Medicare is a Federal Health Insurance Program for people who are 65 and older, and for people with certain qualified medical conditions (for example, Lou Gehrig’s disease). When turning 65 and enrolling in Medicare for the first time, there are important dates and other considerations you need to know before making decisions on what is best for you.
How Medicare Works
Medicare is divided into 5 parts; A, B, C, D and Medicare Supplements, known as Medigap, or Gap insurance.
Part A (Hospital Insurance) covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. Part A does not cover the full amount of your hospital bill.
Part B (Medical/Doctor Insurance) covers certain doctors’ office visits, blood tests, X-rays, diabetic screenings, outpatient care, medical supplies, specialists, and preventive services.
You pay a small deductible each year before your Medicare Part B benefits begin. Expect to pay 20% of the participating Medicare doctor bill.
Part C (Medicare Advantage Plan) is an optional type of Medicare health plan offered by private companies and limited to a local network of Doctors, Hospitals, and Specialists (except in emergencies).
Medicare Advantage plans are required to provide all Medicare Part A and Medicare Part B benefits (except hospice care). The additional benefits vary among the individual private health insurers. Most of these plans have co-payment, co-insurance, and other out-of-pocket costs that can total $6,700 annually.
Part D (Prescription Coverage) is optional prescription drug coverage through private insurance companies covering most of your prescription drug costs depending on your specific plan. Your monthly fee varies among insurers.
Medicare Supplement (Medigap) is an insurance policy that pays the health care costs that your original Medicare (parts A & B) doesn’t cover, such as copayments, coinsurance, and deductibles.
Medigap plans have a monthly premium, you can switch plans at any time, and there is no network of doctors or hospitals so you have the freedom to go to any hospital and choose any doctor or specialist who accepts Medicare.
Medigap is sold by private insurance companies to fill coverage “gaps” in Medicare plans.