Medicare can feel overwhelming, but understanding the basics is the first step toward making informed healthcare decisions.
Medicare is a federal program providing health coverage primarily for those 65 and older, as well as individuals with certain disabilities. It’s divided into four parts—each covering different aspects of healthcare services. From hospital care to prescription drugs, Medicare ensures millions of Americans have access to essential medical services. However, it’s important to know what each part covers, how and when to enroll, and what out-of-pocket costs you might face. Here’s a quick guide to the key facts about Medicare to help you get started.
10 Quick Medicare Facts
1. Medicare Has Four Parts:
Medicare is divided into four parts—Part A, Part B, Part C, and Part D.
- Medicare Part A: It’s often referred to as "hospital insurance." This part covers inpatient hospital care, skilled nursing facility care, hospice services, and some home health care.
- Medicare Part B: It’s known as "medical insurance." Part B is for outpatient services, including doctor visits, preventive services, and medical supplies like durable medical equipment.
- Medicare Part C (Medicare Advantage): This is a private insurance alternative to Original Medicare (Parts A and B). It includes all benefits from Parts A and B but often adds extras like dental, vision, hearing, and prescription drug coverage. It's offered by private insurance companies approved by Medicare.
- Medicare Part D: This part covers prescription drugs and is available through private insurers. It's often included in Medicare Advantage plans but can be a standalone plan for those with Original Medicare.
2. Eligibility Begins at 65:
Most people become eligible for Medicare when they turn 65. However, individuals with certain disabilities or conditions like End-Stage Renal Disease (ESRD) can qualify earlier.
3. Medicare Is Not Free:
While Part A is usually premium-free if you or your spouse paid Medicare taxes for at least 10 years, Parts B, C, and D require monthly premiums. Additionally, there are deductibles, co-payments, and coinsurance costs that you may be responsible for. Learn more about Medicare costs.
4. Medicare Doesn’t Cover Everything:
Original Medicare does not cover routine dental care, vision care, hearing aids, or long-term care. Many people choose to purchase additional insurance, like Medigap or Medicare Advantage, to help cover these gaps.
5. You Have an Initial Enrollment Period:
Your Initial Enrollment Period (IEP) begins three months before your 65th birthday, includes the month you turn 65, and ends three months after. Missing this period could result in late enrollment penalties.
6. Original Medicare vs. Medicare Advantage:
- Original Medicare (Parts A & B): Directly provided by the federal government, covering hospital and medical services. It doesn’t include prescription drugs (Part D) or extras like dental and vision. You can see any doctor that accepts Medicare nationwide, but you’ll need separate plans for drug coverage and supplemental insurance (Medigap).
- Medicare Advantage (Part C): Offered by private insurance companies, combining Parts A & B, and often includes Part D (prescription drugs) and additional benefits like dental, vision, and wellness programs. These plans have a network of doctors, and coverage may vary based on your location. Compare Original Medicare vs. Medicare Advantage.
7. Medicare Advantage Plans Offer Extra Benefits:
If you choose a Medicare Advantage Plan, you might have access to additional benefits not offered by Original Medicare, such as fitness programs, transportation for medical appointments, and over-the-counter drug allowances.
8. Prescription Drug Coverage Is Crucial:
Even if you don’t take many medications now, it’s important to consider enrolling in a Part D plan when you first become eligible to avoid late enrollment penalties.
9. Annual Enrollment Period:
Each year, from October 15 to December 7, you can make changes to your Medicare coverage. This is known as the Annual Enrollment Period (AEP), and it’s a good time to review your plan to ensure it still meets your needs.
10. You Can Switch Between Plans:
If your healthcare needs change, you can switch between Original Medicare and Medicare Advantage during certain enrollment periods. However, be aware of the different rules and potential costs involved in making changes.
If you find Medicare confusing, you’re not alone. There are resources available, such as State Health Insurance Assistance Programs (SHIPs), to help you understand your options and make informed decisions.
Reviewed By: Keith Gilbert