Medicare is a federal health insurance program for participants 65 and older, under 65 with certain disabilities, or anyone diagnosed with End-Stage Renal Disease (ESRD). It is comprised of different parts to cover specific services: Medicare Part A covers hospital insurance, which is premium free for participants who have earned enough work credits (paid taxes on work) or have a spouse who has done so at least 62 years of age. Part B requires a monthly premium and is designed to cover outpatient and medical care, and enrollment is required for members who are retired or who have lost Current Employment Status and are eligible for Medicare. Part D coverage, for prescription coverage, is not required for plan participants enrolled; it requires a monthly premium, unless the participant qualifies for extra-help assistance.
It’s important for you to know when to sign up for Medicare or when to join a Medicare plan. Remember these times so you get the most out of your Medicare and avoid late enrollment penalties:
Initial Medicare Enrollment Period: Most people get Medicare Part A (Hospital Insurance) and Part B (Medical Insurance) during this period. It starts 3 months before you turn 65 and ends 3 months after you turn 65. If you’re not already collecting Social Security benefits before your Initial Enrollment Period starts, you’ll need to sign up for Medicare online or contact Social Security. To get the most from your Medicare and avoid the Part B late enrollment penalty, complete your Medicare enrollment application during your Initial Enrollment Period. This lifetime penalty gets added to your monthly Part B premium, and it goes up the longer you wait to sign up. Find out if you should get Part B based on your situation.
General Medicare Enrollment Period: If you miss your Initial Enrollment Period, you can sign up during Medicare’s General Enrollment Period (January 1–March 31), and your coverage will start July 1.
Special Enrollment Period: Once your Initial Enrollment Period ends, you may have the chance to sign up for Medicare during a Special Enrollment Period (SEP). You can sign up for Part A and or Part B during an SEP if you have special circumstances.
Private insurance companies, which offer Medicare Advantage plans, have a bit more flexibility in designing their coverage, so you’ll find more differences between plans. This means you need to be more careful comparing plan options to make sure you don’t overlook anything. As mentioned, Medicare Advantage plans give you the opportunity to get coverage for benefits beyond Original Medicare. This may include routine vision and dental, hearing, and health wellness programs. Normally, under Original Medicare, you’d pay for these services out of pocket unless you have other insurance.
Another benefit of Medicare Part C is that many of these plans also include Medicare Part D prescription drug coverage as part of the plan coverage. Also known as Medicare Advantage Prescription Drug plans, these plans give you the convenience of having all of your Medicare benefits administered through a single plan.
If you enroll in a Medicare Advantage Prescription Drug plan, you will not need to enroll in an additional Medicare Prescription Drug Plan!
Medicare Part D, the prescription drug benefit, is the part of Medicare that covers most outpatient prescription drugs. Part D is offered through private companies either as a stand-alone plan, for those enrolled in Original Medicare, or as a set of benefits included with your Medicare Advantage Plan.
If you have Medicare and full Medicaid coverage, most of your health care costs are likely covered. You can get your Medicare coverage through Original Medicare or a Medicare Advantage Plan (Part C). If you have Medicare and full Medicaid, you'll get your Part D prescription drugs through Medicare. And, you'll automatically qualify for Extra Help paying for your Medicare drug coverage (Part D). Medicaid may still cover some drugs and other care that Medicare doesn’t cover. Medicare pays first, and Medicaid pays second. Medicaid never pays first for services covered by Medicare. It only pays after Medicare, employer group health plans, and/or Medicare Supplement (Medigap) Insurance have paid.
Medicare Supplement insurance plans work with Original Medicare, Part A and Part B, and may help pay for certain costs that Original Medicare doesn’t cover. These plans don’t provide stand-alone coverage; you need to remain enrolled in Part A and Part B for your hospital and medical coverage. Medicare pays for your health-care bills primarily, while the Medigap plan simply covers certain cost-sharing expenses required by Medicare, such as copayments or deductibles. In addition, Medigap insurance plans may help with other costs that Original Medicare doesn’t cover, such as Medicare Part B excess charges or emergency medical coverage when you’re traveling outside of the country.
If you don’t already have creditable prescription drug coverage (coverage that is at least as good as the Part D benefit), you should consider buying a separate stand-alone Medicare Part D Prescription Drug Plan to cover the costs of your prescription medications. Also, Medicare Supplement insurance plans generally don’t offer extra benefits like routine dental, vision, or hearing coverage beyond what’s already covered by Medicare.
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Medicaid is a state to state assistance program, while Medicare is a national medical care program that is for individuals over 65 or those who have certain disabilities. You can have both, making you a dually eligible beneficiary.
A copay is a fixed fee that you may owe for a particular medical service, such as a visit to your Primary Care Provider, Urgent Care, or a prescription. You can usually find this directly on your health plan ID card.
A deductible is the amount you have to pay before your health plan begins to share the cost of your covered services. For example, if you have a $10,000 bill, but a $2,000 deductible, your insurance will share the cost (partially or fully, depending on your plan) for $8,000.
After you meet your deductible, coinsurance is how you will share your medical expenses with your health plan until you hit your out-of-pocket maximum. For example, if your coinsurance is set at 20% and you have a bill for $1000, you are responsible for $200. You can only share costs for approved medical services.
Out-of-pocket maximum is the most you will pay for covered medical expenses per calendar year. Once you reach it, your plan will pay in full for the remaining costs of covered care you may incur for the rest of the year.