An Overview of Medicare

Millions of seniors in the United States rely on Medicare. Over 61 million individuals, as of late 2019, were enrolled in a Medicare health plan, and each year that number typically rises.

What Is Medicare?

Medicare is the U.S. federal health insurance program for individuals who are 65 years old or older. Individuals younger than this with specific disabilities, amyotrophic lateral sclerosis, or permanent kidney failure can also qualify for Medicare. Medicare helps with healthcare costs, but it will not cover all medical expenses or most long-term care costs.

Medicare Part A (Hospital Insurance)

Part A helps pay the costs of hospital inpatient care or limited time in a skilled nursing center after a hospital stay. It also will pay for some hospice and home health care.

Medicare Part B (Medical Insurance)

Part B helps pay for services from:

  • Healthcare providers
  • Doctors
  • Home health care
  • Outpatient care
  • Preventive services
  • Durable medical equipment

Medicare Part D (Prescription Drug Coverage)

This is an optional benefit. Everyone with Medicare can get Medicare drug coverage. Even if you are not currently using prescription drugs, you might want to consider joining Part D because joining later on after you are first eligible could lead to you having to pay a late enrollment penalty. You will end up having to pay this penalty for the entire time you have this drug coverage.

Medicare Part C (All-in-One Coverage)

This is currently called the Medicare Advantage Plan. It includes all the services and benefits covered under Parts A and B, prescription medications, and extra benefits like hearing, vision, and dental combined together in a single plan.

Getting Started

You have multiple options when you first get started with Medicare. You will have some critical decisions to make too. There are some steps to follow.

  1. Enroll in Medicare Through Social Security

    If you are not receiving Social Security benefits and are older than 65 years old or will be in the next three months, you will have to sign up for Medicare Parts A and B. You will not receive Medicare automatically.

    If you are already receiving Social Security benefits, you will receive Medicare Parts A and B automatically after you first become eligible. You will not have to sign up. You will receive a "Welcome to Medicare" packet from Medicare three months before turning 65 years old. You will still have additional actions to take and pressing deadlines, so be sure you read through all of the packet's materials.

    If you reside in Puerto Rico, you will only receive Medicare Part A. You will have to sign up for Medicare Part B.
  2. Select Your Coverage

    Individuals receive Medicare coverage in various ways. You will receive a lot of information that will help you choose your Medicare coverage, which is:
    • Your "Welcome to Medicare" packet that details your coverage options
    • An official "Medicare and You" handbook after you are enrolled and each fall every year
    • Mail from private insurance providers, brokers, and agents marketing their Medicare plans
  3. Complete the "Year One: Medicare Checklist"

    In your initial year with Medicare, you will want to follow this checklist to truly benefit from your Medicare coverage and ensure you are prepared in case of emergencies.

Benefits of Medicare

There are several benefits of Medicare, including:

  • Medicare offers people coverage who would not already have coverage. Because of the Medicare program, millions of older adults receive coverage when they would not have otherwise been able to afford it.

    Approximately nine million older adults were not receiving health coverage before Medicare was created in 1965. That number is substantially higher than the 508,000 uninsured seniors in 2018. Younger Americans with disabilities can also receive Medicare coverage who others wouldn't have healthcare.

  • Prescription innovations have resulted from Medicare. The founding of Medicare generated a huge market for drug companies. Over 39 million people in the U.S. suddenly had access to prescriptions they otherwise would not have had.
  • Medicare comes with a small monthly fee. Generally, individuals enrolling in Medicare qualify for free Part A, but they have to pay a small amount each month out-of-pocket for Part B.

Takeaway

As you can see, there are numerous benefits to enrolling in Medicare. Think about what the implications could be of not having Medicare. Older adults would find themselves having to pay unreasonably high medical costs right out of their own pockets. And it is during our later years when we require the most care. The total they would pay each year would likely exceed their annual income. Those with disabilities would be depending on caregivers who might not be able to afford their healthcare.

Medicare is helpful because it provides coverage to many individuals. When you enroll in a Medicare plan, you will want to understand the benefits offer and what's available.