• Medicare Basics

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    Medicare Basics

    Medicare* is the health insurance system for those age 65 and older and those on Medicare disability under age 65.

    There are 2 Parts to Original Medicare and 2 Additional Parts of Medicare.

    The 2 Parts of Original Medicare are:

    1. Part A (Hospitalization). This part of "Original Medicare" does not cost a monthly premium for any-one who has 
        worked 40 quarters in the United States (or whose spouse has worked 40 quarters). Part A generally covers 
        overnight hospitalizations in the United States, but also includes coverage for blood, very limited nursing home or
        rehabilitation coverage, and hospice care. There is a hospital admission deductible to Medicare ($1,216 in 2014) 
        and other daily hospital copays after 60 days of hospitalization.
    2. Part B (Outpatient Services). This part of "Original Medicare" costs a monthly premium. For most people this
        cost is around $100 per month, but some with higher incomes will pay more. Part B generally covers outpatient
        Medicare services provided when a person is not held overnight in a hospital or facility (for such services as
        routine doctor visits, outpatient surgeries or testing, and emergency room visits). There is an annual deductible
        for Medicare Part B (this is $147 for 2014). Once your annual deductible has been met, then Medicare Part B
        pays on 80% of Medicare approved amounts. Beneficiaries may also be responsible for excess charges up to
        15% over Medicare approved amounts. 

    Note: If this is your first time on Medicare Parts A & B, you have an Open Enrollment Period (starting 6 months before your Medicare Part B effective date and ending 6 months after your Medicare Part B effective date) which enables you to purchase a Medicare Supplement plan without answering any health questions. Since you cannot be turned down for Medicare Supplemental coverage during this Open Enrollment Period, most people wanting Medicare Supplemental coverage with Medicare enroll a month or more before their Medicare Part B effective date (to make sure they are covered as soon as their Medicare Part B starts).

    The 2 additional parts to Medicare are:

    1. Part D (Drugs). Since Original Medicare Parts A & B do not include prescription drug coverage, Part D is optional 
        prescription drug coverage. The plans are administered through private insurance companies once approved by
        CMS (Centers for Medicare Services). Although participation is optional to participate, penalties may apply if you
        do not maintain creditable coverage and enroll at a later wish to enroll in a Part D plan. Unless you have a special
        reason (a special election period), you can only change these plans once per year during the annual enrollment
    2. Part C (Medicare Advantage). Medicare Advantage is an alternative to "Original Medicare" Parts A & B,
        however you must be enrolled in Medicare Parts A & B to participate. With Medicare Advantage, private
        companies administer health benefits instead of Original Medicare. Plans are approved by CMS, and benefit
        plans are specific to individual counties. Prescription drug benefits are often included in these plans,
        eliminating the need for a stand alone Part D coverage. Not all doctors accept Medicare Advantage plans.
        While premiums may be low or "zero premium", these plans are not classified as Medicare Supplemental
        coverage. Participants may be responsible for separate co-pays, deductibles or co-insurance for services
        provided. Unless you have a special reason (a special election period), you can only change these plans
        once per year during the annual enrollment period. As of 2014, end stage renal disease could preclude
        you from being able to enroll in a new plan.

    Note: Open Enrollment for Medicare Advantage begins 3 months before you Medicare part B effective date and ends 3 months after the month of in which your Medicare Part B becomes effective.

    Note: If you drop your Medicare supplement coverage to enroll in a Medicare Advantage Plan and later wish to return to a Medicare Supplement, specific health conditions could preclude you from being able to qualify for new Medicare Supplement coverage.

    Note: If you have Original Medicare Parts A & B only, you may want to purchase a Medicare Supplemental policy to fill in the coverage deductibles and coinsurance amounts not covered by Original Medicare. If you want drug coverage, you will also need to get a separate Part D prescription drug program (see details below). 

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    *Please note that Future Benefits and their agents do not represent and are not endorsed by Medicare or CMS. This information is provided as a general overview and is not guaranteed accurate due to the changing laws and rules of Medicare. Please refer to Medicare.gov for additional information and current policies and procedures.

    See our Professional Disclaimer