Medicare is the primary government health insurance plan funded by the U.S. federal government. Its benefits are available to people sixty-five years or older, along with those who have qualifying disabilities. The program was initiated by former U.S. President Lyndon B. Johnson in 1965. It was revised as part of the Social Security Act Amendments to include more healthcare options for those in need.
Medicare eligibility is determined based on income, taxpayer status, disability status and more. Some Medicare plans are free, while others require out-of-pocket expenses to be paid by enrollees. Continue reading for an in-depth comparison between the Medicare plans potentially available to you today.
Medicare Part a is a type of government health insurance that is offered to a vast majority of retired U.S. citizens. Applicants who have existing emotional or mental disorders, but who are not of retirement age are also extended this type of healthcare coverage. Medicare Part A covers free of cost the following:
- Hospital stays.
- Treatments for debilitating disease.
- Treatment of traumas or accidents.
- Treatment for illness and injury.
- Hospice stays.
If you are not qualified to receive Medicare Part A for free, then expect to pay between $250-450 in premiums per month. Medicare Part A is one part of the “original Medicare” package offered by the U.S. government.
Medicare Part B covers medical needs not covered by Part A. This second half of the “traditional Medicare” charges a premium. In general, you will pay around $150 a month, excluding your deductibles and copayments. While Part A is automatically given to most retirees, Part B is an election. However, not opting for Part B when you first apply for Medicare can cost you in penalties if you should ever decide after the fact that you want it. These penalties remain for the life of the policy. Therefore, the best strategy is to elect for Part B when you are enrolled into Part A. Many insurance agencies offer Medicare Part B plans, so you can compare them and find the lowest price.
The combination of Part A and an elected Part B plan is called Original Medicare. It also goes by the name Traditional Medicare. In most cases you are able to get your healthcare completed from the doctor or hospital of your choice. They must accept Medicare, however. Understand that medications are not covered in traditional Medicare. You can get this covered by adding in the Medicare Part D. In most cases you do not have to have a referral in order to see a specialist. There is no yearly limit to what you pay for out of pocket with original Medicare.
Most new retirees use Medicare open enrollment to select the Medicare Part C plan. This is the most comprehensive plan as it includes not only your prescription medications, but also dental and vision. The comparison between the Advantage plan and the Original Medicare is that it covers more, and usually have a low monthly premium. This plan caps the amount you will ever pay out of pocket. Some good questions to ask your provider about their plan should include:
- How much is the monthly premium (if any)?
- What can I expect to pay for typical copayments?
- How much is the annual deductible?
- Does it cover your medications?
- What is the dental, vision or hearing plan?
If you need prescription coverage, then you may want to apply for Medicare Part D. This is often referred to as the prescription drug plan. This plan was developed specifically to cover out of pocket expenses for medications and medical equipment. The amount you will pay for this is income based and it considers other potential ways in which you may have your meds covered outside of the plan.
Annual Medicare enrollment may leave you with certain services not fully covered. This is where gap insurance comes in. This type of Medicare literally fills in the gaps that your main plan does not cover. It is considered a supplementary coverage and is designed to work well with all the various Medicare parts. Plans are sold through the healthcare marketplace, or private insurance companies.
The time it takes for your initial Medicare enrollment period to complete is seven months. This is of course if you do not qualify for an exception. The official Initial Medicare Enrollment Period beings three months prior to your 65th birthday. For example, if you were born on January 1, your Initial Medicare Enrollment Period begins on August 1 of the same year during which you turn sixty-five.
People born on the first day of any month receive special Medicare considerations, however. The Medicare program considers people born on the 1st day of a month to be born one month prior. This means you are waiting period (should you meet these requirements) will only be six months instead of seven. Sometimes, however, the Medicare Initial Enrollment Period works the opposite way. If you were born in the middle of a June, for example, your Initial Enrollment Period would end on September 30th.
Regardless of the exact day you were born it is important to apply for Medicare as quickly as possible. The earlier you enroll, the earlier you likely are to receive your benefits. When Initial Enrollment Period options become available to you, be certain to take advantage of them immediately. Doing so within the initial three months of this enrollment period guarantees you can use your Medicare benefits the day you turn sixty-five.
Receiving free Medicare health insurance coverage is possible but you need to meet specific qualification requirements. Some enrollees receive both Medicare Part A and Medicare Part B coverage for free. Others must pay out-of-pocket for Medicare Part B coverage based on income levels and other qualifying factors. Private health insurance plans require you to pay a monthly or annual premium to receive your benefits. In addition to those premiums, you likely have to pay additional out-of-pocket costs for co-pays, co-insurance fees, prescription medications and more. Some Medicare enrollees qualify for free or almost completely free Medicare coverage, however.
This type of situation is typically applied to people in low-income situations or who have qualifying disabilities. If you qualify for several other governments sponsored benefits programs you might also qualify for free Medicare coverage. Premiums for Medicare Part A are typically waived for qualified applicants. Premium requirements for Medicare Part B are calculated based on prior tax records and current income (again, fixed or otherwise).
Medicare Advantage and Medicare part D premiums are also calculated based on the household income of each applicant and additional factors. If you do have to pay a premium for your Medicare plan, the total amount you pay is based on your income status. Medicare plans are also available for those who would not otherwise qualify. For example, Medicare plans might cost between $250 and $450 for individuals who choose Medicare coverage but do not meet qualification requirements to receive Plan A or more for free or reduced prices.