Medicare: 10 Things To Know – Technologist

With more than 67 million beneficiaries, around one in five Americans is enrolled in Medicare. The federal health insurance program has helped ensure adults over 65 and individuals with disabilities have access to health insurance since 1965.

But with regular changes to the program — and our health system at large — it’s no wonder that Medicare still feels complicated! There are lots of pieces to keep up with. This article covers all the basics and answers Medicare FAQs, including:

• What Is Medicare?
• How Does Medicare Work?
• What Are the Four Parts of Medicare?
• Who Is Eligible for Medicare?
• How Do I Enroll in Medicare?
• How Much Does Medicare Cost?
• What Does Medicare Cover?
• What’s Not Covered by Medicare?
• What Is Medicare vs. Medicare Advantage?
• What’s a Medicare Supplement (Medigap) Plan?
• BONUS: Can Someone Help Me Navigate Medicare?

1. What Is Medicare?

Medicare is a federal health insurance program. It can be purchased by people who are 65 and older or people under 65 who have qualifying disabilities.

Medicare only offers individual insurance. If you’ve ever had health insurance through an employer or spouse, then this is a big change. There are no family plans or coverage for couples with Medicare.

2. How Does Medicare Work?

If you have Medicare, then — between Part A and Part B — you have some coverage for most of the costs of your health care needs. Part A covers hospital services and supplies, and Part B covers medical services and supplies.

Like any other type of insurance, Medicare has a deductible. So, when you need care, you can expect to come out-of-pocket for some of your care. But with Medicare, there is no limit to how much you’ll pay out-of-pocket from year to year. The only exception is for people with other coverage, such as a Medicare Supplement Plan. But this depends on each person’s extra coverage.

3. What Are the Four Parts of Medicare?

When you sign up for Medicare, your health needs are split into three categories:

• Hospital expenses
• Medical expenses
• Drug expenses

Each part of Medicare is meant to address a different category of expenses, as follows:

As you can see, I haven’t included Part C above. That’s because Medicare Part C is also known as Medicare Advantage. There are two different ways to get coverage for your health expenses through Medicare. You can either get what’s known as “Original Medicare” — which includes Part A and Part B — or you can get Medicare Advantage.

Medicare Advantage plans are bundled and include Part A and Part B coverage. Typically, they also include Part D coverage. Click here to jump ahead and read more about the differences between Original Medicare and Medicare Advantage below. Otherwise, keep scrolling to read more closely at each individual part of Medicare first.

Medicare Part A

Medicare Part A is your hospital insurance. Here are some examples of what it helps cover:

There are two types of Part A coverage: Premium-free Part A and Premium Part A. Most people qualify for Premium-Free Part A and, as the name suggests, don’t have to pay a monthly premium for this coverage. However, not everyone meets the qualifications for Premium-Free Medicare Part A. If you don’t, you’ll pay a monthly premium for Part A, which is known as Premium Part A.

Medicare Part B

Medicare Part B is medical insurance. Part B helps cover things like:

Medicare Part C

Medicare Advantage plans, or MA plans, are also known as Medicare Part C. If you choose a Medicare Advantage plan, then you will buy coverage through a private company. But the coverage is approved by Medicare.

MA plans include Part A and Part B coverage. In other words, a Medicare Advantage plan includes hospital insurance and medical insurance. Many MA plans also include Part D coverage. And these bundled plans sometimes include extra coverage for things like dental, vision, and more.

Medicare Part D

It’s easy to remember what Medicare Part D covers because — as you’ve likely heard — you can just think “D” for drugs. Medicare Part D helps to cover the cost of your prescriptions.

Every Medicare drug plan has its own list of covered drugs, which is also known as a formulary. This is important: If you take certain drugs, check a plan’s formulary before you choose it! You want a plan that covers your prescriptions.

4. Who Is Eligible for Medicare?

You are eligible for Medicare coverage if you are 65 or older, disabled, or have end-stage renal disease (ESRD).

