What Is Medicare?

Title XVIII of the Social Security Act (Medicare) was implemented in 1966 to provide health insurance coverage to all Americans over the age of 65. Eventually, the program was expanded to include people that are legally blind, suffer from End-Stage Renal Disease, or are disabled and collecting Social Security Disability Benefits. Medicare has four parts:

1. Part A (Hospitalization)
2. Part B (Medical),
3. Part C (Medicare Advantage Plans)
4. Part D (Stand-Alone Medicare Prescription Drug Plans)

Medicare Part A
Medicare Part A helps pay for inpatient hospital care and subsequent skilled nursing care as well as some home health care and hospice care.

Most people age 65 or older who are citizens or permanent residents of the United States are eligible for Medicare Part A at no charge. To be eligible, one of the following circumstances must be met:

• You are receiving or are eligible to receive Social Security benefits; or
• You are receiving or are eligible to receive railroad retirement benefits; or
• You or your spouse, living or deceased (including divorced spouses), worked long enough in a government job where Medicare taxes were paid; or
• You are the dependent parent of someone who worked long enough in a government job where Medicare taxes were paid.

Anyone not meeting one of these circumstances might still be eligible for Medicare Part A by paying a monthly premium.

Medicare Part B
Medical Part B helps pay for medical services and supplies provided by a physician that are not covered by Medicare Part A. Anyone that is eligible for Medicare Part A coverage at no charge is automatically eligible for Medicare Part B. However, everyone must pay a premium for Medicare Part B coverage. Monthly premiums for Part B are determined by income. People with higher incomes will pay a higher monthly premium while people with lower incomes will pay a lower premium.

Medicare Part C
Medicare Advantage Plans are available to anyone that is enrolled in both Medicare Part A and Medicare Part B. By choosing a Medicare Advantage Plan, Medicare recipients agree to receive all of their health care services through a provider organization. Most plans include prescription coverage in addition to medical coverage. It’s very important to remember that these types of plans do not replace Original Medicare, but pay instead of Original Medicare. Anyone that chooses a Medicare Advantage Plan can switch back to Original Medicare, but certain conditions must be met first.

Medicare Part D
A Medicare Prescription Drug Plan (PDP) can help pay for medications prescribed by physicians. Anyone who has Medicare Part A and Medicare Part B is eligible for a Medicare Prescription Drug Plan.

Medicare Supplement
Medicare Supplement plans, also known as Medigap plans, are designed to pay for health care costs not covered by Medicare. These plans are available to anyone that has both Medicare Part A and Medicare Part B. Twelve different Medicare Supplement options are available; Plan A through Plan L. While these plans are only sold by private insurance companies, they are standardized according to Federal and State laws. Because of this standardization, all like plans are the same regardless of the insurance company that it is purchased from.