Medicare Basics: What You Need to Know

Medicare is a federal health insurance program. It was created to provide access to affordable medical insurance coverage. Payroll tax deductions, general tax revenues, and enrollee premiums all fund Medicare.

ELIGIBILITY

Eligibility begins at age 65 unless you have end-stage renal disease, or certain disabilities (as defined by the Social Security Administration).

Almost everyone 65 and older who has worked 10 years (or has a spouse who has) is eligible for Part A (Hospital Insurance) and Part B (Medical Expense).

ENROLLMENT

General enrollment runs January 1 through March 31 of any given year. A person’s initial enrollment period is three months before, through three months after, the birth month.

COVERAGE

There are many aspects of Medicare so it can get confusing. Because Medicare will represent the majority of a retiree’s health coverage, it is critical to cover the correct ailments. In general, if you want Part A and Part B coverage, then you will decide between Original Medicare or Medicare Advantage (Part C). There is also Medicare Supplemental (aka Medigap) and Part D for prescription drug coverage.

Coverage is elective, and the 2019 monthly premium average is about $135.50. Payment comes out of enrollees’ Social Security benefits (if they are being paid). Signing up during the initial eligibility window is beneficial. The premium can increase 10% for each full 12-month period someone could have enrolled, but didn’t. The 2019 plan carries an annual deductible of $185.

Medicare is always the secondary payor to employer-sponsored coverage.

PART A: HOSPITAL INSURANCE

Includes fundamental benefits for:
Inpatient hospital care
Skilled nursing facility care
Home health care
Hospice care
Psychiatric hospital care

Most enrollees incur no monthly premium.

PART B: MEDICAL EXPENSE

Includes medically necessary:
Doctor’s services
Outpatient care
Home health services
Durable medical equipment
Certain preventative services
Other medical services

PART D: PRESCRIPTION

During open enrollment (Oct 15 – Dec 7), those eligible may sign up for, or switch, Medicare drug plans if necessary. There’s a 2019 annual deductible of $415.

CONCLUSION

Medicare is detailed. A discussion with a professional can help one make the right, personal choice. Other valuable resources include The Department of Aging, Social Security, and Medicare.gov.