Welcome to Medicare. More than 60 million Americans get their health care coverage through this federal insurance program for older Americans and people with disabilities.
Consider it part of your 65th birthday present.
President Lyndon Johnson signed Medicare into law in July 1965 as a way to help older adults pay for their medical expenses. It was the same year that Medicaid, the health insurance program for low-income individuals, and the Older Americans Act were created.
When Medicare started, it just covered hospital care and doctor visits for older Americans. Over the years the program has been expanded to provide insurance for people with disabilities and those with end-stage kidney disease.
The biggest upgrade came in 2006 when Medicare began covering prescription drugs.
Medicare consists of four separate parts:
- Part A covers hospital costs, hospice care and some skilled nursing care after you’ve been in the hospital.
- Part B pays for doctor visits and other outpatient services, such as lab tests, X-rays and scans and medical equipment.
- Part C is also known as Medicare Advantage, private health insurance plans that cover both parts A and B and sometimes Part D.
- Part D covers prescription drugs.
What does Medicare cost?
Medicare pays the lion’s share of medical costs for enrollees. But it’s not free.
Premiums, deductibles, coinsurance and copays are assessed for almost every service you get. Private supplemental insurance plans — called Medigap plans — can help you fill in the gaps in Medicare’s coverage.
And the federal government has several programs that help pay Medicare’s costs if you can’t afford them.
You’ve actually been contributing to Medicare throughout your working life. You and your employer each pay the federal government 1.45 percent of your wages to help finance the program. That, combined with money from the federal treasury and the premiums that beneficiaries pay help fund this landmark program.
When can you join?
It will be up to you to get ready to join.
No letter will arrive in the mail announcing it’s time to start making these decisions. What’s more, the timetable is specific — and important.
You can start signing up three months before you turn 65, and you’ll have until three months after your 65th birthday month to enroll.
If you miss that deadline, you may end up paying higher premiums. If you are still working and have employer-sponsored health coverage, you can probably wait to sign up.
You’ll need to do some homework before you start assessing options and picking plans.
Make a list of your doctors and decide how important it is to you that you can continue seeing them once you are on Medicare. Also make a list of any medications you take so you can make sure any prescription drug plan you select will meet your needs.
Think about your lifestyle. Are you a homebody and when you travel it’s within the U.S.? Or are you an adventurer who goes abroad frequently? Do you split your time between residences and need medical care in different states?
All these factors are likely to figure into the decisions you make.
This article was origially published in 2011.