What Is Medicare?

Medicare is the most common form of health care coverage for seniors. The program provides a way for older Americans to have their health needs taken care of after they retire from the workforce.

The Medicare program was originally founded in 1965. At that time, what is now known as Original Medicare was created. The first major expansion to the program came seven years later, when people with disabilities or end-stage renal disease became qualified for coverage.

Part C was originally established in 1997 and was first known as the Medicare+Choice program. It took on its modern form and was renamed as Medicare Advantage a few years later in 2003.  Part D took effect starting in 2006.

The Medicaid program was founded at the same time as Medicare as well. Medicaid was originally created to provide insurance to those who needed cash assistance but has been expanded beyond that since. The program is separate from Medicare and exists today to provide health care to low-income Americans.

The basics of Medicare include both plans that are provided by the federal government and ones that are available through private insurers. Different types of plans can cover different parts of your health care.

Medicare is divided into four parts, named alphabetically from Part A through Part D.

Parts A and B are sometimes referred to as Original Medicare. Parts C and D are newer options. Generally, you can get coverage through Original Medicare or through Medicare Advantage plans if you qualify.

Medicare Advantage plans require that you live in the service area of the plan you want to join.

Original Medicare is provided through the federal government. Americans are typically eligible to enroll in Original Medicare when they turn 65. It is divided into Parts A and B, which each handle different parts of your health care.

It’s important to remember that Original Medicare does not cover everything, with notable areas like vision and dental coverage excluded.

Medicare Part A is hospital insurance. It covers the costs of a hospital or nursing facility stay, but does not cover long-term care.

Part A does not cover the costs of treatments you receive while in the hospital. That falls under Part B.

Medicare Part B is medical insurance that covers doctor visits. It also covers the costs of what CMS calls medically necessary services and preventative services.

Medicare Part C is also called Medicare Advantage, a form of private insurance. Enrollment in Part C is voluntary.

These plans are sold through insurance firms that have contracted with the federal government. All Medicare Advantage plans must provide the same coverage as Medicare Part A and Part B, but other benefits vary from plan to plan.

Most Medicare Advantage plans also offer prescription drug coverage. Medicare Advantage plans may also bundle coverage beyond what Original Medicare plans cover and may include vision, hearing and dental coverage.

Medicare Advantage plans are provided regionally, so specific benefits and coverage available can vary based on where you live and the plans that are sold in your area.

Medicare Part D covers the cost of prescription drugs and is provided through private insurers. People who enroll in Part D pay a monthly premium. It covers the prescription drugs you buy at your local or mail-order pharmacy.

Most states have more than two dozen private insurers to choose from for Part D coverage. You can often receive prescription drug coverage through a Medicare Advantage plan, essentially combining Parts C and D.

You can also purchase a standalone drug plan to pair with Original Medicare. Different Part D plans come with their own formulary, and there may be some variety in what drugs they cover.

A Medicare Supplement plan, commonly known as Medigap, is an additional coverage option to Original Medicare.

Medicare Part A and Part B only covers 80 percent of services. Adding a Medigap plan covers the remaining 20 percent, eliminating coinsurance or copayments as well as some additional out-of-pocket costs.

These policies are sold by private insurance companies. If you have Medicare Advantage, you cannot pair your coverage with supplemental insurance. Medigap is only meant to help with Original Medicare.

When trying to find the best Medicare plan for you, it’s important to be aware of and compare all your options. Having a solid understanding of the differences between each type of plan can help you narrow down your choices.

When comparing plans, one of the first things you should determine is how much money you are willing or able to spend on your health care coverage. This can help you narrow down your initial options.

You also should make a list of certain conditions or services that are a must for you and should be included in your plan. If you have coverage needs that aren’t available under Original Medicare, it can play a key role in determining if Medicare Advantage is the best option for you.

You will also have to consider where you live if you decide to opt for Medicare Advantage. These plans are available regionally and can vary from city to city. You are likely to have more options if you live in a populated area.

Medicare Advantage plans and Part D plans also come with a star rating system based on what they provide and how well they do. Be sure to take star ratings into account when choosing between plans.

It’s also important to continuously compare plans each year during enrollment periods. Coverage and plans available near you can change year to year, opening new and potentially better coverage options.

Not everyone qualifies for Medicare Parts A and B. Still, others may be able to get it if they pay premiums.

If you or your spouse didn’t pay Medicare taxes while working but are a U.S. citizen or legal permanent resident and 65 or older, you may be eligible to buy Medicare Part A coverage.

You can also qualify for premium-free Medicare Part A if you are under 65 and require dialysis or are a kidney transplant patient. People younger than 65 diagnosed with Lou Gehrig’s disease (ALS) also qualify the first month after they receive disability benefits.

As far as signing up for Original Medicare if you are eligible, you’ll be automatically enrolled when you turn 65 if you are already receiving Social Security benefits.

You should sign up during your 65th birthday month or sometime in the three months before or after your birthday month. If you miss this window, you may face permanent financial penalties.

If you are new to Medicare, you have several periods when you can enroll or change your plan, even if you don’t know when you first become eligible.

There are costs and fees associated with Medicare. These include premiums, deductibles and coinsurance. You may also pay penalties for waiting to enroll in Medicare Part B.

Most people don’t have to pay a premium for Medicare Part A because they paid for it through years of payroll taxes while they worked.

Medicare premiums are updated annually and depend on a variety of factors. Economic and political factors have a high influence on Medicare changes.

As federal health care costs continue to rise, beneficiaries of Medicare will likely see out-of-pocket costs increase in 2022 and beyond.

Medicare Parts A and B do not cover everything. Medicare Advantage plans may offer extra benefits that Original Medicare does not cover.

The most expensive thing Medicare Parts A and B does not cover is long-term care. Medicaid, another federal health insurance, will sometimes cover these costs, but generally only for low-income Americans with little or no savings.

While Original Medicare does not cover everything, there are many services that are covered under Parts A and B. Each part will cover different types of services.

Part A can take care of most of your services that involve stays in facilities. But remember that Original Medicare does not cover long-term care or something like a permanent move to a nursing home.

Part B covers your everyday health care services, like check-ups and equipment.

Medicare Advantage plans can sometimes include coverage for these services that go beyond the scope of Original Medicare.

Original Medicare can cover a wide range of treatments for many different conditions or ailments. The guiding principle for much of Medicare’s coverage is that a treatment considered a medical necessity should be covered.

Whether something is medically necessary can sometimes be up for interpretation, but there are several areas that Parts A and B can be counted on to provide coverage for.

Parts A and B can cover many treatments for several conditions if care for them is shown to be medically necessary. Also keep in mind that Medicare rarely covers the entire cost of a treatment. You may still have to pay a significant amount out of pocket depending on the type of care you are receiving.

There are some situations where Original Medicare can cover the diagnosis of a condition, but not necessarily treatment for it. For example, you would be covered for a bone density test to determine if you have osteoporosis, but drugs to treat it would only be covered if you had a Part D plan as well.

There are several different ways to get in contact with Medicare Customer Service if you have questions about your plan or want to resolve an issue.

Medicare can be reached by phone at 1-800-MEDICARE (1-800-633-4227) at any time of day. You can also contact Medicare by sending a letter by mail or by emailing them. When calling, make sure you have your Medicare card ready and a way to take notes or record the information you get.

You can call Medicare to resolve several issues, from cost and billing information to coverage or medical record questions.