Medicare is a federal health-insurance program for those who are at least 65 years old, younger but receiving Social Security disability payments, or younger but suffering from end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS). Medicare assists the elderly and handicapped in obtaining the medical care they require.
Learn how the program works, when to join, and what you need know to get the most out of it.
Medicare is a government-sponsored health insurance program for anyone over the age of 65. It also includes people on Social Security disability benefits, as well as those with end-stage renal illness or amyotrophic lateral sclerosis.
The current Medicare program dates back to July 30, 1965, when President Lyndon B. Johnson signed a measure to safeguard the elderly from rising health-care expenditures. As of 2021, the total number of registrants has surpassed 63 million.
If you get Social Security payments, you'll usually be immediately enrolled in Original Medicare (Parts A and B).
The program offers hospital and medical insurance, which might assist you in paying for the services you require. If you're 65 or older and need to see a doctor, Medicare Part B may be able to assist pay the expense because it covers preventative and diagnostic services. If you become ill and require temporary inpatient care, you would use Medicare Part A, which covers hospital stays.
Medicare can help you save money on health-care out-of-pocket payments, but it doesn't cover all medical costs. Applying for a Medicare supplement (Medigap) coverage or a Medicare Advantage plan will help you fill in some of these gaps.
Medicare's Different Types
Medicare is divided into five sections: Parts A, B, C, D, and Medigap plans. Each portion is responsible for a specific set of services and has its own set of regulations for premiums, deductibles, enrollment, and late enrollment penalties.
Part A
Part A of Medicare is hospital insurance that helps pay for services including short-term home health care, hospice care, inpatient hospital treatment, and short-term skilled nursing facility care.
Part A usually does not require you to pay a premium if you or your spouse made the required amount of contributions toward Medicare taxes while working. It is necessary to labor for forty-quarters of an hour.
In 2022, the Part A hospital inpatient deductible will be $1,556, up from $1,484 in 2021.
Periods of enrollment:
Initial enrollment: This is a seven-month term that begins three months before and concludes three months after your 65th birthday month.
If you don't enroll during your first enrollment period because you're covered by an employer's health plan, you can enroll at any time while you're still covered by the group health plan, or when your job or coverage ends, whichever comes first.
You can enroll each year during the regular enrollment period, which runs from January 1 to March 31, although there may be a late enrollment penalty.
If you're eligible for premium-free Part A and weren't automatically enrolled, you can join at any time after you turn 65 and become eligible for Medicare. Your Part A coverage will begin six months before the application deadline. It will take effect retrospectively, but no earlier than the month in which you initially became eligible.
If you're obliged to pay a premium and don't join when you're initially eligible, you'll be assessed a late enrollment fee that can increase your monthly premium by up to 10% for twice the number of years you didn't enroll.
Part B
Part B of Medicare is medical insurance that helps pay for preventative and diagnostic treatments, as well as certain home health care, outpatient care, and medical equipment.
Premium: In 2022, the regular Part B premium will be $170.10, up from $148.50 in 2021. Depending on your income, you may have to pay extra.
Deductible: In 2022, the Part B deductible will be $233, up from $203 in 2021.
Periods of enrollment:
The times when you can enroll in Part B are fairly similar to the hours when you can enroll in Part A.
Initial enrollment: This is a seven-month period that begins three months before and concludes three months after your 65th birthday.
Special enrollment: If you don't enroll during the initial enrollment period because you're covered by an employer-sponsored health plan, you can enroll at any time during the eight months after your job or coverage ends, whichever comes first.
You can enroll each year during the regular enrollment period, which runs from January 1 to March 31, although there may be a late enrollment penalty.
If you don't sign up for Part B when you first become eligible, you may be subject to a permanent late enrollment penalty. For each year you don't enroll, the penalty is equal to a 10% rise in your premium.
Part C or Medicare Advantage
Medicare Advantage (MA), often known as Part C, refers to commercial organizations that provide Medicare-approved plans. The programs make Medicare Parts A and B benefits more accessible. They frequently include prescription medication coverage, as well as additional benefits like vision, dental, and hearing care. To enroll in a Medicare Advantage plan, you must have both Medicare Parts A and B.
Premium: Some MA plans require you to pay a premium in addition to your Part A (if applicable) and Part B premiums. Others do not charge a fee and may be able to assist you cover all or part of your Part B premiums.
Deductibles: Deductibles differ per plan.
Period of enrollment:
Initial enrollment: This is a seven-month period that begins three months before and concludes three months after your 65th birthday.
Special enrollment: If an event occurs that leaves you without coverage, such as losing other coverage, you may be eligible to enroll in a Medicare Advantage plan.
If you currently have Original Medicare (Parts A and B) and want to enroll in a Medicare Advantage plan, you can do so between October 15 and December 7 each year.
General enrollment: If you have Part A and are getting Part B for the first time during this period, you can enroll during general enrollment from January 1 to March 31.
This plan does not have a late enrollment penalty, but it does require that you have both Parts A and B in order to sign up. If you don't sign up for Part A (if you have to pay for it) or Part B during your first enrollment or a special enrollment period, you may still be penalized.
Section D
Private insurance firms provide Medicare Part D medication coverage, which helps pay the cost of prescription drugs. To apply, you must have either Part A or Part B.
A monthly fee is charged by most Part D plans. However, depending on the plan you pick, your premium, deductible, copayment, and coinsurance will all differ.
Deductibles: Deductibles differ per plan.
Period of enrollment:
Initial enrollment: This is a seven-month period that begins three months before and concludes three months after your 65th birthday.
If an event occurs that causes you to lose coverage, such as moving or leaving your work, you may be eligible for special enrollment in a Medicare Part D medication plan.
If you currently have Part A or Part B, you can enroll in a drug plan during Open Enrollment, which runs from October 15 through December 7.
After general enrollment: If you don't have Part A, you can enroll in a Medicare drug plan from April 1 to June 30 and Part B from January 1 to March 31. (the general enrollment period).
If you cancel your MA plan and return to Original Medicare, you can enroll in Part D during the open enrollment period, which runs from January 1 to March 31 each year.
If you enroll in Part D after your original enrollment period has ended and you don't have alternative creditable coverage, you may be charged a late enrollment fee. The penalty will be applied to your premium for the rest of your life, and the amount will be determined by how long you went without coverage.
Medigap insurance, sometimes known as Medicare supplement insurance, is an optional coverage given by private insurers that can complement Original Medicare benefits. Copays, coinsurance, and deductibles can all be covered by a variety of standardized plan types. To get a Medigap plan, you must have both Parts A and B.
Prescription medicines are not covered by Medigap insurance. For that, you'll need Part D or an MA plan. The majority of them also don't offer hearing, vision, or dental coverage.
Premiums for Medigap plans differ.
Deductible: Depending on the plan, deductibles vary. Many plans have no deductible and can help you save money on your Part A and/or B deductibles, as well as copays and coinsurance.
Period of enrollment:
Open enrollment for Medigap insurance starts the first month you have Part B and are 65 or older. It has a six-month duration. When considering whether or not to provide you a Medigap coverage and how much to charge you during this period, insurers cannot take your health into account.
Outside of Medigap open enrollment: If you miss your Medigap open enrollment period, you may be able to purchase a plan if an insurer is willing to give you one.
If you don't buy a plan during Medigap open enrollment, there isn't technically a late enrollment penalty, but you might end up paying a lot more for a Medigap coverage or being denied one outright. Outside of the Medigap open enrollment period, insurers can price and sell you a plan based on your health and previous conditions.