If you’re just about to become eligible for Medicare, you may be wondering how your Medicare coverage works and what benefits are included.
Medicare is a federal health insurance program, managed by the Centers for Medicare & Medicaid Services, for eligible United States citizens and legal permanent residents of five or more continuous years. You’re generally eligible for Medicare coverage if you’re 65 or older or disabled. You may also qualify for Medicare at any age if you have end-stage renal disease requiring dialysis or a kidney transplant, or amyotrophic lateral sclerosis (also known as ALS or Lou Gehrig’s disease).
Here’s a breakdown of how Medicare coverage works.
Medicare coverage overview
You can generally get your Medicare coverage in either of two ways: Through Original Medicare, the government-run health insurance program, or through a Medicare Advantage plan, offered through Medicare-contracted private insurance companies.
When you first become eligible for Medicare coverage (either by age, disability, or having the above-mentioned health conditions), you’re signing up for Original Medicare, the federal health insurance program.
Original Medicare is made up of two parts, Part A (hospital coverage) and Part B (medical coverage). Here’s a breakdown of what each of these “parts” covers.
Medicare coverage: Part A
Medicare Part A coverage may include inpatient hospital, skilled nursing facility, hospice, and eligible home health care. As noted above, this type of Medicare health insurance is also known as Medicare hospital insurance.
Part A-covered hospital services generally include medically necessary services and equipment to treat your condition. This may include a semi-private room, general nursing services, and prescription drugs needed as part of your inpatient treatment.
You may be surprised to hear that Medicare Part A coverage doesn’t include long-term care, or the type of care you’d normally get in a nursing home or other long-term facility. Part A only covers limited skilled nursing facility care where personal care (i.e. help with daily tasks like bathing and eating) isn’t the only type of care you need.
Part A covers hospice care if your doctor determines that you’re terminally ill and have six months or less to live. Medicare Part A coverage of hospice services includes doctor and nursing services, hospice aide services, physical and occupational therapy services, prescription drugs for symptom control, and limited, short-term respite care for caregivers.
Medicare Part A coverage may also cover certain home health services, including physical therapy, speech-language pathology, occupational therapy, and/or speech therapy services.
Most people are automatically enrolled in premium-free Part A at age 65 if they’ve worked at least 10 years (40 quarters) under Medicare-covered employment and paid Medicare taxes while working, but you may also manually sign up for it and pay a monthly premium for it if you haven’t worked long enough to get Part A for free. If your spouse qualifies for Part A without a premium, you may be eligible to get premium-free Part A based on his or her work history.
Your Medicare Part A coverage may also come with other costs, including deductibles, coinsurance, and/or copayments.
Medicare coverage: Part B
Medicare Part B coverage generally includes medically necessary outpatient services, including (but not limited to) doctor visits, durable medical equipment, lab tests, ambulance services, mental health care, and preventive services.
If you need certain types of medically necessary durable medical equipment, such as walkers or hospital beds, you may be covered under Part B. You may be required to rent or buy the equipment from suppliers enrolled in the Medicare program, or Medicare may not cover you.
Medicare Part B coverage includes a variety of preventive services to keep you healthy and detect health conditions early on. This includes yearly ‘Wellness’ exams, screenings for various diseases and health conditions, nutrition therapy, tobacco cessation counseling, and certain vaccines (including flu shots, hepatitis B shots, and pneumococcal shots).
Part B includes limited prescription drug coverage. Certain types of medications (typically the ones that need to be administered by a doctor) may be covered, including injectable drugs or medications given by infusion. For all other prescription drug benefits under Original Medicare, you’ll need to sign up for Medicare Part D coverage (see below for more information).
Unlike Part A, most people pay a monthly premium for Part B, which may vary from year to year and depend on your situation. Other costs related to your Medicare Part B coverage may include deductibles, copayments, and/or coinsurance costs. Costs may vary depending on the specific service or item. If you’re not sure what you may have to pay, it’s a good idea to check with your doctor or supplier before receiving the service.
Medicare coverage: other options
Once you’re enrolled in Part A and/or Part B, you may have other Medicare coverage options available to you as well, including Medicare Part C coverage (Medicare Advantage plans), Medicare Part D coverage (prescription drug benefits), and Medicare Supplement insurance (also known as Medigap). Some of these Medicare plans work alongside Original Medicare, while other types (such as Medicare Advantage plans) are an alternative way to get your Original Medicare benefits.
