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What is Medicare: The Ultimate Guide

Sometimes all it takes is a doctor consultation or course of treatment to land a knockout punch to your retirement savings. Medicare, a government program, can be a fantastic choice for your health insurance in such cases. Read to know more.
What is Medicare The Ultimate Guide
What is Medicare: The Ultimate Guide
In this blog, we go deeply into Medicare, covering everything from its definition to the application process and eligibility standards. What is Medicare? Here's all you need to know.
In this article

Your body needs more care and attention as you grow old and cross retirement age. However, a medical consultation, course of treatment, or prescription drugs can be prohibitively expensive and risk your retirement savings. Medicare, a government program, can be a fantastic choice for your health insurance in such cases. In this blog, we go deeply into Medicare, covering everything from its definition to the application process and eligibility standards. What is Medicare? Here’s all you need to know.

What is Medicare

Medicare is a U.S. government health insurance coverage program primarily for people 65 years of age or older. It also provides coverage for young individuals with disabilities, people with end-stage renal disease (ESRD), and people with amyotrophic lateral sclerosis (ALS). 

Who Needs Medicare?

Medicare is essential for anyone who meets the eligibility criteria, as it provides significant health coverage that can be otherwise prohibitively expensive. Understanding who qualifies for Medicare and why it’s important can help you or your loved ones make informed healthcare decisions.

Understanding Eligibility Requirements

Medicare eligibility primarily hinges on age and residency. To qualify, you must be:

  • Aged 65 or older.
  • A U.S. citizen or a legal resident for at least five continuous years.

There are also provisions for individuals under 65 with specific disabilities or conditions. If you receive Social Security Disability Insurance (SSDI) for at least 24 months, you are eligible for Medicare. Additionally, those with ESRD or Amyotrophic Lateral Sclerosis (ALS) are eligible for Medicare regardless of age.

The Medicare Maze Solved: Demystifying Parts A, B, C & D

Medicare is divided into four Medicare parts (A, B, C, D), each serving different healthcare needs. Understanding these parts is crucial for making the most of your Medicare coverage.

Medicare Part A

Medicare Part A offers coverage for home health services, hospice care, skilled nursing facility care, inpatient hospital stays, and medicines and supplies. Physician services, medication, and grief counseling for family members are all covered for patients who are terminally ill. Those who paid Medicare taxes during their working years or whose spouses did so are exempt from paying Medicare Part A premiums after they turned 65. But if you didn’t pay this tax when you were employed, you’ll have to pay premiums, which can reach $505 a month. Part A is free of premiums for young people who receive long-term social disability benefits. Even if you qualify for premium-free coverage, you may still have out-of-pocket expenses for copayments and coinsurance.

Medicare Part B

Medicare Part B is medical insurance that covers outpatient care, doctor visits, preventive services, and some home health care. Unlike Part A, Part B requires a monthly premium, which varies based on income. Deductibles and coinsurance must also be considered. Part B is essential for covering routine healthcare services and preventive measures.

Medicare Part C

Medicare Part C, or Medicare Advantage, is an alternative to Original Medicare (Parts A and B). Private insurance companies approved by Medicare offers these plans. They include all benefits of Parts A and B and often offer additional benefits such as vision, dental, and hearing coverage. Some Medicare Advantage plans also include Part D (prescription drug coverage). Premiums and out-of-pocket costs vary depending on the plan chosen.

Medicare Part D

Medicare Part D provides prescription drug coverage. It’s available through private insurers approved by Medicare and can be added to Original Medicare (Parts A and B) or included in Medicare Advantage plans. Part D plans vary in cost and coverage, but they all help lower the cost of prescription medications.

Budgeting for Healthcare

Healthcare costs can be a significant part of your retirement budget. Understanding the costs associated with Medicare can help you plan better.

Exploring Costs of Medicare

Medicare costs include premiums, deductibles, copayments, and coinsurance. Here’s a brief overview:

Part A: Most people don’t pay a premium if they have 40 quarters of Medicare-covered employment. However, there is a deductible that you have to pay before your insurance covers your hospital bills. In 2024, the deductible is $1,632 for each benefit period. Based on your hospital stay, you must also be responsible for paying for coinsurance.

Part B: The standard premium is $174.70 per month in 2024. However, depending on your income, you may have to pay more. The premiums you pay for part B are based on your adjusted gross income reported on your tax return two years ago. So, the additional amount called the Income Related Monthly Adjustment Amount (IRMAA), may vary. Part B also has an annual deductible of $240. After meeting the deductible, you typically pay 20% of the Medicare-approved amount for most doctor services.

Part C: Many Medicare Advantage plans have a $0 premium plan. However, some may still charge a small amount. In 2024, the average premium is $18.50 per month. Costs vary by plan and may include premiums, deductibles, and copayments.

Part D: Monthly premiums vary by plan. Like Part B, your monthly premium is decided based on your income. In 2024, the average monthly premium for Part D is around $55.50, and the price for the drug plan ranges between $0 and $195.10 per month. Part D also has a deductible, which only applies to some Part D plans, and the maximum cost of deductibles is $545.

It’s crucial to compare plans annually during the open enrollment period to ensure you have the coverage that best meets your needs at an affordable price.

Read Related Article: Cheap health insurance in Kansas.

