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Medicare Basics

What is Medicare?

Medicare is health insurance for people 65 or older or those younger with qualifying disabilities. You're first eligible to sign up for Medicare 3 months before you turn 65. You may be eligible to get Medicare earlier if you have a disability, End-Stage Renal Disease (ESRD), or ALS (also called Lou Gehrig's disease). With Original Medicare, you can choose any doctor or hospital that accepts Medicare.

Medicare and You Handbook 2024 is a great resource for all things Medicare.

What are the different parts of Medicare?

Original Medicare has two parts, Part A and Part B:

Part A (Hospital Insurance): Helps cover inpatient care you receive in a hospital, skilled nursing facility care, hospice care, and home health care.

Part B (Medical Insurance):
Helps cover:

Services provided by doctors and other health care providers
Outpatient care
Home health care
Durable medical equipment (like wheelchairs, walkers, hospital beds, and other equipment)
Many preventive services (for example, screenings, yearly “Wellness” visits and vaccinations)

Part C (Medicare Advantage):
This coverage, offered by private insurance companies, combines Part A and Part B and may include Part D. Many times, some Part C plans may also cover additional benefits like dental or vision, or other benefits that are not covered under Original Medicare. Often, these plans offer a cap on your out-of-packet expenses for covered medical services. For the different types of plans most carriers offer click here.

Part D (Prescription Drug Coverage):
This is the prescription drug benefit. You must be entitled to Medicare Part A or enrolled in Part B to enroll in a Part D plan.

Medicare Supplement Plan (Medigap):
Original Medicare pays only about 80% of your medical costs. A Medicare Supplement Insurance Plan may help pay the remaining 20% of services that Medicare approves. For more information on the different Medigap plans click here. A Medicare Supplement plan is not the same as a Medicare Advantage plan and can only be added to Original Medicare.

When can you enroll in Medicare?

During the Initial Coverage Enrollment Period (ICEP), you are eligible to enroll in Medicare 3 months prior to the month of your 65th birthday, your birthday month and the 3 months after. In some cases, you may be eligible to get Medicare earlier if you have a qualifying disability, End-Stage Renal Disease (ESRD) or ALS (also called Lou Gehrig’s disease). For resources on how to enroll in Medicare click here.

During the Medicare Annual Enrollment Period (AEP), you can change your Medicare coverage for the upcoming year. AEP starts every year on October 15th and ends on December 7th and allows you to enroll in a Medicare Advantage or Prescription Drug Plan. Any changes you make during AEP will be effective on January 1st of the upcoming year. You can take advantage of AEP to make changes to your coverage by enrolling, switching or un-enrolling from your current plan.

The Medicare Advantage Open Enrollment Period (MA OEP) takes place January 1st-March 31st. During this time, individuals enrolled in an MA plan may add or drop Part D coverage. Individuals enrolled in either MA-PD or MA-only plans can switch to: MA-PD, MA-only, or Original Medicare (with or without a stand-alone Part D plan). The effective date for an MA OEP election is the first of the month following receipt of the enrollment request.

Sometimes there are situations which may allow you to make a change outside of the above listed periods. This is called a Special Election Period. Often times this is due to moving to an area where your current plan is no longer offered, or your plan loses its contract with Medicare. click here to learn about situations that would qualify you for a Special Election Period.

Medicaid and Extra Help benefits

Medicaid is managed by the individual states and funded by both federal and state governments. Eligibility is mainly based on your income. Medicaid coverage differs from state to state, but is generally available to low income individuals and families, low income elderly, pregnant women, children and people with disabilities. You can find out more information about income and eligibility requirements in here.

Medicare also has a program called “Extra Help” to help pay for the costs of prescription drugs. If you are eligible for Medicaid, you automatically qualify for Extra Help. The income levels as individuals or couples varies from year to year, so you will need to check the requirements.

Note: This is intended as a summary and should not be relied upon to make medical decisions.

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