Medicare coverage: Medicare Advantage (Part C)
Medicare Advantage plans provide Original Medicare coverage through Medicare-approved private insurance companies. These plans are required to cover at least the same level of benefits that you’d have under Part A and Part B, with the exception of hospice care (which is still covered under Part A of Original Medicare).
In addition to what’s covered under Original Medicare health insurance, some plans offer other benefits, such as routine dental and vision, wellness programs, hearing care, and prescription drug coverage. If your Medicare Advantage plan includes prescription drug benefits (also known as a Medicare Advantage Prescription Drug plan), you shouldn’t enroll in a stand-alone Medicare Prescription Drug Plan.
There are many types of Medicare Advantage plans, such as Preferred Provider Organization (PPO) plans and Health Maintenance Organization (HMO) plans. Medicare Advantage PPOs and HMOs may work similarly to the employer-sponsored group coverage you might be familiar with.*
It’s important to understand that you’re still enrolled in Medicare when you have a Medicare Advantage plan; you’re just choosing to get your coverage through a Medicare health plan instead of through the federal health insurance program. Because of this, keep in mind that even if you decide to get your Medicare coverage through a Medicare Advantage plan, you’ll need to keep paying your Part B premium, in addition to any required premium for your plan. Some service areas may offer Medicare Advantage plans with premiums as low as $0; however, even in this case, you’d still need to pay your Part B premium.
Medicare coverage: Part D Prescription Drug
As mentioned above, Original Medicare offers limited prescription drug benefits, and you’re only covered for medications you receive in certain inpatient and outpatient situations. Instead, Original Medicare beneficiaries can sign up for Medicare Part D prescription drug coverage through a separate Medicare Prescription Drug Plan. Keep in mind that these plans provide stand-alone prescription drug benefits, and you’ll need to stay enrolled in Part A and/or Part B for your hospital and medical coverage.
Alternatively, you can also get Medicare Part D coverage through a Medicare Advantage Prescription Drug plan (as mentioned above). The convenience of these plans is that they provide all of your Medicare Part A, Part B, and Part D benefits under a single plan.
If you currently take prescription drugs and are interested in getting Medicare Part D coverage, make sure that the plan you’re considering covers your current medications. You can look up this information by checking the plan’s formulary, or list of covered drugs. Every Medicare Prescription Drug Plan and Medicare Advantage Prescription Drug plan includes a formulary, and you can typically find this information online (or contact the plan). Keep in mind that formularies may change at any time, but the Medicare plan will notify you if needed.
Medicare Supplement (Medigap) coverage
Medicare Supplement plans may help pay for out-of-pocket costs not covered in Original Medicare, such as copayments, coinsurance, deductibles, and emergency overseas health coverage. You can learn more about this type of Medicare coverage by checking out this website.
What Medicare coverage is right for me?
Hopefully, you now have a better idea of all the different types of Medicare coverage that may be available to you. If you’re still trying to figure out what may work best for your situation, you might start by considering the different factors that are important to you. For example, do you travel frequently and prefer to not have to worry about provider networks? Under Original Medicare, you can get health-care services from any doctor or provider who accepts Medicare assignment. Keep in mind that your costs will be lowest if the provider accepts assignment, meaning that he or she agrees to accept the Medicare-approved charge for that service as full payment and not charge you above that amount (aside from cost sharing). And speaking of travel, some Medicare Supplement plans may help cover emergency medical services when you’re out of the country (generally covering 80% for approved services, up to plan limits).
Do you have a lot of doctor visits and high out-of-pocket costs? A Medicare Supplement plan, as mentioned above, may help with certain out-of-pocket costs under Original Medicare, such as copayments and deductibles. Or, perhaps you’re interested in coverage beyond Original Medicare, such as routine vision coverage or wellness programs. In that case, there may be Medicare Advantage plan options in your area that cover extra benefits.
If you’re enrolled in, or will soon be eligible for Medicare, and are considering whether one of the above Medicare plans could be a good option for you, I can help you check those out. I’m happy to walk you through your options by phone or email you information; you can request that using the links below. To compare your options right away, click the Compare Plans buttons on this page and view the Medicare plan options offered in your area. If you’d like to get personalized assistance figuring out the type of Medicare coverage that may fit your needs, talk to me or another Medicare.com licensed insurance agent by calling us at the number below.