Section 1: Medicare Essentials
5 Facts About Medicare
ESTIMATED READ TIME: 5 MINUTES
IN THIS ARTICLE
Some terms you’ll encounter in this article:
1. MEDICARE CONSISTS OF 4 PARTS
Since Congress created Medicare in 1965, the benefits covered under the program have expanded along with the number of recipients. The program now covers 55.8 million Americans age 65 and older, plus 8.3 million younger people with a disability. These days, Medicare has four parts.
Note: Private companies also have stepped in to provide Medicare supplement plans, better known as Medigap plans — insurance that helps pay for expenses Medicare doesn’t cover.
2. MEDICARE IS THE LARGEST NATIONAL HEALTH CARE PROGRAM
As a federal government insurance system, Medicare helps tens of millions of older adults and younger people with disabilities pay for their health care. Wherever you live nationwide, original Medicare is available regardless of your income or the state of your health.
3. IF YOU MISS ENROLLMENT DEADLINES, YOU COULD END UP WITH LIFETIME PENALTIES
As you approach 65, you’ll usually want to enroll in Medicare during your initial enrollment period. This seven-month period spans the three months before the month in which you turn 65 through the three months after turning 65.
If you’re already receiving Social Security benefits, you’ll be enrolled automatically in parts A and B on the first day of the month you turn 65. Or if your birthday is on the first day of a month, your automatic enrollment will happen during the previous month. (Puerto Rico’s rules differ.)
If you or your spouse are working and have health insurance through an employer with 20 or more employees, then you can delay signing up for Medicare. However, you must enroll in parts A and B within eight months of losing your employer-based coverage or you will have to pay a penalty. For Part D prescription drug coverage, you have only two months to enroll after you lose coverage that's considered at least as good as Medicare to avoid a penalty.
If you enroll late, Medicare parts A, B and D and Medigap plans may charge penalties.
4. YOU WILL NEED TO DECIDE BETWEEN ORIGINAL MEDICARE AND MEDICARE ADVANTAGE
You can’t be covered by both original Medicare and Medicare Advantage at the same time. But you won’t be stuck with your initial decision forever. From Oct. 15 to Dec. 7 each year, you can make a switch and also change your Part D insurance.
Original Medicare, also known as traditional Medicare, works on a fee-for-service basis. This means you can go to any doctor or hospital that accepts Medicare anywhere in the United States, and Medicare will pay its share of the bill for any Medicare service it covers.
You pay the rest unless you have additional insurance that covers those costs, such as a Medigap plan or your state’s Medicaid program. Original Medicare covers many health care services and supplies, but it doesn’t pay all of your expenses.
The Medicare Advantage program, Part C, gives people an alternative way of receiving their Medicare benefits. The program consists of many different health plans — typically health maintenance organizations (HMO) and preferred provider organizations (PPO) — that Medicare regulates but private insurance companies run.
The number of plans varies by where you live. Plans may charge monthly premiums in addition to the Part B premium, although some plans in some areas are available without additional cost.
5. YOU AREN’T THE ONLY ONE CONFUSED BY MEDICARE
Confusion about Medicare is almost inevitable for two main reasons. First, Medicare’s regulations affect different people in different ways, so the decisions you need to make may be unlike the next person’s.
Medicare also offers a range of choices that can be bewildering if you aren’t sure how to sift through them to find the one that’s right for you. That’s where we can help.
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