Whether you're new to Medicare or you're looking for a refresher on the basics, you've come to the right place.
For the next 7-10 minutes, we'll cover what Medicare is, the costs associated with coverage, and how you can sign up.
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Medicare is a federal health insurance program created for individuals age 65 and older, as well as individuals with certain medical conditions or disabilities.
Medicare is made up of parts. Each part provides a different type of health care coverage. Let's take a closer look at each of these parts, starting with Original Medicare: Part A and Part B.
The federal government provides Part A and Part B to help cover general health care services received from a qualified health care provider (such as a doctor or a specialist).
Note: You must be enrolled in Original Medicare before you can sign up for add-on coverage or Medicare Advantage.
Part A is hospital insurance. It helps cover:
Check out Medicare.gov for a deeper dive into Part A coverage
Part B is medical insurance. It helps cover:
Check out Medicare.gov for a deeper dive into Part B coverage
What does it cost me?
Original Medicare is a lot of things, but free isn't one of them. Part A and Part B each have a monthly premium, plus deductibles and coinsurance. Most people don't have to pay the Part A premium, thanks to the Medicare taxes they paid during their employment--but everyone pays the Part B premium. This amount changes yearly, varies based on income, and if you enroll late in Part B, you could face a penalty.
Medicare.gov has more on premium-free Part A eligibility and what your Part B premium could be. You can also learn more about the Part B late enrollment penalty
What's not covered?
While Original Medicare provides coverage for hospital and medical services, it doesn't cover everything.
In general, Original Medicare pays for only 80% of covered health care costs. It's up to you to pay the remaining 20%.
Plus, Original Medicare doesn't cover prescription drugs or other benefits such as vision, dental, or hearing services.
Many choose to buy additional insurance to help cover the 20%. Some choose a Medigap plan and/or a Part D prescription drug plan, while others choose a Medicare Advantage plan.
Let's take a closer look at additional coverage by starting with Medigap and Part D.
Medigap (also known as Medicare Supplement) and Part D prescription drug plans (PDP) work alongside Original Medicare. These plans are made available through private health insurance companies, although they are regulated by the government.
In other words, you keep Original Medicare and add either (or both) of these for more comprehensive health care coverage.
Medigap plans help pay your share of health care costs, such as copays, coinsurance, and deductibles. They also have their own monthly premium.
Check out Medicare.gov for a deeper dive into Medigap plans
Part D prescription drug plans (PDPs) are stand-alone plans that help pay for medications you buy from a pharmacy or through a mail-order pharmacy service.
PDPs have their own monthly premium, plus a yearly deductible, copays, and coinsurance.
For more about how to sign up for Part D, what it covers, what it costs, and how it works with other insurance, visit Medicare.gov
While Part D is technically "optional" add-on coverage, if you sign up late for a PDP, you'll face a permanent late enrollment penalty tacked on to your premium.
If you decide to go the path of Original Medicare plus add-on coverage, sign up for Part D as soon as you become eligible.
“I’m not taking any prescriptions so I don’t need Part D.” Why you should think twice before skipping Part D
What does it cost me?
Health insurance companies set the prices for these types of coverage. Costs can be determined by things such as age, whether you use tobacco, and your location (ZIP Code).
Visit Medicare.gov for more about Medigap costs
Visit Medicare.gov for more about Part D costs
Original Medicare and supplemental plans aren't the only option available to you. There's one more we'll cover and that's Part C, also known as Medicare Advantage.
Health insurance companies provide Medicare Advantage plans that are regulated by the government. These plans are sometimes referred to as an "all-in-one" option. They combine Original Medicare services with benefits such as vision, dental, hearing, or prescription drug coverage.
These plans don't replace Part A and Part B. You still need to enroll in Original Medicare before you enroll in a Medicare Advantage plan.
What does it cost me?
Medicare Advantage costs and coverage can differ from plan to plan. Most plans have a monthly premium (although some are as low as $0), deductibles, copays and out-of-pocket maximums.
With a Medicare Advantage plan, you still have to pay your monthly Part B premium.
Medicare.gov has more details on Medicare Advantage plan types
While Medigap/Part D and Medicare Advantage help pay the health care costs Original Medicare doesn't cover, they differ quite a bit.
We'll explain some of these differences to help you understand which Medicare coverage might be your best match.
Choosing add-on plans means:
These may be good for those who:
Picking a Medicare Advantage plan means:
These may be good for those who:
Let’s move on to another important topic: how (and when) you should sign up for Medicare.
Most people become eligible to sign up for Medicare 3 months before and 3 months after their 65th birthday. As you near 65, you should ask yourself "Do I need Medicare coverage right now?"
Some individuals may still have health insurance through an employer and want to continue that coverage. Others may be coming off their health insurance and need to switch to Medicare.
If you plan to make Medicare your primary source of health insurance, you should enroll in Part A and Part B as soon as you become eligible and start considering the additional options we've covered.
We recommend you contact Social Security to enroll in Part A and Part B and determine how you'll pay for it (usually the premiums are deducted from your Social Security check, although direct bill is another option).
Learn more by visiting the Social Security website
Now that you've explored the basics, we recommend these resources for a deeper dive into Medicare:
Your Guide to the 6 Biggest Medicare Questions
Make your Medicare decisions with confidence.
How signing up on time can save you money in the long run.
The official reference website for all things Medicare.
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