Medicare is a federal government program that provides health insurance for people age 65 and older, people under age 65 with certain disabilities, and people with permanent kidney failure requiring dialysis or a kidney transplant. The Medicare program is made up of several "parts" that offer various benefits, including hospital insurance Part A), medical insurance for doctors' services (Part B), and prescription drug coverage (Part D).
The Medicare Support Center is the government’s online resource for frequently asked questions about the Medicare program. The following 20 questions are among the most popular:
1. Who Is Eligible for Medicare Benefits?
If you get benefits from Social Security or the Railroad Retirement Board, you are automatically eligible for Medicare starting the first day of the month you turn 65.
If you are under 65 you are eligible to receive Part A benefits under the following circumstances:
- You have been receiving Social Security Disability Insurance for more than two years.
- You have permanent kidney failure (end-stage renal disease requiring ongoing dialysis or a kidney transplant. You have been diagnosed with amyotrophic lateral sclerosis (Lou Gehrig’s disease).
2. What Does Medicare Part A Cover?
Medicare Part A, also known as the Hospital Insurance program, helps cover the costs of care in the following facilities:
- Inpatient care in hospitals
- Inpatient care in a skilled nursing facility
- Inpatient rehabilitation facility
- Hospice care services
- Some home health care services
- Inpatient mental health and psychiatric care
If you are eligible for Medicare you will not have to pay a monthly premium for Part A if you or your spouse paid Medicare payroll taxes while working.
3. Do I Have to Pay a Premium for Medicare Part A?
If you are eligible for Medicare you will not have to pay a monthly premium for Part A if you or your spouse paid Medicare payroll taxes while working. If you and your spouse did not work or did not pay enough Medicare payroll taxes you may not be eligible for premium-free Part A. However, you may be able to purchase Part A by paying a monthly premium, which is up to $461 in 2010.
You should contact your local Social Security office 3 months before your 65th birthday to sign up.
4. What Does Medicare Part B Cover?
Medicare Part B is also known as the Medical Insurance program. In general, Part B covers two types of services:
- Medical services – healthcare that you may need to diagnose and treat a medical condition. Medicare will only pay for services that they define as being medically necessary.
- Preventive services – healthcare to prevent illness (such as a flu shot) or help detect an illness in an early stage so it can be managed before getting worse (such as screening for colon cancer).
Under Part B, Medicare helps pay for durable medical equipment such as oxygen equipment, wheelchairs, walkers, and other medically necessary equipment that your doctor prescribes to use in your home.
5. What Is the Medicare Part D Coverage Gap?
Most Medicare drug plans have a coverage gap, also known as the “doughnut hole.” This means that after you and your drug plan have spent a certain amount of money for covered medications, you have to pay all out-of-pocket costs for your drugs (up to a limit). Your yearly deductible, your co-insurance or copayments, and what you pay in the coverage gap all count toward this limit.
6. What Is a Medigap Policy?
Original Medicare (Part A and Part B) pays for many, but not all, health-related services and medical supplies. You can purchase an insurance policy to cover the “gaps” that are not paid for by Medicare, such as copayments, coinsurance, and deductibles - which can add up to a lot of out-of-pocket expenses.
Some Medigap policies also will pay for certain health services outside the United States and additional preventive services not covered by Medicare. Medigap insurance (also known as Medicare Supplement Insurance) is voluntary and you are responsible for the monthly or quarterly premium. Medicare will not pay any of your costs to purchase a Medigap policy.
7. What Is a Medicare Advantage Plan?
Medicare Part C, also known as the Medicare Advantage program, allows you to choose a health plan offered by a private insurance company that is approved by Medicare. Medicare Advantage plans include:
- Managed Care Organizations (such as a PPO or HMO)
- Private Fee-for-Service Plans
Medicare Advantage plans receive payments from Medicare to provide you with the benefits covered by Medicare, including Part A and Part B. Most Medicare Advantage plans include Part D drug coverage and many offer extra coverage, such as vision and hearing care, dental services, and wellness programs.
8. What Happens to Medicare Under Health Reform?
The Affordable Care Act makes several changes to Medicare that most likely will improve your benefits and your access to primary care services. Some significant changes include:
- Coverage Gap Savings: If you reach the coverage gap in 2010 you will receive a one-time rebate check of $250 from Medicare. In 2011, you will be able to get a 50% discount on brand-name drugs and a 7% discount on generic drugs in the coverage gap. There will be additional savings in the coverage gap each year until it's completely closed by 2020.
- Preventive Care: Beginning in 2011, Medicare will pay for an annual checkup, including a physical examination and a total elimination of cost sharing for appropriate preventive services and screenings.
9. I Will Soon Be 65, What Are My Medicare Choices?
You have two main choices for how you get your Medicare – Original Medicare or a Medicare Advantage Plan. If you choose Original Medicare (which includes Part A Hospital Insurance and Part B Medical Insurance), you will also have the option to enroll in a Part D Prescription Plan. You will also need to decide if you want to purchase Medicare Supplement Insurance (Medigap) to pay for the “gaps” in Medicare coverage.
If you choose a Medicare Advantage Plan, you will have the option to select a plan that includes prescription drug coverage. If you have a Medicare Advantage Plan, you do not need Medigap coverage.
10. What Does "Medically Necessary" Mean?
Medicare will only pay for services that are considered to be medically necessary. According to Medicare, services or supplies are considered medically necessary if they:
- Are proper and needed for diagnosis, or treatment of your medical condition.
- Are provided for the diagnosis, direct care, and treatment of your medical condition.
- Meet the standards of good medical practice in the medical community of your local area.
- Are not mainly for the convenience of you or your doctor.