To qualify for Medicare based on a disability, you have to receive monthly disability benefits from Social Security or Railroad Retirement Board for at least 24 months first. Then, you’re automatically eligible for Medicare. There is no waiting period for people with ALS though.

Child disability benefits don’t begin until a child is at least 18 (if the child has ALS) but generally won’t begin before 20 years old (for all other disabilities).

5. How Do I Enroll in Medicare?

When it comes to enrolling in Medicare, preparation is key! You become eligible at 65, but don’t wait until your 65th birthday to start planning. Because there are so many options to consider, you run the risk of penalties and extra fees if you miss your enrollment window.

So, here’s the first thing to know about enrollment: You can only sign up during specific time periods. These time periods can be broken into three different enrollment windows:

• Initial Enrollment Period
• General Enrollment Period
• Special Enrollment Period

Let’s look at each window more closely.

Initial Enrollment Period

If you plan to enroll in Medicare, aim to do so during your initial enrollment period (IEP). The time period is different from person to person because it’s based on your birthday and is the period of time from three months before your 65th birthday to three months after.

In total, that gives you a seven-month window. Let’s say your birthday is in July. You have three months before your birthday (April, May, June), the month of your birthday (July) and the three months after (August, September, October) to enroll without penalty.

If you miss enrolling during that timeframe — and unless you qualify for a special enrollment period — you’ll have to wait to sign up during the general enrollment window. The problem is: You will have to pay a late enrollment penalty on your Part B coverage. This penalty is a monthly fee you pay for as long as you’re enrolled. You might also have to pay a penalty fee on your Part A coverage if you have Premium-Part A.

General Enrollment Period

The General Enrollment Period for Medicare runs from January 1 through March 31 annually. But general enrollment is technically late enrollment because this is when you sign up if you miss your initial enrollment period.

People who sign up during this time — and who don’t qualify for a Special Enrollment Period — can expect to pay a monthly late enrollment penalty.

Special Enrollment Period

Sometimes life happens. Unexpected events can lead you to unintentionally miss your Initial Enrollment Period. But that doesn’t mean you automatically are doomed to pay penalties on your Medicare for the rest of time.

Special Enrollment Periods generally give you room to breathe when your life’s circumstances prevent you from signing up on time. There are many special circumstances that let you qualify for special enrollment periods beyond your initial seven-month window. For example, you can qualify for a Special Enrollment Period if you missed your window because you:

• Experienced “exceptional” conditions
• Had health insurance through your job or your spouse’s job
• Have TRICARE
• Lost Medicaid coverage
• Received inaccurate or misleading information from your health plan or employer
• Were impacted by a natural disaster or declared emergency
• Were released from incarceration

A common question people ask is: Do I have to sign up for Medicare at 65? As you can see above, you don’t! If, for example, you or a spouse are still working and receiving health benefits from an employer beyond the age of 65, you can sign up after 65 without penalty.

Where To Enroll in Medicare

You can sign up for Medicare Part A and B online through the Social Security Administration website here. Simply scroll down and click the “Sign up for Medicare” button.

Depending on your circumstances, however, you might need to take a different path or complete a few extra steps to enroll. For example, if you missed your Initial Enrollment Period, you need to mail or fax form CMS-10797 to your local Social Security office.

If you already have Part A and need to add Part B, you can click here to get to Medicare.gov and find the correct form for your situation. And to find Part D coverage, use the Medicare Plan Finder on the Medicare.gov website here.

6. How Much Does Medicare Cost?

Medicare — like private health insurance — comes with several types of costs, including:

• Premiums: the amount you pay monthly for your health insurance coverage
• Deductibles: the amount you pay out-of-pocket for your health care before your health insurance starts to pay for it
• Copayments: the amount you pay out-of-pocket towards each health care service
• Coinsurance: the amount you pay (a percentage) towards a covered health care service after you pay your deductible

And if you miss your initial enrollment period, you can add penalties to the list of costs associated with Medicare coverage.

