Medicare Insurance Simplified.
Medicare is a federal health insurance program for people 65 years old and older, and people of all ages with a qualifying disability, such as Lou Gehrig’s Disease (ALS) or End-Stage Renal Disease (ESRD). The Initial Enrollment Period is from 3 months before you turn 65 until 3 months after. A late enrollment penalty may apply to those who join late. In some cases the penalty may go up 10% for every year, or even 1% for every month in which you could have had coverage, but didn’t!
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Those who are enrolled in Medicare Part A and Part B, otherwise known as “Original” Medicare, can go to any hospital or provider in the U.S. who accepts Medicare.
Medicare Part A: Hospital [Inpatient] insurance
Part A covers:
• Hospital stay
• Skilled Nursing Care in a Skilled Nursing Facility
• Home Health Services
• Hospice Care
Medicare Part B: Medical [Outpatient] insurance
Part B covers:
• Medical Services & Supplies
• Mental Health Care
• Preventative Care & Services
• Durable Medical Equipment
If you are eligible for Part A, you are eligible for Part B; if you are not eligible for Part A, you may still qualify for Part B.
Medicare Part A and Part B do NOT cover cosmetic surgery, dental care, dentures, eye exams for glasses, hearing aids (or exams for fitting hearing aids), long-term care, nursing home care (if custodial care is the only care you need), or prescription drugs.
There is NO annual limit on Medicare Part A or Part B out-of-pocket costs.
Those who wish to receive Medicare Part A and Part B benefits through a private insurance company instead of through Medicare can enroll in Medicare Advantage during certain enrollment periods. (See “Medicare Enrollment Periods” below.) In addition to covering all of your Medicare Part A and B benefits, these plans generally include extra benefits, including dental, hearing, vision, Medicare prescription drug coverage, and other health and wellness services. (Not all types of plans are available in all areas.) There are six types of Medicare Advantage plans: Health Maintenance Organization (HMO): In most HMO plans, you can only go to doctors, other health care providers, or hospitals that are in the plan’s network. You may need a referral from your primary care doctor to visit other doctors or specialists, or to have medically necessary tests. HMO Point-Of-Service (HMO-POS): This type of HMO plan allows you to get some services out-of-network, usually for a higher copayment or coinsurance. Medical Savings Account (MSA): MSA plans have a very high annual deductible; it varies by company and plan. Medicare will deposit money into a special type of savings account to help you pay for your health care costs until you’ve met the deductible. Preferred Provider Organization (PPO): In a PPO plan, you can go to doctors, hospitals, and other health care providers outside of the plan’s network, generally for a higher cost. Private Fee-For-Service (PFFS): Each PFFS plan specifies how much the doctors, other health care providers, and hospitals will get paid, and what you must pay for out-of-pocket. You can generally go to any doctor or other health care provider or hospital who will accept the plan’s payment terms. Special Needs Plan (SNP): These plans provide benefits, services, provider choices, and drug formularies that are tailored to meet the needs of people with specific diseases, certain health care needs, or limited incomes. Stand-alone prescription drug plans are available through private companies. These plans may help you lower your prescription drug costs. Important: If your Medicare Advantage plan includes prescription drug coverage and you join a Medicare Prescription Drug Plan you will be disenrolled from Medicare Advantage and placed back in Original Medicare.
Medigap plans supplement your Original Medicare benefits to help you fill some of the gaps in coverage, such as your Part A and Part B deductibles, copayments, and coinsurance. These plans are standardized by the state and federal government to protect you. They must all offer the same basic benefits, but some policies offer additional benefits. Prices can vary widely by company. NOTE: Some states offer a Medigap SELECT policy, in which participants can save money by receiving benefits through a network of providers. (Like an HMO.) IMPORTANT NOTE: If you already have a Medicare Advantage Plan (Part C), you can ONLY purchase a Medigap policy if you disenroll from Medicare Advantage Plan and return to Original Medicare.
Medicare Initial Enrollment Period (IEP)
The 7-month period in which you are eligible to enroll in Medicare Part A (Hospital Insurance) and/or Medicare Part B (Medical insurance) begins three months prior to your 65th birthday, includes your birth month, and extends until three months after you turn 65. Prescription drug coverage is not included in this Original Medicare program.
If you do not have “creditable” prescription drug coverage through an employer plan, union, or other providers whose coverage is equivalent to or better than a Medicare Part D Prescription Drug plan, you can purchase a Part D plan through a private insurer. You can also choose to receive your Medicare Part A and Part B benefits through a Medicare Advantage Plan (Part C) that is purchased through a private insurer. Some Medicare Advantage plans include prescription drug coverage, as well as some other benefits, such as dental, vision, and hearing coverage. Medicare Prescription Drug Plans and Medicare Advantage Plan benefits vary by plan.
You may be charged a Part B or Part D Late Enrollment Penalty if you do not sign up for these during your Initial Enrollment period and choose to enroll in them later.
Medicare Annual Enrollment Period (AEP): October 15 – December 7
During this time, all people with Medicare can change their Medicare health plans and prescription drug coverage for the following year. You may:
• Change from Original Medicare to a Medicare Advantage plan
• Change from a Medicare Advantage plan back to Original Medicare
• Switch from a Medicare Advantage plan to another Medicare Advantage Plan
• Switch from a Medicare Advantage plan that does not offer prescription drug coverage to a Medicare Advantage plan that offers prescription drug coverage
• Switch from a Medicare Advantage plan that offers prescription drug coverage to a Medicare Advantage plan that does not offer prescription drug coverage
• Join a Medicare Prescription Drug plan
• Drop your Medicare Prescription Drug coverage
• Switch from a Medicare Prescription Drug plan to another Medicare Prescription Drug plan.
Medicare Advantage Open Enrollment Period (MA OEP): January 1 – March 31
During this time, those who are enrolled in a Medicare Advantage plan can make a one time “like plan” change to a different Medicare Advantage plan or go back to Original Medicare.
Medicare General Enrollment Period (GEP): January 1 – March 31
Those who did not sign up for Medicare Part A or Medicare Part B during their Initial Enrollment Period (IEP) can sign up for it during this General Enrollment Period. Coverage begins on the first day of the month after you sign up.
Special Enrollment Periods (SEPs)
If you did not sign up for Medicare during the Initial Enrollment Period – or if you’ve recently moved out of your plan’s coverage area, lost insurance coverage through an employer plan, have a severe or disabling condition, qualify for Extra Help, or numerous other “special” circumstances – you may qualify for a Special Enrollment Period. This would allow you to make a change in your Medicare coverage. Rules about when you can make a change, and the type of changes you can make, are different for each Special Enrollment Period.
See: Financial Aid