Basics of Medicare
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What is Medicare?
How does it work?
What does it cover?
Is Medicare Insurance?
The answer is complex, but you’ve come to the right place for Medicare information.
Medicare is a national United States health insurance program for people 65 and older. It is also for people with certain disabilities or end-stage kidney failure.
Medicare is a national health insurance program for older people
and people who are disabled here in the U.S.
​
The History of Medicare
In July of 1965, President Lyndon B. Johnson signed a Medicare bill into law so that people 65 and older could get the healthcare coverage they needed from a national program.
Initially, the only coverage options were Part A and Part B.
Throughout the years, the coverage has evolved and changed to cover
more people than it did in its early years.
Now, over 60 million people have coverage from Medicare.
While Part A and Part B will provide coverage for the majority of your expenses, there are federally regulated supplemental policies that you can purchase to help fill in the gaps that aren’t covered in-full by Original Medicare.
Parts of Medicare
Medicare
Part A
Part D
Part B
Part C
Part A
Part A is hospital insurance that assists you with the cost of inpatient care and skilled nursing facility stays. It also helps with things like hospice and home health care. In general, you should think of the inpatient hospital benefit as Medicare coverage for room and board in the hospital.
It covers the cost of your semi-private room. However, Part A does NOT cover all of the treatments that might occur in a hospital or clinical setting, such as outpatient surgeries. Those could fall under Part B.
The cost of Part A for most people at age 65 is $0. This is because during your working years you have paid taxes to pre-fund the premiums for your hospital benefits. You can also get Part A for $0 through a spouse or ex-spouse’s work history. Even if you don’t automatically qualify for premium-free coverage, most people age 65 can still get it – they would just pay a hefty premium for it.
Part B
Part B is your outpatient medical coverage. Part B covers essentially all of your other medical services outside of your inpatient hospital care. Without Part B, you would be uninsured for doctor’s visits (including doctors who treat you in the hospital). You would also not have Medicare coverage for lab work, preventive services, ambulance services and outpatient surgeries.
More importantly, Part B covers cancer therapy and kidney dialysis. These are extremely expensive items that would cost a fortune without Part B an supplemental coverage.
The cost of Part B is set by Social Security and it changes from year to year. Individuals in higher income brackets pay more than those in lower incomes brackets. Your modified adjusted gross income reported to the IRS determines what your Part B premium will be.
Part C
What is Part C and why don’t you have to enroll in it at Social Security like A & B?
Part C refers to the Medicare Advantage program, or private insurance. The cost of Advantage plans varies by carrier, county of residence, and plan selected.
To enroll in a Part C plan, you must first be enrolled in both Parts A and B. Even if you find a Part C plan with a very low premium, you will still pay for Part B. You must also live in the plan service area and apply during a valid election period.
Once you enroll, your Medicare coverage will come from the Advantage plan itself, not from the government.
The reason you don’t enroll in Part C at Social Security is that Part C is voluntary. Many people prefer to get their Medicare coverage from Original Medicare and traditional Medigap plans. These people do not want a Part C Advantage plan, so they will simply not enroll in one.
It is your choice whether you wish to opt for one as opposed to just staying with your original Medicare A & B and enrolling in Medigap in addition to a Part D plan.
Part D
Medicare Part D is the newest part of our national health insurance program for people age 65 & up. For half a century, there was no Medicare coverage for prescription medicines. In 2006, our federal government rolled out Part D and tens of millions of Medicare beneficiaries signed up to get coverage for their outpatient drugs.
It covers retail prescription drugs that you pick up yourself at the pharmacy or order via mail order. You choose a carrier and enroll in their drug plan, and that’s how you sign up for a Part D drug plan. Most states have about 30 drug plans to choose from. However, the best way to determine which one is the right fit for you is to have your agent run a Part D analysis using Medicare’s prescription drug finder tool.
Medicare Vs Medicaid
A common question around here is how is Medicare different than Medicaid? By definition, Medicare is a health insurance program for the elderly. Medicaid, on the other hand, is financial and/or healthcare assistance for low-income individuals. Some people 65 and older can qualify for both. In that scenario, Medicare is primary and Medicaid is secondary.
The government has several Savings Programs which you can apply for through your state’s Medicaid office.
These may help you to pay your Part B premiums as well as provide drug plan assistance.
Check with your state’s Medicaid office to see if you qualify.
What doesn’t Medicare cover?
This is a great question as many people are unaware that it does not
cover every health expense that beneficiaries will encounter.
Medicare DOES NOT cover:
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Long-term care
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Hearing aids
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Routine dental care
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Routine vision care
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Medical care outside of the U.S.
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Dentures
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Plastic and/or cosmetic surgery
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Massage therapy