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Understanding medicare

Medicare is government-run health insurance for people age 65 or older. Some other people also may receive Medicare:

  • Younger people with certain disabilities
  • People who have permanent kidney damage (end-stage renal disease) and need dialysis or a kidney transplant

To receive Medicare, you must be a United States citizen or a permanent legal resident who has lived in the country for at least 5 years.

What Does Medicare Cover?

Medicare has four parts. Parts A and B are also called "Original Medicare."

  • Part A - Hospital care
  • Part B - Outpatient care
  • Part C - Medicare Advantage
  • Part D - Medicare Prescription Drug Plan

Most people either choose Original Medicare (parts A and B) or Medicare Advantage. With Original Medicare, you have the option to also choose Plan D for your prescription medicines.

Part A - Medicare

Medicare part A covers services and supplies needed to treat a disease or medical conditions and that take place during:

  • Hospital care.
  • Skilled nursing facility care, when you are sent to recover from an illness or procedure. (Moving into nursing homes when you are no longer able to live at home is not covered by Medicare.)
  • Hospice care.
  • Home health visits.

Services and supplies provided while in a hospital or a facility that may be included are:

  • Care provided by physicians, nurses, and other health care providers
  • Drugs
  • Nursing care
  • Therapy to help with speech, swallowing, movement, bathing, dressing and so on
  • Lab and imaging tests
  • Surgeries and procedures
  • Wheelchairs, walkers, and other equipment

Most people do not pay a monthly premium for Part A.

Part B - Medicare

Outpatient care. Medicare Part B helps pay for treatments and services provided as an outpatient. Outpatient care may take place in:

  • An emergency room or other area of the hospital, but when you are not admitted
  • A health care provider's offices (including doctor nurse, therapist, and others)
  • A surgery centers
  • A laboratory or imaging center
  • Your home

Services and other health care providers. It also pays for preventive health care services, such as:

  • Wellness visits and other preventive services, such as flu and pneumonia shots and mammograms
  • Surgical procedures
  • Lab tests and x-rays
  • Drugs and medicines that you are unable to give to yourself, such as medicines given through your veins
  • Feeding tubes
  • Visits with a provider
  • Wheelchairs, walkers, and some other supplies
  • And many more

Most people pay a monthly premium for Part B. You also pay a small yearly deductible. Once that amount is met, you pay 20% of the cost for most services. This is called coinsurance. You also pay copayments for doctor visits. This is a small fee, usually about $25 or so, for each doctor or specialist visit.

Exactly what is covered in your area depends on:

  • Federal and state laws
  • What Medicare decides is covered
  • What local companies decide to cover

It's important to always check your coverage before using a service to find out what Medicare will pay for and what you may need to pay for.

Part C - Medicare Advantage

Medicare advantage (MA) plans provide the same benefits as Part A, Part B, and part D. This means you are covered for medical and hospital care as well as prescription drugs. MA plans are offered by private insurance companies provided who work along with Medicare.

  • You pay a monthly premium for this type of plan.
  • Typically you must use the doctors, hospitals, and other providers that work with your plan or you will pay more money.
  • MA plans cover all the services covered by Original Medicare (part A and part B).
  • They also offer additional coverage such as vision, hearing, dental, and prescription drug coverage. In some cases, you may need to pay extra for certain additional benefits such as dental care.

Part D - Medicare Prescription Drug Plan

If you have Original Medicare (parts A and B) and want prescription drug coverage, you must choose a Medicare Prescription Drug Plan (Plan D). This coverage is provided by private insurance companies approved by Medicare.

You cannot choose Plan D if you have a Medicare Advantage plan because drug coverage is provided by those plans.

Medigap

Medigap is a Medicare supplemental insurance policy sold by private companies. It helps to pay costs like copayments, coinsurance, and deductibles. To get a Medigap policy you must have Original Medicare (part A and part B). You pay the private insurance company a monthly premium for your Medigap policy in addition to the monthly Part B premium that you pay to Medicare.

When to Sign Up for Medicare

You should join Medicare Part A between 3 months before your birthday month (turning 65) and 3 months after your birthday month. You are given a 7 month window to join.

If you don't sign up for Part A within that window, you will pay a penalty fee to join the plan, and you may pay higher monthly premiums. Even if you are still working and will be covered by your work insurance, you need to sign up for Medicare Part A. So don't wait to join Medicare.

You can sign up for Medicare Part B when you first signed up for part A, or you can wait until you need that type of coverage.

When Choosing a Medigap, Medicare Advantage, or Medicare Part D Plan

You can choose between original Medicare (Part A and Part B) or Medicare Advantage Plan (Part C). Most of the time, you can switch back and forth between these types of coverage at least once a year.

Decide if you want prescription drug coverage or Part D. If you want prescription drug coverage you need to compare the plans run by insurance companies. DO NOT just compare the premiums while comparing the plans. Make sure your medicines are covered by the plan you are looking at.

Consider the below items when you choose your plan:

  • Coverage - Your plan should cover the services and medicines you need.
  • Costs - Compare the costs you need to pay in different plans. Compare the cost of your premiums, deductibles, and other costs between your options.
  • Prescription drugs - Check to make sure all your medicines are covered under the plan's formulary.
  • Doctor and hospital choice - Check to see if you can use the doctor and hospital of your choice.
  • Quality of care - Check the reviews and ratings of the plans and services provided by the plans in your area.
  • Travel - Find out if the plan covers you if you travel to another state or outside the U.S.

Resources

To learn more about Medicare, learn about the Medicare Advantage plans available in your area, and compare doctors, hospitals, and other providers in your area, go to Medicare.gov -- www.medicare.gov.

References

MedicaidBynum JPW. Financing and organization of health care. In: Ham RJ, Sloane PD, Warshaw GA, Potter JF, Flaherty E, eds. Ham's Primary Care Geriatrics. 6th ed. Philadelphia, PA: Elsevier Saunders; 2014:chap 8.

Centers for Medicare and Medicaid Services. Drug coverage (part D). Centers for Medicare and Medicare Services web site. www.medicare.gov/part-d/index.html. Accessed October 12, 2016.

Centers for Medicare and Medicaid Services. What Medicare covers. Centers for Medicare and Medicare Services web site. www.medicare.gov/what-medicare-covers/index.html. Accessed October 12, 2016.

Centers for Medicare and Medicaid Services. Supplements and other insurance. Centers for Medicare and Medicare Services web site. www.medicare.gov/supplement-other-insurance/index.html. Accessed October 12, 2016.

Stefanacci RG, Cantelmo JL. Managed care for older americans. In: Fillit HM, Rockwood K, Young J, eds. Brocklehurst's Textbook of Geriatric Medicine and Gerontology. 8th ed. Philadelphia, PA: Elsevier; 2017:chap 129.

Review Date 12/10/2016

Updated by: Linda J. Vorvick, MD, Clinical Associate Professor, Department of Family Medicine, UW Medicine, School of Medicine, University of Washington, Seattle, WA. Also reviewed by David Zieve, MD, MHA, Medical Director, Brenda Conaway, Editorial Director, and the A.D.A.M. Editorial team.

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