What is Medicare and its Parts?

Medicare is at it’s most basic an entitlement program similar to social security to assist in providing healthcare to millions of people.  Most of these people meet certain age requirements such as being over the age of 65, but in some circumstances Medicare does provide healthcare for younger individuals with certain conditions or disabilities.

There are four parts to medicare (Part A, B, C, and D) which we will get into in more detail below.  Each of theses different parts provides coverage for different things, and gives patients options for how much they would like to have covered.  Original Medicare is typically considered Parts A, and B, with C and D being optional add-on’s to assist with more costs.

In addition to these Medicare plans, many Americans opt to purchase Medicare supplemental insurance.  We’ll touch briefly on all of these options below.

Who is Medicare For and When to Sign Up?

The bulk of people on Medicare qualified when the turned age 65, but some people under that age receive Medicare for other reasons which can include the following:

• End-stage renal disease (ESRD)
• Amyotrophic Lateral Sclerosis
• People who are under 65 and receive disability benefits from the Social Security Administration

You can find more details about what disabilities Medicare covers at this Medicare.gov

What is Original Medicare (Part A & B)?

Medicare Part A and B make up what is also called Original Medicare.  Part A covers hospital care, skilled nursing facilities, nursing home care, hospice, and some home health services.

Medicare Part B covers medically necessary services and preventative services.

These services include things like durable medical equipment, ambulance services, preventative services, and mental health.  Some of the preventative services might include physicals, flu shots, and various screenings for cancer, heart disease, and diabetes.

What is Medicare Part C (Medicare Advantage Plans)?

Medicare Advantage plans are a different way to get Medicare Part A and B, and are run through private companies that have been approved by Medicare.  They provide at least the same level of services that Original Medicare covers with the exception of hospice care.  Hospice benefits continue to be covered by Original Medicare.

While Medicare Advantage plans give at least the minimum level of coverage, they also may cover things like vision, wellness programs, eyeglasses, or dental care.  Some will also cover prescription drugs.

Keep in mind there are different Medicare Advantage plans out there based on what company you choose, so be sure to shop around and fully understand the plan you are enrolling in.

What is Medicare Part D and Drug Coverage?

Anyone who is enrolled in Medicare Part A & B is eligible for Medicare Part D.  If you do not sign up for Medicare Part D when you are first eligible (and it is optional) and decide you enroll at a later date, you may have to pay a late enrollment penalty.

There are two options for getting drug coverage, either with whats called a Medicare Prescription Drug Plan (Part D), or through a Medicare Advantage Plan.  If you are enrolled in Medicare Part A/B, then you would purchase a standalone Part D plan that adds drug coverage onto your Original Medicare.  If however you have a Medicare Advantage plan, you can purchase drug coverage through this plan separately.

Please note that if you are enrolled in a Medicare Advantage plan that includes prescription drug coverage, and you then enroll in a Medicare Prescription Drup Plan (Part D), then the Medicare Advantage plan will dis-enroll you, and you will be moved back to Original Medicare

When Can You Enroll in Medicare?

For most people you have a specific time-frame to sign up for Medicare Part A and B called the Initial Enrollment Period.  This is a seven month period that starts three months before the month you turn 65, and end three months after the month you turn 65.

If you do not sign up within your Initial Enrollment Period and are not eligible for a Special Enrollment Period, then there is a General Enrollment Period each year from January 1st – March 31st.  Keep in mind that if this is the case, you may have to pay a higher premium for both Medicare Part A and B.

Lastly, there are Special Enrollment Periods (SEP) if you meet certain criteria for not having signed up during the Initial Enrollment Period.  Typically you have a SEP if you are receiving health coverage through a group health plan at a current employer.  You have an eight month SEP to enroll in Part A/B starting the month after your employment ends or the group health plan through your employer ends.

What is Medicare Supplemental Insurance?

While Medicare covers a lot, it does not cover everything.  Medicare Supplemental Insurance (also known as Medigap) exists to help cover the gap, by helping pay for things like deductibles, Co-payments, and Coinsurance.  They may also help pay for things that Original Medicare does not cover at all like medical treatment when you are out of the country.

Medigap plans are run by private companies, and require that you pay a premium above and beyond what you may pay for Original Medicare (and you must have Medicare Part A and B to sign up for a Medigap plan).

As with all plans sold by a private companies, it’s important to do your homework and understand your options before purchasing a plan.