Medicare

Medicare is a health insurance program available to all U.S. adults age 65 or older and younger people who receive disability benefits.

Medicare consists of four parts — Part A, Part B, Part C and Part D. Each part offers specific coverage and varies in cost:

• Part A - covers hospital care and related services.
• Part B - covers doctor appointments and outpatient medical care.
• Part C - covers the same benefits of Parts A and B but is offered by private insurers.
• Part D - covers prescription drugs.

Here’s what you should know about Medicare coverage and some of the expenses that come with it.

Medicare eligibility

You’re entitled to Medicare if you’re at least 65 and a U.S. citizen, or a permanent legal resident for the past five years. Medicare also covers some people under age 65 who have a disability. People who receive Social Security disability insurance usually become eligible for Medicare after a two-year waiting period. However, those with end-stage renal disease (permanent kidney failure) are enrolled automatically upon signing up and those with amyotrophic lateral sclerosis (ALS, also known as Lou Gehrig’s disease) are eligible the month disability begins.

Original Medicare

Original Medicare refers to Medicare Part A and Medicare Part B, which are managed by the federal government. People can see any doctor that accepts Medicare assignment and the government program pays a significant portion of the cost.

Medicare Part A (hospital insurance)

Medicare Part A covers inpatient care in a hospital or skilled nursing facility, although not custodial or long-term care. Part A also helps pay for hospice care and some home health care. Medicare Part A has a deductible ($1,556 in 2022) and coinsurance, which means patients pay a portion of the bill. There's no coinsurance for the first 60 days of inpatient hospital care, for example, but patients typically pay $389 per day in 2022 for the 61st through 90th day of hospitalization, and more after that.

Most people don't pay premiums for Medicare Part A if they or their spouse paid Medicare taxes for at least 10 years. (Medicare taxes are part of the payroll taxes deducted from most working people’s paychecks. You can see if you qualify by checking your Social Security statement, which is available through the Social Security website.) If you don't qualify for premium-free Part A, it's still available to most, but with a high monthly premium. You pay monthly premiums for Part A of up to $499 per month in 2022.

Medicare Part B (medical insurance)

Medicare Part B covers doctor visits and other medically necessary services and supplies. That includes preventive services or health care to prevent illness, as well as ambulance services, durable medical equipment, mental health coverage and a few types of outpatient prescription drugs.

Medicare Part B requires a monthly premium that starts at $170.10 per month in 2022. Single people with adjusted gross incomes over $91,000 and married couples filing jointly with AGIs over $182,000 pay higher premiums. Medicare Part B has a deductible of $233 in 2022. After that, you typically pay 20% of the Medicare-approved amount for services and supplies.

The Medicare Part B penalty
If you don’t have group health insurance from a large employer and fail to sign up for Medicare Part B at 65, then later decide you need it, you’ll likely pay a penalty of 10% of the standard premium for each 12-month period that you delayed. You will pay this penalty for life.

You can avoid the penalty if you had health insurance through your job or your spouse’s or partner's job when you first became eligible. You must sign up within eight months of when that coverage ends and show proof of group insurance after you turned 65.

What Medicare doesn't cover

Common expenses that Medicare doesn’t cover (and that are excluded in the Medicare law) include:

• Hearing aids and exams for fitting them.
• Eye exams and eyeglasses.
• Dentures.
• Most dental care.
• Most foot care, unless related to diabetes or medically necessary due to injury or disease.
• Medical care overseas.
• Cosmetic surgery.
• Massage therapy.

The biggest potential expense that’s not covered is long-term care, also known as custodial care. The federal health program Medicaid pays custodial costs, but is typically reserved for those with low income and little savings.

Medigap (Medicare Supplement Insurance)

Medigap, or Medicare Supplement Insurance, is an additional health insurance policy you can buy from a private insurer to help pay your share of the costs not covered by Medicare Part A and Part B. This includes deductibles, coinsurance and some health care if you travel outside the U.S. Medigap plans can't cover long-term care, prescription drugs, dental, vision, hearing aids or private nursing care.

There are 10 types of Medigap plans available in most states. You must have Medicare Part A and Part B to purchase a Medigap policy. Medigap isn't compatible with Medicare Advantage — you may purchase one or the other.

How to get prescription drug coverage

Medicare drug coverage helps pay for prescription drugs you need. Even if you don’t take prescription drugs now, you should consider getting Medicare drug coverage. Medicare drug coverage is optional and is offered to everyone with Medicare. If you decide not to get it when you’re first eligible, and you don’t have other creditable prescription drug coverage (like drug coverage from an employer or union) or get Extra Help, you’ll likely pay a late enrollment penalty if you join a plan later. Generally, you’ll pay this penalty for as long as you have Medicare drug coverage. To get Medicare drug coverage, you must join a Medicare-approved plan that offers drug coverage. Each plan can vary in cost and specific drugs covered.

Medicare Advantage (Medicare Part C)

Medicare Advantage, also known as Medicare Part C, is a type of health plan offered by private insurance companies that provides the benefits of Part A and Part B and often Part D (prescription drug coverage) as well. You must continue to pay your Part B premium, and there may be a separate premium you pay to the insurer. However, many Medicare Advantage plans are offered at $0 premiums to the insured.

These bundled plans may have additional coverage, such as providing some cost benefits for vision, hearing and dental care.

Unlike Original Medicare, Medicare Advantage plans have an annual limit on out-of-pocket costs. You could pay as much as $7,550 out of pocket in 2022. Medicare Advantage plans are typically HMOs or PPOs. They provide coverage only in certain local areas, generally require pre-authorization and referrals, and charge copays and coinsurance for most health care services.

Disclaimer: By dialing the phone number you will contact a licensed insurance agent. We do not offer every plan available in your area. Currently, we represent 7 organizations which offer 40 products in your area. Please contact Medicare.gov, 1-800-MEDICARE (TTY users call 1-877-486-2048) 24 hours a day/7 days a week, or your local State Health Insurance Program (SHIP) to get information on all of your options. GL_WS_0923_C