The cost for Medicare Advantage Plans — or Medicare Part C — varies depending on which plan you join. But let’s take a look at typical costs for Medicare Parts A, B and D.

Medicare Part A Costs

There are also copayments for inpatient stays, which vary depending on the length of your stay. For example, for the first 60 days, a copayment would be $0. Between days 61 and 90, the copayment is $408 per day. And it rises to $816 per day between days 91 and 150. But after 150 days, you’re responsible for all costs.

Medicare Part B Costs

Medicare Part D Costs

Starting in 2025, your out-of-pocket costs for prescriptions will be capped at $2,000 per year.

7. What Does Medicare Cover?

Medicare is comprehensive and designed to (at least partially) cover the health care needs of most adults. According to Medicare.gov, Medicare coverage is based on:

• Federal and state laws.
• National coverage decisions Medicare makes.
• Local coverage decisions made by Medicare claims processing companies in each state. These companies decide if something is medically necessary and Medicare should cover it in their area.

The best way to find out whether a service, test, or supply you need is covered is to check the Medicare website. Click here to access Medicare’s coverage search tool.

In general, however, here are some of the types of expenses Medicare Parts A and B will help pay for:

• Ambulance services (Part B)
• Behavioral and mental health care (Part A & B)
• Clinical research (Part B)
• Durable medical equipment (Part B)
• Home health services (Part A)
• Hospice care (Part A)
• Inpatient hospital care (Part A)
• Nursing home care (Part A)
• Skilled Nursing Facility care (Part A)

Read more about what Medicare Part A covers here and what Medicare Part B covers here.

8. What’s Not Covered by Medicare?

While Medicare covers many health care needs, there are some things that you might be surprised to know aren’t covered. Two areas of care that aren’t covered by Original Medicare that many people still want insurance for include vision and dental.

If you get a Medicare Advantage Plan, your plan might include vision and dental. Otherwise, you can buy standalone vision insurance for around $5 to $30 per month if you’re interested. And an individual dental plan costs around $26 to $64 monthly. Or you can sign up for a dental savings plan, which isn’t insurance but gets you discounts on services wherever accepted.

Here are a few other services that Original Medicare doesn’t cover:

• Care outside of the U.S.
• Chiropractic care
• Concierge care
• Cosmetic surgeries
• Hearing aids
• Long-term care
• Massage therapy
• Podiatric care

A Medicare Advantage Plan may offer coverage for some of these things, depending on which plan you choose. But continue to the next section to learn more about Medicare Advantage. While there are seemingly several benefits, these plans might not be right for you.

9. What Is Medicare vs. Medicare Advantage?

There are two different ways to get Medicare coverage. You can either get Original Medicare (Parts A & B) or you can choose a Medicare Advantage Plan (Part C). No matter what you choose, expect the basic level of hospital and medical insurance to be the same for Medicare and Medicare Advantage plans.

But Medicare Advantage Plans bundle everything together and typically come with more coverage. Let’s look at the key differences between Medicare and Medicare Advantage:

At a glance, it might seem like a Medicare Advantage Plan comes with more coverage and more benefits. But more doesn’t always mean better.

Clark Howard’s Thoughts on Medicare Advantage Plans

Money expert Clark Howard isn’t a fan of Medicare Advantage Plans. He says:

“I call ’em ‘disadvantage plans’ because — if you think how many billions of dollars the sellers of Medicare Advantage plans put into marketing them as people approach their 65th birthday — they’re doing it because they want to contract you for life.”

It is possible to switch from a Medicare Advantage Plan to an Original Medicare Plan. Changes can be made during enrollment periods. But that’s not Clark’s point.

“When you go from an Advantage Plan back to Original Medicare, the problem is Medicare Part B doesn’t cover all your expenses,” he says. “People who leave an Advantage Plan need a Medigap policy too … But in most states, you have to medically underwrite at that point.”

“You lose your ability to not go through medical underwriting,” Clark continues. “So, if you have developed any condition — and as you get older, you’re more likely to have a preexisting [condition] — you cannot then get the Medigap policy.”

