Understanding Medicare: A Brief Overview
Medicare is a federal program that provides health insurance for Americans aged 65 and older or who meet certain disability standards. Medicare offers many benefits, but it also has limitations. The program can be confusing to navigate, so this article will serve as your introduction to understanding Medicare basics.
The first enrollment period an individual is eligible for is called the Initial Enrollment Period. This period begins 3 months prior to the individual’s 65th birthday and continues three months after. This enrollment period is important not to miss as there could be penalties for late enrollment.
Even if an individual chooses to continue employment after age 65 and is covered under a group health plan, he or she should consult with a Medicare agent to find out how to get the most out of coverage and avoid penalties.
Original Medicare is made of Parts A and B.
Medicare Part A is Medicare’s basic coverage of hospital services. Medicare Part B covers outpatient services such as doctor visits, lab tests, and other diagnostic procedures.
Parts A and B combined will typically cover about 80% of medical expenses.
Because there are many things that are not covered by Original Medicare, most individuals choose to enroll in additional plans. Individuals who want to obtain additional coverage will choose between Medicare Advantage and Medigap.
Medicare Advantage is also known as Medicare Part C. Advantage plans bundle Parts A and B together, pay for the 20% of expenses that Parts A and B don’t pick up, and then offer additional benefits like dental, vision, and hearing, as well as prescription drug coverage.
Actual coverage will depend on the type of Medicare Advantage plan chosen. There are some Part C plans that do not include prescription drug coverage and there are many other limitations that must be considered.
Medigap Plans are also known as Medicare supplemental plans. These plans provide coverage for the 20% of expenses that are not covered by Parts A and B.
Medigap Plans do not include dental, vision, and hearing, or prescription drug coverage, so additional policies will need to be purchased.
*It is important to note that while this brief description about the differences between Medicare Advantage and Medigap Plans makes it seem like Advantage Plans are the best choice, there are many other considerations.
Medicare Part D
Medicare Part D consists of Prescription Drug Plans. As mentioned earlier, some Medicare Advantage Plans have drug coverage included. If you have chosen to pursue a Medigap plan, you will need to obtain a separate policy for prescription drugs.
This article was a very short introduction to those just getting started on their Medicare journey. For more information, consult with a Medicare agent or call your Social Security Administration office. There is also great information online at Medicare.gov.
And, as always, John is here to help answer all of your Medicare and insurance questions!