Medicare Coverage Information

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Understand Medicare and Your Options

Whether you’re new to Medicare – turning 65 or just retiring – or thinking about changing your current Medicare coverage, it’s important to understand your options so that you’ll select the right coverage for your health and financial needs.

What is Medicare?

Medicare, often called Original Medicare, is a federal health insurance program run by the Centers for Medicare & Medicaid Services (CMS) as part of the U.S. Department of Health and Human Services (HHS). In simple terms, it’s hospital insurance and medical insurance provided by the government.

Part A

Hospital Insurance

  • Hospital care
  • Nursing care
  • Home health care
Part B

Medical Insurance

  • Physician services
  • Outpatient services
Part C

Medicare Advantage

  • Combines Part A and B
  • Valuable extras like vision, dental, fitness and more
Part D

Prescription Coverage

  • Prescription drugs

Who is eligible for Medicare?

If you’re a U.S. citizen or a legal resident who has lived in the U.S for at least 5 consecutive years and meet any of the following qualifications, you may be eligible to enroll in Medicare:

  • Individuals 65 and older
  • Individuals under 65 with certain disabilities
  • Individuals with End-Stage Renal Disease (ESRD) or ALS (amyotrophic lateral sclerosis), also called Lou Gehrig’s disease

Specific eligibility rules apply in different situations. Visit CMS.gov for details or walk through the steps to get started at Medicare.gov.

How to Apply for Medicare

Man and woman looking at phone

For those who are turning 65, there is a seven-month Initial Enrollment Period (IEP), starting three months before your 65th birthday month and three months after your birthday month, when you first become eligible to enroll in Medicare. It’s important to enroll in Medicare when you’re eligible to begin taking advantage of the benefits that you’ve earned and avoid late enrollment penalties or gaps in coverage.

If you have coverage through an employer plan (yours or your working spouse’s), you’ll still have Medicare decisions to make when you turn 65. Your Initial Enrollment Period (IEP) occurs when you turn 65 whether you continue to work or not. Depending on the employer coverage you have, you may be able to delay enrolling in Medicare without penalty if:

  • Your employer has 20 or more employees
  • Your employer-provided health insurance is considered “creditable” (your employer’s benefits administrator can confirm this)
  • Your employer doesn't require covered spouses to enroll in Medicare at age 65 in order for you to remain on the employer’s plan

Once your IEP expires, your next opportunity to sign up for Medicare Part A and B is during Medicare’s General Enrollment Period (GEP) from Jan. 1 - Mar. 31. No matter when you enroll during GEP, your coverage start date will be July 1.

The fall Annual Enrollment Period (AEP) occurs every year from October 15 to December 7. During this time, if you are already enrolled in Medicare Parts A and B you can make these changes to the way you receive your Medicare benefits:

  1. Change from Original Medicare to a Medicare Advantage plan.
  2. Switch from one Medicare Advantage plan to another Medicare Advantage plan*.
  3. Change from a Medicare Advantage plan back to Original Medicare.
  4. Join, drop, or switch to a Medicare Part D (prescription drug) plan.

*With or without prescription drug coverage

Select the Right Medicare Coverage for Your Needs

Things to consider when selecting Medicare coverage include:

  • Your budget
  • Your specific health needs
  • Whether you travel often and may need flexibility of coverage outside of a local network
  • Your prescription drug needs

With Original Medicare, you can visit any doctor or hospital in the U.S. that accepts Medicare. After meeting your annual deductible, you usually pay 20% of the Medicare-approved amount. There’s no annual limit on out-of-pocket costs unless you have other private coverage as well, and it doesn’t cover all the costs of hospital, health care services, or supplies – just a portion. These costs can add up.

What does coverage cost?

Medicare Part A: You will not have to pay a monthly premium if you’ve earned your 40 work credits – meaning you’ve paid at least 10 years’ worth of Medicare taxes.

Medicare Part B: There is always a monthly premium.

  • In 2024, most Medicare members will pay a monthly premium of $174.70.
  • Your Part B premium could be higher depending on your income.
  • If you don't enroll in Medicare Part B as soon as you’re eligible, you could be assessed a late enrollment penalty when you do enroll.
  • The penalty could be as high as a 10% increase in your premium for each 12-month period that you were eligible but not enrolled.

Once you’re enrolled in Medicare Parts A and B, you’ll have Original Medicare coverage. You can enroll in a private Medicare plan option if you want additional coverage to help cover the gaps. Private coverage options include Medicare Advantage and Medigap plans. If you want prescription drug coverage, you can enroll in Part D and will pay a separate monthly premium.

Medicare Advantage (MA) plans are required to provide the same benefits as Original Medicare Parts A and B – and they cover gaps in Original Medicare.

Most MA plans offer valuable extras like:

  • Dental
  • Vision
  • Hearing care
  • Fitness Over-the-counter allowances
  • Other benefits that promote health and wellness

Medicare Advantage plans provide comprehensive benefits in one policy, with most plans offering Part D prescription drug coverage (MAPD plans). You will still pay your Medicare Part B premium.

Many Medicare Advantage plans have $0 monthly premium, $0 copay and deductibles, and a lower annual maximum out-of-pocket spending cap than with Original Medicare.

Medicare Prescription Drug plans (PDP) help pay for prescription drugs. If you don’t enroll in Part D when eligible, and you don’t have creditable prescription drug coverage or get Extra Help, you’ll likely pay a late enrollment fee if you join a plan later. Part D may be offered as part of a Medicare Advantage Plan (MAPD), or you can enroll in a stand-alone PDP if you have Original Medicare or Medigap.

Medicare Supplement Plans, also known as Medigap, are sold by private companies to cover the gaps in Original Medicare coverage and help pay for some of the remaining health care costs for covered services and supplies like copayments, coinsurance and deductibles. There are 10 standardized Medigap plans to choose from, all with varying levels of coverage, represented by different letters identified in most states as plans A - D, F, G, and K-N.

You must have Medicare parts A and B to add a Medigap plan. You will still pay your Medicare Part B premium, plus a monthly premium for the Medigap insurance. A separate Part D plan needs to be purchased if you want prescription drug coverage, which then requires a separate monthly premium as well.

Couple On Boat

You’re eligible for Medicare. Now what?

Deciding when and how to start Medicare coverage or start drawing Social Security depends on your unique situation. To help you on your journey, take a look at this example of a couple walking through their decisions, then consider speaking to a licensed, independent insurance agent about your questions and your next steps.

Explore Medicare Eligibility
Register for a Medicare Class

3 Important Steps for Medicare Enrollment

1. Get ready

  • If you’re new to Medicare, you can confirm your Medicare eligibility and request your Medicare card by calling Social Security at 1-800-772-1213 or 1-800-325-0778 (TTY).
  • To enroll in Medicare Parts A & B, you can sign up online, by phone, or in person at your local Social Security office. (Remember, if you’re turning 65, enroll before your IEP ends).
  • If you plan to enroll in or switch Part D prescription drug coverage, make a list of your prescription drugs so you can research different plans’ formularies (listing of covered drugs) and costs. Costs will vary across plans.

2. Do your research

  • Decide on the type of coverage you’ll want based on your lifestyle, health and financial needs.
  • You can attend a seminar, meet with a broker or speak directly with a health plan.
  • If you want to enroll in a Medicare Advantage plan, and you’re enrolled in Parts A and B, research the plan carriers in your zip code and the benefits they offer.

3. Enroll

  • You can enroll through a broker, directly through a Medicare health plan, or online at Medicare.gov.
  • If you plan to enroll when you turn 65, remember to enroll before your Initial Enrollment Period ends to avoid penalties and begin coverage early.