Medicare

What Is Medicare?

Medicare is a federal health insurance program governed by the Centers for Medicare & Medicaid Services (CMS).

It is designed to provide health coverage to individuals 65 or older and those under 65 with specific disabilities.

Social Security, Medicare income taxes, Medicare premiums, and the government budget finance the Medicare program.

The program lessens the overall cost of health care, although it does not cover all expenses or the majority of long-term care costs.

Medicare has four components: Part A - Hospital Insurance, Part B - Medical Insurance, Part C - Medicare Advantage Plans, and Part D - Prescription Drug Coverage.

History of the Medicare Program

Medicare was introduced in 1965 as part of President Lyndon B. Johnson's program.

It was designed to provide health care coverage for Americans over 65 who were no longer covered by employer-sponsored health insurance plans.

Initially, it only provided coverage for hospital and medical insurance.

Still, over the years, additional coverage and benefits have been added, including prescription drug coverage, Medicare Advantage, and supplemental insurance plans.

The 1972 amendment expanded coverage to include people with disabilities, those with an end-stage renal disease requiring dialysis or a kidney transplant, and those 65 and older who choose Medicare coverage.

The most significant change was the Medicare Prescription Drug Improvement and Modernization Act (MMA) of 2003.

Under this legislation, private health plans approved by Medicare became known as Medicare Advantage Plans.

The program has been expanded to make more individuals eligible for coverage and cover a broader range of medical issues.

It continues to meet such requirements as the population, technology, and society constantly change.

Medicare Coverage

There are four types of coverage offered by Medicare:

Part A: Hospital Insurance

Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and home health care. However, Part A does not cover the cost of treatment procedures.

Most people do not pay premiums for Part A coverage due to their work history. You can purchase it if you are not eligible for Part A with no premium.

Part B: Medical Insurance

Additional procedures not covered by Part A may be covered under Part B. This part covers services from doctors, outpatient care, medical supplies, and preventive services.

Included in the cost of Part B is a monthly premium, with the amount varying based on income.

Part C: Medicare Advantage Plans

This is considered the all-in-one alternative to Original Medicare and covers both Parts A and B, as well as additional benefits such as vision, hearing, dental, and wellness programs offered by private companies. Some companies have prescription drug coverage.

Medicare Part C, often known as Medicare Advantage, is private insurance. Part C enrollment is optional. These plans are marketed by insurance companies with which the federal government has authorized.

Health maintenance, preferred provider organizations, special needs programs, private fee-for-service plans, and Medicare medical savings account plans are included in these programs.

Part D: Prescription Drug Coverage

Medicare beneficiaries have to pay a monthly premium for Part D, which covers the cost of prescription drugs and is available from private insurers.

Participants in Medicare Part D pay a monthly fee, and coverage varies depending on the provider and plan.

Who Is Eligible for Medicare?

Medicare is reserved exclusively for those who are 65 or older.

If you are disabled, have an end-stage renal disease (ESDR), a permanent kidney failure necessitating dialysis or a transplant, or have ALS (amyotrophic lateral sclerosis), commonly known as Lou Gehrig's disease, you might be eligible for Medicare sooner.

Original Medicare, covering Parts A and B, is typically available to people who are U.S. citizens or have been residents for at least five years in a row, and you meet one of the prerequisites listed above.

The eligibility requirements for Medicare and the timing of Parts A and B enrollment are very complicated. Knowing when to enroll in the different parts of Medicare is crucial.

Your age, whether you are retired or still employed, and whether you receive Social Security payments all influence how much you pay.

Medicare Eligibility for People Over 65

Qualifying for Part A and Part B programs is not automatic. Here is how to figure out if you qualify.

Part A

You are eligible to get Part A full benefits without paying premiums if:

• You or your spouse worked and paid Medicare taxes for at least 10 years
• You or your spouse worked for the government or are a retiree who has paid Medicare payroll taxes while employed but has not contributed to Social Security.
• You are qualified to receive or are receiving Social Security or Railroad Retirement Board retirement benefits

Part B

You are eligible for Part B if:

• You are collecting Social Security or Railroad Retirement Board payments at least four months before your 65th birthday
• Contingent upon qualifying for Part A coverage. However, Part B coverage has to be purchased.

Medicare Eligibility for People Under 65

You qualify for Medicare if the following conditions apply:

• You satisfy the requirements for a Railroad Retirement Board disability pension and receive one
• You received Social Security disability payments for 24 months
• You have Lou Gehrig's disease, generally known as ALS
• You have a diagnosis of ESRD

A monthly premium for Part B's optional program is paid for each month of coverage. This is only free if you have a low income and are enrolled in one of the Medicare Savings Programs.

Medicare Eligibility for Part C and Part D

You can enroll in Medicare Part C or Part D if you are new to Medicare during your initial enrollment period.

Part C

You are eligible for Part C if:

• You have original Medicare coverage
• You live in the service region of a Medicare Advantage insurance carrier that offers the coverage/price combination you desire and accepts new members during your enrollment period

Part D

You are eligible for Part D if:

• You have original Medicare coverage
• You have been receiving Social Security Disability Insurance (SSDI) benefits for over 24 months.
• You are diagnosed with end-stage renal disease

It is vital to understand that a Part D plan can only be obtained as an add-on to original Medicare. You cannot enroll in a Part D plan if you have Part C.

