Most Americans spend the majority of their lives receiving their health insurance through their place of employment. It’s no surprise then that as people approach 65, they have a lot of questions about Medicare. It’s a completely foreign concept! So what is Medicare and how does it work?

Medicare is a federally funded health insurance program in the United States. It provides coverage for people aged 65 and older, people with certain disabilities, and people with end-stage renal disease (ESRD).

Medicare is now divided into several parts:

  1. Part A: Hospital insurance. This covers inpatient care in hospitals, hospice care, skilled nursing facility care, and home health care.
  2. Part B: Medical insurance. This covers doctor’s visits, outpatient care, preventive services, and medical equipment.
  3. Part C: Medicare Advantage plans. These plans are offered by private insurance companies and provide coverage for all Medicare services, plus additional benefits like vision, dental, and hearing. Note: Medicare Supplement plans
  4. Part D: Prescription drug coverage. This covers the cost of prescription drugs.

Medicare works by paying healthcare providers directly for the services they provide to Medicare beneficiaries. Most beneficiaries pay a monthly premium for Part B coverage, and some may also pay a premium for Part D coverage. Medicare also has deductibles, coinsurance, and copayments that beneficiaries are responsible for paying.

Overall, Medicare helps millions of Americans access affordable healthcare services, allowing them to maintain their health and well-being as they age or manage their health conditions.

Some of the most common questions we hear about Medicare are:

  1. What is the difference between Medicare Part A and Part B? Medicare Part A is hospital insurance that covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care. Medicare Part B is medical insurance that covers doctor visits, outpatient care, preventive services, and medical equipment. Parts A and B together are sometimes referred to as Original Medicare.
  2. When should I enroll in Medicare? Most people become eligible for Medicare when they turn 65. If you are still working, you may elect to continue your creditable coverage through your employer or your spouses employer. Otherwise, it is typically recommended that you enroll in Medicare during your Initial Enrollment Period (IEP), which is a 7-month window that starts three months before your 65th birthday and ends three months after your birthday month. If you delay enrollment, you may face a late enrollment penalty.
  3. How much does Medicare cost? Medicare Part A is usually free for most people, as long as you or your spouse have worked and paid Medicare taxes for at least 10 years. Medicare Part B has a monthly premium, which is based on your income. Many Medicare Part C plans come with a monthly premium amount, but many carriers offer $0 premium plans. Medicare Part D has a monthly premium, which also varies depending on the plan you choose.
  4. What is a Medicare Advantage plan? A Medicare Advantage plan, also known as Medicare Part C, is a type of health plan offered by private insurance companies. These plans provide all of the benefits of Medicare Part A and Part B, as well as additional benefits like vision, dental, and hearing coverage. Some Medicare Advantage plans also include prescription drug coverage. Learn more about Medicare Advantage plans and how they differ from Original Medicare.
  5. Does Medicare cover all of my healthcare costs? No, Medicare does not cover all healthcare costs. There are deductibles, copayments, and coinsurance amounts that beneficiaries are responsible for paying. There are options you can purchase to help significantly limit your out of pocket costs. For example, if you purchase a Medicare Supplement Plan G, your out of pocket costs are limited to the Part B Deductible (the amount of which changes annually, but currently $226 for 2023). Carriers may also offer separate coverage for dental and vision to help provide coverage for these costs as well. Learn more about Medicare Supplement plans and how they work with Original Medicare.

There are so many options out there when it comes to Medicare that which plan is right for you is heavily dependent on your circumstances. Want to learn more? Speak with one of our licensed agents about your situation and get advice that comes at no cost to you. Call 888-970-2940 today for your no cost consultation!

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