Medicare Basics

Medicare is a health insurance program for people age 65 and older, some people with disabilities who are under the age of 65, and people with end-stage renal disease. Medicare can be complicated and you need to know what each part is for. Part A covers hospitalization, Part B covers medical expenses, Part C is a combination of Part A and B and is the part used by private insurance companies, and Part D is the prescription drug plan.

Generally, a person is eligible for Medicare if they or their spouse worked for at least 10 years in Medicare covered employment and are 65 years of age or older. The person must also be a citizen or a permanent resident of the United States. A person might also be eligible is they have a disability or have end-stage renal disease.

You can enroll in Medicare at your local Social Security office. It is recommended you enroll 3 months before your 65th birthday. If you sign up for Social Security benefits, you will be enrolled in Medicare Parts A and B at the same time. Since you have to pay for Part B, you will have the option of turning it down.

Medicare enrollment period rules are very strict so you should sign up for Medicare even if you do not plan to sign up for Social Security benefits.

Medicare Part A covers hospitalization.

There are no premiums for Part A if you are age 65 or older and receive or are eligible for retirement benefits from Social Security or the Railroad Retirement Board. You also do not have to pay premiums if you or your spouse had Medicare-covered government employment.

If you are under age 65, you will not have to pay premiums if you received Social Security or Railroad Board disability benefits for 24 months or you have end-stage renal disease and meet certain requirements.

Medicare Part B covers medical expenses. You are not required to sign up for Part B when you become eligible but might be charged a penalty when you later decide to sign up.

Beginning January 1, 2007, the premium for Part B is based on your income. Most people will pay the standard monthly premium. These premiums are subject to increase.

Medicare Part C is the Medicare Advantage Plan like HMOs and PPOs. This option combines your Part A and Part B. Private insurance companies approved by Medicare provide this coverage. Your costs will be determined by the insurance provider.

Part D is the prescription drug coverage portion of Medicare. You pay a premium for this coverage in addition to the Part B premiums. If you chose the Medicare Advantage Plan, Part D might be included. You should contact your provider to be sure whether or not this is covered.

Medigap insurance is supplemental insurance for your Medicare coverage. This is private coverage to fill in the gaps in the Part A and Part B coverage. Costs vary by policy and insurance company.