Earlier, you may not have given much thought to the different health plans offered by Medicare. However, with age, your options for health insurance and health care needs change. Choosing the right coverage can help meet these changing needs and minimize your out-of-pocket expenses. If you’re soon going to become eligible for Medicare, you must understand the basics of Medicare.
What is Medicare?
Usually, people confuse Medicare with Medicaid, the government program. The primary difference between these programs is that Medicare is for individuals with qualifying disabilities and retirees, while Medicaid is US health insurance for low-income individuals.
Medicare comprises of the following parts:
– Original Medicare (Part A and Part B)
– Medicare Advantage (Part C)
– Prescription drug plans (Part D)
To reduce out-of-pocket costs of certain medical expenses, Medicare also offers supplemental insurance plans.
What is Original Medicare?
Original Medicare includes Part A (hospital insurance) and Part B (medical insurance).
Part A covers typical hospital expenses that you incur after a surgery or an illness. This includes:
– Home health care
– Semi-private hospital room
– Hospice care
– Stays in a skilled nursing facility
– Blood transfusions (3 pints or more)
– Any medical services or meals you receive while in the hospital
On the other hand, Part B provides coverage for the outpatient services you receive. It covers your visits to the doctor, irrespective of whether it’s a specialist or primary care doctor. It also covers the cost of the following services:
– Laboratory testing
– Ambulance rides
– Preventative care
– Diagnostic imaging
Keep in mind that Part B also covers the above-mentioned medical expenses even when they occur inside a hospital. For instance, your doctor may not perform mammogram tests in-office even though they fall under preventative care. In this situation, Medicare Part B will cover the cost even if it’s outside the office.
Do you need to pay for Part A and Part B?
There’s no monthly premium with Part A hospital insurance for most people. However, Part B usually has a monthly premium since it is medical insurance. This monthly premium is determined based on your yearly adjusted gross income.
How can you enroll in Original Medicare?
If you’ve been receiving Social Security benefits because of a disability, you’re automatically enrolled in Part A and Part B when you turn 65. However, if you don’t receive Social Security benefits, you must sign up for Original Medicare using the Social Security Administration. You can call Social Security, visit the local office, or enroll in Medicare online.
Keep in mind that there are fixed periods for enrolling in Medicare. You’ll need to apply during your IEP (Initial Enrollment Period). IEP is your 7-month window that starts three months before your 65th birthday and ends three months after your 65th birthday.
You can choose to enroll in Part A and Part B, or only Part A. Usually, most people delay enrolling in Part B if they have health insurance through a spouse’s employer or their employer. If you choose to sign up for Part B later, you may need to pay a late enrollment penalty.
If you miss enrolling during your IEP, you can register during the GEP (General Enrollment Period) from January to March each year.