Medicare Overview

Medicare is a government-run health insurance program for the elderly, people with disabilities, and those with end-stage renal disease (ESRD) requiring dialysis or a transplant. Citizens pay for Medicare through contributions deducted from paychecks during their working years.

This FindLaw article provides a general overview of Medicare and its main components, with information about eligibility, coverage, and enrollment.

Medicare Overview

The federal Centers for Medicare and Medicaid, part of the U.S. Department of Health and Human Services (HHS), manage Medicare and Medicaid programs.

Medicaid is a health insurance program for low-income Americans jointly administered by the federal government and each state.

By contrast, Medicare is a national health insurance program administered by the federal government. You can learn more about the differences between Medicare and Medicaid in this FindLaw article.

Medicare Eligibility

People with ESRD can enroll in Medicare if they meet all of the following criteria:

• Their kidneys do not work
• They have had a kidney transplant, or they receive dialysis
• They receive or are eligible to receive Social Security benefits

Most prospective Medicare beneficiaries enroll in Medicare during an initial enrollment period that coincides with turning 65. Prospective beneficiaries who receive Social Security payments at least four months before turning 65 are automatically enrolled in Medicare.

Medicare Benefits

Medicare has four parts:

• Part A Hospital Insurance
• Part B Medical Insurance
• Part C Expanded Coverage
• Part D Medicare Prescription Drug Coverage

Medicare benefits include, but are not limited to, the following:

• Inpatient hospital care
• Surgery
• Long-term care (including nursing homes)
• Hospice Care
• Durable medical equipment
• Home health services
• Preventive services

Medicare Coverage

Medicare beneficiaries should note that Medicare coverage can vary depending on where you live. The following factors contribute to Medicare coverage rules and regulations:

• State laws
• National laws
• National Medicare coverage decisions

Most people qualify for free Medicare Part A coverage because they or a spouse paid the Medicare tax long enough while working. If you are 65 or older and don't qualify for free Medicare coverage, you can enroll and pay a fee each month for health coverage. If you enroll in and pay for Part B for hospitalization, you need to buy Part A.

For a benefit period, Medicare Part A covers most of the costs of the following:

• Hospital stay
• Skilled nursing facility
• Home health care costs

The benefit period begins the day a beneficiary enters a healthcare facility, including hospitals, and continues until the individual is out for 60 consecutive days.

If you're in and out of the hospital or nursing facility several times during a specific period but haven't been out for 60 consecutive days, all inpatient bills for that time are part of the same benefit period.

Medicare Part A hospital insurance includes a deductible that the beneficiary must pay before Medicare coverage starts.

Medicare Part B

Medicare Part B goes in tandem with Medicare Part A. Medicare beneficiaries who qualify for premium-free Part A coverage are concurrently eligible for Part B coverage. Those who pay a premium for Part A must meet the following requirements to get Part B coverage:

• Be a U.S. resident
• Be either a U.S. citizen or a legal permanent resident residing in the U.S. for five continuous years

Medicare medical insurance covers basic medical services provided by

• Doctors
• Clinics
• Laboratories

Note that Medicare pays only about 80% of the approved charges for medical services, with the beneficiary bearing responsibility for the remainder.

Medicare Part B Coverage

Medicare Part B covers the following:

• Medical care through a healthcare provider
• Insulin
• Outpatient hospital treatment
• Ambulance services
• Outpatient drug administration
• Durable medical equipment and supplies
• Mental health care services
• Preventative screenings

Medicare beneficiaries should check the Medicare website to determine if Medicare covers a particular service.

Medicare Part B Premiums

Approximately three months before your 65th birthday, you'll receive an initial enrollment package containing information about Medicare. If you want Medicare Part B, you must enroll in Part B.

You can arrange to have the Part B premiums deducted from your Social Security check to avoid getting physical bills. Otherwise, you can pay your premium in one of the following ways:

• Medicare Easy Pay
• Checking or Savings Account
• Pay by mail

Medicare Advantage Part C and Supplement Plans

Medicare Part C, or Medicare Advantage, allows Medicare beneficiaries to enroll in private plans to help lower their costs. These private health plans include, but are not limited to, the following:

• Health maintenance organizations (HMOs)
• Preferred provider organizations (PPO)

These health plans, offered by private health insurance companies, provide the Part A and Part B benefits described above; most offer prescription drug coverage. In addition, most Medicare Advantage plans also offer the following benefits:

• Vision
• Hearing
• Dental

Medicare Advantage plans also offer other forms of coverage not provided by original Medicare (Parts A and B).

Medicare Supplement Insurance (Medigap) is extra insurance you can buy from a private insurance company to help pay your share of out-of-pocket costs of original Medicare. In general, you must have Medicare Parts A and B to buy a Medigap policy.

While Medicare Supplemental plans offer more coverage, this comes with additional out-of-pocket costs for the beneficiary. With Medicare Advantage Plans, you may need a referral to see a specialist. Since these are private insurers, the rules, procedures, and costs are subject to change each year.

Medicare Part D

Medicare beneficiaries eligible for Medicare Part A or Part B are also eligible for prescription drug coverage under Medicare Part D. Part D helps beneficiaries afford drugs, including expensive medications.

If you're eligible for Medicare Part A or Part B, you're also eligible for prescription coverage under Medicare Part D. You'll have to pay a penalty if you join Part D after your eligibility date. No health screening is required before enrolling in a Part D prescription drug plan.

Prescription Drug Coverage

Medicare-approved private insurance plans offer prescription drug coverage under Part D, including, but not limited to, the following:

• Stand-alone prescription drug plans
• Medicare Advantage plans that include prescription medication coverage

Monthly premiums and cost-sharing costs will vary by plan. Remember that some Medicare Advantage plans (Part C) don't charge extra premiums for prescription coverage. Medicare beneficiaries may pay coinsurance or copayment costs for certain prescription medications.

Additional Coverage

As noted above, although Medicare covers a lot of health care costs for its beneficiaries, Medicare does not cover all costs. This results in a coverage gap for many Medicare beneficiaries. Medicare beneficiaries have options for supplemental coverage to fill in those gaps. These options include, but are not limited to, the following:

• Medigap (Medicare Supplement Insurance)
• Medicaid for those qualifying with lower incomes
• Employer-sponsored insurance for retirees

Medicare is an expansive program that is constantly adjusting to meet the needs of enrollees. You can keep up-to-date on changes through the Medicare website or Findlaw's Medicare section. Findlaw's Medicare section includes Medicare FAQ and similar articles.

Get Legal Help

Medicare laws are vast and complex. An experienced healthcare attorney can help you understand these laws and your options. Talk to a healthcare attorney near you today.