How to Enroll in Medicare

The moment an individual becomes eligible is the optimal moment to enroll for Medicare, and one can do so by considering the following:

Three Ways To Enroll in Medicare

There are three alternatives for individuals who wish to enroll in Medicare:

Online

Individuals can enroll online on the Social Security Administration (SSA) website. Instructions are provided upon starting the application process, and the Medicare card is automatically sent approximately 30 days after the approval of the application.

Phone

Contact the SSA by dialing 1-800-772-1213 to register for Medicare benefits. They are available in most U.S. time zones from Monday to Friday from 8 a.m. to 7 p.m. Applicants must inform the representative that their purpose is Medicare enrollment.

In Person

Those who prefer face-to-face interaction can visit their local Social Security office. For this method, individuals are required to set an appointment in advance. It is also necessary to bring a valid ID and proof of age, such as a passport or birth certificate.

Medicare Enrollment Periods

Depending on their situation, people can sign up for Medicare during one of the following enrollment periods:

Initial Medicare Enrollment Period

This is the seven-month period that starts when an individual turns 65 and is the first time they are eligible to enroll in Medicare Part A and Part B.

This period begins three months before a person’s 65th birthday includes their birthday month, and ends three months after their birthday.

General Enrollment Period

Suppose an individual did not enroll in Medicare when they were first eligible. In that case, they can during the General Enrollment Period.

This period runs from January 1st to March 31st each year. Coverage starts on July 1st of that year.

Special Enrollment Period

Those who failed to sign up during the initial or general enrollment period can qualify for a particular enrollment period if certain circumstances apply.

An example would be going beyond their current coverage area or losing their employer-sponsored health insurance.

What Medicare Does Not Cover

Medicare does not provide comprehensive coverage. Suppose you require services that Part A or Part B does not cover, such as the ones below. You must pay for them unless you have additional insurance to cover the expenses.

• Long-Term Care. This includes care received in nursing homes, assisted living facilities, or in one’s own home.

• Dental Care. This includes routine dental care, such as checkups, cleanings, fillings, and extractions.

• Eye Exams. This includes regular eye exams, prescription glasses, and contact lenses.

• Cosmetic Surgery. This includes facelifts, liposuction, or hair transplants. The only exception is if the procedure is medically necessary for accidental injury.

• Hearing Aids. Only ear-related medical expenses are covered under Medicare. This includes surgery and the insertion of ear tubes, but not hearing aids and tests to fit them.

• Foot Care. This includes routine foot care, such as callus removal and toenail clipping. However, medical treatments for certain diseases of the feet, such as diabetes, are covered.

• Chiropractic Treatment. This includes most chiropractic procedures, treatments, or tests a chiropractor requests, such as x-rays.

• Overseas Care. This refers to treatment received outside the United States and its territories that Medicare does not cover. Those who usually travel should consider purchasing additional travel insurance for medical expenses abroad.

How to Choose a Medicare Plan

Consider the following factors when selecting or updating your Medicare plan to ensure that it provides the required services.

• Consider Your Budget. Decide how much you can afford for premiums and other expenses such as co-pays, deductibles, and coinsurance.

• Research Medicare Plans. Compare Medicare costs, coverage, ratings, and benefits of plans available near you. This can help identify the plan best suited for your needs and budget.

• Think About Your Health. Select a plan that meets your health requirements. Determine which treatments, services, and coverage are essential to you.

• Understand Extra Benefits. Find out which plans include additional benefits like vision, hearing, dental, or wellness programs. These can be beneficial if you require related services.

• Pay Attention to Provider Networks. Check that your preferred doctors and hospitals accept the plan you are considering and if they are in-network or out-of-network.

• Know About Medication Coverage. Verify whether the plan covers your current medications and if they require prior authorization or any special rules for filling prescriptions.

Medicare vs Medicaid

Medicare and Medicaid are two government healthcare programs offering Americans health coverage.

Medicare is the federal health insurance program for those over 65 and younger adults with disabilities. Medicare covers hospital stays, doctor visits, preventive care, and prescription drugs.

Medicaid provides health care services to low-income individuals and families. Medicaid typically covers in-home care, long-term nursing home stays, and other services not covered by Medicare.

Some states may offer increased pharmaceutical, physical therapy, dental, and medical transportation coverage.

Medicaid does not have premiums, deductibles, or co-pays. On the other hand, Medicare has payment requirements.

Final Thoughts

Medicare is a federal health insurance program developed to provide health coverage to individuals 65 or older and some people under 65 with particular disabilities.

The program enables older Americans to have their health concerns addressed when they retire.

Social Security, Medicare income taxes, Medicare premiums, and the government budget finance the Medicare program.

It was first introduced in 1965 as part of President Lyndon to provide healthcare coverage for Americans.

65-year-olds can obtain Part A hospital and facility coverage without paying premiums if they or their spouse worked and paid Medicare taxes for at least ten years.

Those under 65 who have received SSDI or have ESRD or ALS are eligible.

During the assigned enrollment periods, eligible individuals can enroll online, by phone, or at a Social Security office.

Medicare beneficiaries can choose between Original Medicare, which consists of Part A (hospitalization insurance) and Part B (medical insurance).

They can also choose a private Part C (Medicare Advantage plan) or a Part D which covers prescription drug costs.

Medical expenses such as long-term care, dental care, vision care, hearing aids, and other services are not covered under Medicare.

Medicare and Medicaid are two government healthcare programs offering Americans health coverage.

They differ in eligibility, services offered, and payment requirements.

When selecting the right Medicare plan, a financial advisor can help you weigh your options to address your specific needs.