What is Medicare?
Medicare is a federal health insurance program meant to ensure that all seniors have access to affordable insurance. The program is available to people age 65 years or older, certain younger people with disabilities, and anyone suffering from End-Stage Renal Disease (ESRD) or permanent kidney failure requiring dialysis or a transplant.
It is composed of four main parts:
- Part A (Hospital Insurance) offers basic hospital insurance.
- Part B (Medical Insurance) covers medically necessary services and preventative services. Part A and Part B are known as “Original Medicare.”
- Part C (Advantage) combines Part A and Part B (and sometimes Part D) into one plan offered by private insurance companies.
- Part D (Prescription Drug Coverage) provides optional prescription drug coverage.
What Is the Difference Between Part A and Part B Medicare?
Part A is basic hospital insurance that generally covers the following:
- Hospital care
- Nursing facility care
- Nursing home care
- Home health services
People age 65 and older typically do not have to pay a premium for it if they meet the following requirements:
- They currently receive retirement benefits from either Social Security or the Railroad Retirement Board.
- They are eligible to get the above retirement benefits but have not yet filed for them.
- They or their spouse had government employment that covered Medicare.
Those who do not meet the above qualifications may be required to pay a premium for Part A. In most cases, those who are required to purchase it must also purchase Part B. (Those who are eligible to receive Part A free of cost are not required to purchase Part B.)
Medicare Part B covers two types of services—medically necessary services and preventive services.
Medically necessary services are services or supplies that are needed to either diagnose or treat a medical condition. This can include the following:
- Doctor services
- Outpatient services
- Ambulance services
- Durable medical equipment
- Mental health services
- A second opinion before surgery
- Limited outpatient prescription drugs
Preventive services include the following:
- Certain doctor services, such as an annual checkup
- Certain screenings
- Lab tests
- Clinical research
Medically necessary procedures require a copay, but preventive services are covered at no cost. The standard monthly premium amount for it in 2017 is $134, but the price may vary. Contact your local Social Security office for the exact amount you will need to pay.
What Is Medicare Part C?
Those enrolled in Part A and B can also choose to get Part C, or Advantage. Advantage Plans are private health insurance plans that replace Part A and B; these plans are required to provide at least the same coverage as Part A and B, but may offer additional coverage as well, including vision, dental, hearing, and some prescription coverage. These plans typically cover specific networks, which often means you must go to certain doctors or hospitals within the network.
Available Advantage Plans include:
- Health Maintenance Organization (HMO)
- Preferred Provider Organization (PPO)
- Private Fee-For-Service (PFFS)
- Medical Savings Account (MSA)
- HMO Point-Of-Service (HMOPOS)
- Special Needs Plans (SNPs)
Pricing for these plan varies, so you will need to contact these private plans directly for pricing information.
What Is Part D?
Part D provides prescription drug coverage for prescription costs not covered by Part A and B. These plans are available two ways: either as a standalone prescription drug plan from an insurer that offers it in conjunction with Part A and B or as part of a Advantage Plan that includes Part D coverage.
How Do I Sign Up?
You can enroll during your seven-month Initial Enrollment Period, which begins on the first of the month three months prior to your 65th birthday, and includes the month of your 65th birthday and the three months after. If you are under the age of 65 and are eligible due to disability, your Initial Enrollment Period will vary depending on when your disability benefits began.
Signing up is simple:
- Apply online.
- Visit your local Social Security office.
- Call the Social Security Administration at 1-800-772-1213 (TTY: 1-800-325-0778).
- If you already have Part A and want to apply for Part B, complete this application form and return it to Social Security office.
Since Advantage and Part D Plans are private plans, you will need to choose a plan and contact that plan provider directly. Plans also vary from state to state, so be sure to search for plans in your state.
If you need help choosing a plan that best suits your needs and budget, try our Suggest a Plan Tool.