Medicare coverage available in your area. There can also be fees related to delaying Medicare coverage, although those are usually waived if you have some other form of “creditable” coverage – essentially something that is close to the standard of coverage that Medicare offers for you.
Read more in our article “Medicare and Still Working Past 65.”
Annual Enrollment Period (AEP)
Medicare Annual Enrollment Period runs each year from October 15 to December 7. What is the Annual Enrollment Period vs. Open Enrollment Period?
Initial Enrollment Period (IEP)
Your Initial Enrollment Period generally surrounds your 65th birthday but may occur if you otherwise become eligible for Medicare for the first time.
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