Medicare Overview
As you age in to Medicare, it’s important to understand Medicare and how it works. This article provides a quick overview. Medicare is federal health insurance for anyone age 65 and older, and some people under age 65 with certain disabilities or conditions. The insurance offered by Medicare comes in four parts. It includes Parts A, B, C, and D. Original Medicare is comprised of Part A and Part B. It covers most, but not all the costs for approved health care services and supplies.
Original Medicare
Part A
Part A helps cover inpatient care in hospitals, skilled nursing facility care, hospice care, and some home health care.
Your Part A coverage starts the month you turn 65 and is paid for through payroll tax deductions. To qualify for premium-free Part A, you or your spouse must work in the United States and pay Medicare taxes (FICA) for at least 10 years. If you're qualified when you turn age 65, you're automatically enrolled in Part A. If you haven't worked long enough to qualify for premium-free Part A, you may be able to purchase this coverage through the Social Security Administration. People under 65 may qualify for premium-free Part A if they've been receiving disability benefits for 24 months or more, or if they have End-Stage Renal Disease or amyotrophic lateral sclerosis (ALS, also called Lou Gehrig‘s disease).
Part B
Part B helps cover services from doctors and other health care providers, outpatient care, home health care, durable medical equipment (e.g., wheelchairs, walkers, hospital beds, etc.), and many preventive services (e.g., screenings, shots or vaccines, and yearly “Wellness” visits).
If you have premium-free Part A and are collecting Social Security when you turn 65, you're typically enrolled automatically in Part B. If you have deferred Social Security and aren't enrolled in active group coverage, sign up for Part B online or go to your local Social Security office. There is a premium associated with Part B.
Medicare Advantage (Part C)
Medicare Advantage plans replace Parts A and B, to cover both inpatient and outpatient care. Most Medicare Advantage plans include drug coverage (Part D). Plans are offered by Medicare-approved private companies that must follow rules set by Medicare. These plans can’t be used with a Medigap policy. You still have to pay your Part B premium when you’re enrolled in a Medicare Advantage plan.
Medicare Prescription Drug Plan (Part D)
A Prescription Drug Plan (Part D) helps cover the cost of prescription drugs (including many recommended shots or vaccines). You can enroll into a Part D plan in addition to Original Medicare, or you can enroll into a Medicare Advantage plan with drug coverage. Plans that offer Medicare drug coverage are run by private insurance companies that follow rules set by Medicare.
Medicare Supplement Insurance (Medigap)
A Medigap policy is extra insurance you can buy from a private company that helps pay your share of costs in Original Medicare. These policies can’t be used with a Medicare Advantage plan. Medigap policies don’t cover prescription drugs, so you may want to purchase a Medicare Prescription Drug Plan (Part D) separately. Medigap policies are standardized, no matter which company sells them, and are regulated by each state, not Medicare.