Medicare Vs. Medicaid

Medicare and Medicaid are often confused. They both are US government programs that help specific individuals cover the cost of health care. Still, they serve different populations and have distinct eligibility requirements.

Knowing the Key Differences

Medicare: A federal program primarily for people aged 65 and older, regardless of income. It also covers younger individuals with disabilities and specific conditions. Eligible members share the cost of health coverage through monthly premiums, copays, and deductibles.

Medicaid: Medicaid is a joint program between the federal and state governments. This program covers the cost of health insurance for individuals with very low incomes. An individual’s eligibility for Medicaid does not depend on age or disability. Eligible members generally have very low to no out-of-pocket expenses. Since it’s a joint program, eligibility and coverage may vary by state. 

Hassle-Free Enrollment

Medicare enrollment may seem daunting, but understanding the process can make it straightforward.

Your Step-by-Step Guide to Medicare

  • Determine Your Initial Enrollment Period (IEP): This seven-month period includes the three months before your 65th birthday, the month of your birthday, and the three months after.
  • Sign Up for Part A and Part B: You’ll be automatically enrolled if you’re already receiving Social Security benefits. 
  • Consider Additional Coverage: Decide if you want additional coverage through Medicare Advantage (Part C) or a Medigap policy to help with out-of-pocket costs.
  • Enroll in Part D: If you need prescription drug coverage, choose a Part D plan that fits your medication needs.
  • Review and Adjust Annually: Review your coverage and make any necessary changes during the annual open enrollment period (October 15 to December 7).

If you did not enroll in your initial enrollment period, then you may have to sign up yourself. There are three ways in which you can do so:

  • You can visit your local Social Security office.
  • You can give a call to Medicare at 800-772-1213, Monday through Friday between 7 a.m. and 7 p.m.
  • Visit the official website at https://www.ssa.gov/myaccount/ to create a Social Security account and apply online.

Debunking Common Medicare Myths

There are many misconceptions about Medicare. Clarifying these can help you make better decisions.

Facts Vs. Fiction

Myth #1: You’re Automatically Enrolled In Medicare.

Fact: You are automatically enrolled in Medicare only if you receive Social Security benefits. If you’re not receiving these benefits, you must contact Social Security to enroll during your Initial Enrollment Period, which is three months before to three months after your 65th birthday. Delaying enrollment can lead to penalties unless you have health insurance through an employer or Veterans Affairs (VA).

Myth #2: Medicare is free.

Fact: While Medicare Part A is typically premium-free for most people, Medicare Part B has a monthly premium deducted from your Social Security check. Additionally, you must pay for co-pays, deductibles, co-insurance, and prescription drug coverage costs.

Myth #3: You can only receive Medicare from the government.

Fact: Besides Original Medicare, there are private insurance options. Private companies offer Medicare Part C, which includes hospital and medical insurance. Medigap plans, also from private insurers, cover out-of-pocket costs not included in Original Medicare. Private insurers also offer Medicare Part D for prescription drug coverage.

Myth #4: You’re stuck with your Medicare plan once you choose it.

Fact: You can change your Medicare plan during the Annual Enrollment Period from October 15 to December 7. Special circumstances also allow you to switch plans outside of this period.

Myth #5: If your spouse has Medicare, you’re automatically enrolled.

Fact: Medicare provides individual coverage only. To enroll, you must meet eligibility criteria by age or disability. Even if your spouse has Medicare, you must enroll separately when eligible.

Myth #6: If you’re still working at 65, you don’t have to sign up for Medicare

Fact: You may delay Medicare Part B enrollment if you have comparable health insurance through an employer or VA benefits, depending on factors like the size of your employer or the creditability of the prescription drug coverage. Always consult with your employer’s benefits department before making a decision. If you delay, ensure you enroll once your employer coverage ends to avoid penalties and coverage gaps.

Read Related Article: Cheap health insurance in Iowa.

Conclusion

Medicare is a federal government-backed program designed to offer health care coverage for seniors and young individuals with certain conditions. The program offers vital health coverage to millions of Americans. By understanding the intricacies of Medicare coverage, from eligibility criteria to applying and understanding its different parts, you can make an informed decision about your healthcare.

Check out Beem, a marketplace where you can find various health insurance from top providers for all your needs. You can get everything you need in one place, whether searching for dental insurance, accident coverage, or short-term medical coverage. With Beem, finding the right health insurance is just a few clicks away.

FAQs

At what age am I eligible for Medicare?

You are eligible for Medicare at age 65. However, younger individuals may qualify if they have a qualifying disability, End-Stage Renal Disease (ESRD), or amyotrophic lateral sclerosis (ALS).

How do I qualify for Medicare?

You qualify for Medicare based on age (65 or older), disability status, or certain medical conditions. You must also be a U.S. citizen or a legal resident for at least five years.

Where do I sign up for Medicare?

You can sign up for Medicare through the Social Security Administration. You can do this online at the SSA website, by phone, or in person at your local Social Security office.

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Author

Picture of Raman Gujral

Raman Gujral

An achievement-oriented professional, Raman has 10+ years of experience in B2B SaaS and B2C products across Fintech, Telecom, Digital Media, Social Media and Logistics domains. Defining and communicating product vision and strategy, product roadmap development, product positioning, and data analysis, he is also an expert in health insurance and personal loans content.

Editor

This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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