“If you have a preexisting [condition], other Advantage Plans likely aren’t going to want you if you just wanted to switch from one to another. So, that’s the problem is that only a handful of states give you the ability to migrate at enrollment periods and not have to go through medical underwriting. That’s why I say it’s like Hotel California. You can check out but you can’t ever leave.”

Clark also doesn’t like that Medicare Advantage Plans can reduce their benefits or limit which doctors you see if you need specialized care.

“In my experience, people love an advantage plan until they don’t. And then they’re there like that song from forever ago you can check out, but you can never leave.” Clark warns.

10. What’s a Medicare Supplement (Medigap) Plan?

A Medicare Supplement Plan is an insurance policy that supplements — or enhances — your Original Medicare coverage. Also known as Medigap, these policies can help reduce your out-of-pocket expenses with Medicare.

Let’s say you have a doctor’s visit. Your Medicare pays a pre-approved amount for that visit. Then, someone has to pay whatever is left over, or the amount that Medicare doesn’t pay. Without Medigap, you’re responsible for the remaining balance. But if you have Medigap, then it pays some or all of what’s remaining (depending on the service and your policy coverage). Either way, with Medigap, your out-of-pocket costs typically go down.

Here are four things you should know about Medicare Supplement (Medigap) Plans:

1. Medicare Supplement Plans are only available with Original Medicare.

If you choose a Medicare Advantage Plan, you cannot buy a Medicare Supplement Plan. You can only get Medigap with Original Medicare.

2. Medicare Supplement Plans are standardized.

You can buy a Medicare Supplement Plan from any insurance company that’s licensed to sell in your state. And no matter who you choose as your insurer, the basic plans are all the same because Medigap plans are standardized.

In other words: Plan A from Insurance Company One has the same basic coverage as Plan A from Insurance Company Two.

There are 10 different types of Medigap plans (A- D, F, G, and K- N). And the same is true for all of them! Insurance companies will often throw in their own incentives (ex: fitness programs) in hopes that you’ll buy a plan from them. And their customer service is another factor to consider when you choose your insurer. But regardless of who you go with, the actual plan coverage is always the same.

3. The best time to apply is during your Guaranteed Issue Period.

Technically, you can apply for a Medigap plan any time after you enroll in Medicare Parts A & B. But you have what’s known as a guaranteed issue period during your open enrollment. This window varies depending on what state you live in, but for many people, it starts the day after you turn 65 and lasts for six months.

During this window — no matter whether you have medical conditions — you’re guaranteed acceptance. And you won’t have to pay more for coverage. Once the guaranteed issue period has passed, you might have to go through medical underwriting. And that means you risk being denied.

4. Medigap coverage is for life!

As long as you pay your premiums and don’t falsify your application, you’re guaranteed coverage by your Medigap plan for life! Even if your health changes as you age, your coverage will remain.

Can Someone Help Me Navigate Medicare?

Healthcare is never one-size-fits-all. Once you get past the basics of Medicare, all the options can quickly complicate things. But Clark wants you to know that free Medicare help is available! He says:

“…over the years I’ve talked about shiphelp.org, which is a volunteer organization of trained experts that will guide you with unbiased information on how you compare one plan to another — one company’s offerings to another — to know what would be the best choice.”

SHIP stands for State Health Insurance Assistance Program. The goal of SHIP is to, “provide local, in-depth, and objective insurance counseling and assistance to Medicare-eligible individuals, their families, and caregivers.” Again, this help is free! And nobody is selling (or trying to sell) you anything.

To speak with someone, you can get your local SHIP’s contact information here or call 1-877-839-2675 to be connected.

Final Thoughts

There’s a lot to know when it comes to Medicare. And things can get confusing with all the different types of plans. But the key to navigating Medicare is to start early and take things slowly.

Just be sure to enroll during your initial enrollment period — unless you know you qualify for an exception — to avoid penalty fees that can cost you for as long as you’re covered!

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