If you’re fast approaching — or have just recently passed — that milestone, take heart. Medicare can be a welcome birthday present, especially if you take time to understand the different parts of the program and the wealth of health care resources it provides.
Use this AARP guide as an introduction. We promise that by the end of our tour you will understand the difference between Medicare Parts A, B, C and D.) For a deeper dive into Medicare, follow the links to additional resources and tips. But first things first:
What is Medicare?
Medicare is a federal health insurance program for those 65 and older. It was signed into law by President Lyndon B. Johnson in July 1965 as a way to help older adults pay their medical expenses. (Medicaid, the federally run health insurance program for low-income people, was created at the same time.)
Over the years, Medicare has been expanded to provide coverage for some younger people with disabilities, and for people with end-stage kidney disease. In 2003, President George W. Bush established Medicare Part D, a program designed to help people with Medicare pay for their prescription drugs.
Before turning 65, most people get health insurance through group plans offered by their employer or their spouse’s employer. People who are self-employed or who don’t have health insurance through their job may buy individual policies on their own.
When you turn 65, however, you’ll likely be eligible for one of the largest group health plans in the world. Medicare can be used as your sole health insurance coverage or as companion or backup coverage to insurance you have through your employer, spouse, former employer or union.
Medicare consists of several plans or "parts":
• Parts A and B are often referred to as Original, or Traditional, Medicare. Part A helps pay your hospital bills, and most people have paid for their Part A premiums through payroll taxes while working. Part B helps pay for doctor visits and other medical services, including screenings for heart disease, diabetes and some types of cancer.
• Part C plans, also known as Medicare Advantage plans, are Medicare-approved plans offered by private insurance companies. Part C plans are an alternative to Original Medicare. Along with covering doctors and hospitals, they often cover prescription drugs, too.
• Part D plans are Medicare-approved private plans that help people who have Parts A and B to pay for prescription drugs.
Keep in mind that Medicare doesn’t cover all of your health care costs. Many services (such as routine dental and vision care) are not covered by Medicare. And unless you have additional insurance or qualify for low-income assistance, even with Medicare, you will be paying some premiums, deductibles and copays.
Your Other Health Plans
If you’re 65 or older and are still covered by a group health plan through your spouse or employer, or through a retiree, union or private plan, you might not need Medicare right away, or you may need only a part of it.
Your health care resources over and above those available through Medicare will have a major impact on how you use Medicare and how much you will pay for the benefits Medicare offers.
Before making a decision whether or not to use Medicare, or changing any of your non-Medicare health care coverage, find out how your decisions will affect your overall health insurance portfolio.
Medicare and/or your insurer or benefits manager at your employer or union can answer your questions — and it doesn’t hurt to confirm answers by speaking with a second source. Never drop your private coverage without fully understanding the consequences. You might not be able to get it back!
For more information about coordinating Medicare with your other medical coverage, see the articles "Medicare When Working Beyond Age 65" and "What if You Have Other Health Coverage?" Or download the Medicare publication Medicare and Other Benefits: Your Guide to Who Pays First.
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