Understanding Medicare

Since 1965, the Medicare insurance program has helped cover healthcare costs for millions in the U.S. In fact, Medicare now provides coverage to over 60 million Americans, the majority of them over age 65. And although approximately 18% of the U.S. population receives Medicare benefits, many people don’t feel as though they have a strong grasp on what the program is, what it provides and who is eligible to receive it.

For many people, enrollment doesn’t happen automatically, and missing certain deadlines can have a lifelong effect on what you pay for care. As you approach retirement, it’s important to educate yourself about how Medicare works, and how and when to enroll.

Enrollment

You’ll become automatically eligible for Medicare the day you turn 65, but most people will still have to apply have to make sure they get coverage. People who are already receiving Social Security benefits before they turn 65 will be automatically enrolled in Medicare Part A and B. Everyone else must enroll online.

It’s important to plan ahead, because there are limited windows in which you can apply for Medicare. Most people take advantage of the program’s initial enrollment period. That period spans about six months, beginning three months before the month you turn 65 and ending three months after you turn 65. It’s smart to apply for Medicare before you turn 65, as the enrollment process can take a few months to complete.

If you don’t sign up during the initial enrollment period, you may face late-enrollment penalties, higher premiums, and gaps in your coverage.

Medicare Premiums

Contrary to what some people expect, Medicare won’t cover all your healthcare costs. You’ll still have premiums and copays, just as you would for private healthcare coverage. There are exceptions: Medicare’s low-income program, Extra Help, covers a significant portion of prescription drug costs for people who qualify, while some states offer Medicare Savings Programs to help low-income people cover deductibles, premiums, and copays.

Medicare Parts A-D

The Medicare program is divided into several parts, which provide different kinds of coverage for different costs (or, in some cases, for no cost at all). Plans can differ in terms of cost, quality, and coverage. To get full coverage, most people opt to enroll in Medicare Parts A, B, D, and Medigap coverage – or sign up for Medicare Part C, also known as Medicare Advantage, which is administered by private insurance companies. Before you make a choice, consider your current healthcare situation, your expected future needs, your financial situation, and any other relevant information.

Medigap Insurance

Medigap insurance, which is also known as Medicare supplemental insurance, exists to help fill in some holes in the Medicare program. Medigap insurance is purchased separately from Medicare, and it’s offered by private insurance companies.

In summary, Medicare coverage varies based on where you live. Contact your healthcare provider to find out whether a specific service is covered.

 

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