What is Medicare & How Does It Work

Medicare is a federal entitlement program that primarily provides healthcare to 65 or older. It also includes coverage for those with disabilities, end-stage renal disease, and amyotrophic lateral sclerosis (ALS). Though Medicare does not provide medical care or insurance coverage for the general population, it does have many vital functions in the U.S. healthcare system, such as providing information about costs and coverage choices for benefits under Part A and B of Medicare.


Parts Of Medicare


1. Part A

Part A, usually referred to as Hospital Insurance (HI), has a monthly premium paid by the enrollee with no deductible. Covers inpatient care in hospitals, including semiprivate rooms, food and tests by doctor’s orders. It also covers skilled nursing care after 30 days in a hospital. Part A also covers hospice if you have been approved for Medicare due to a terminal illness or are 65 or over. It covers 90% of the costs for medically necessary inpatient care (the prices are higher for skilled nursing facilities) and hospice care, whether the patient is admitted or not.

2. Part B

It is an optional insurance program that is individual-based and includes an annual deductible that the enrollee must pay before coverage begins. The range consists of doctor’s services and preventive care, outpatient care, home healthcare, durable medical equipment (DME), ambulance transportation and various other medical services.

3. Part C

It is a managed care program that provides benefits similar to those offered in Part A & B. It involves group contracts with private health insurance companies that offer insurance policies approved by Medicare. It is not a federal government program administered by the Centers for Medicare & Medicaid Services.

4. Part D

It is another optional insurance program that covers prescriptions for those who are or are about to become eligible for Medicare due to age or disability. It is also available for people under 65 but meets eligibility requirements such as financial hardship and disability.


Medicare Eligibility


1. Enrollment

To qualify for Medicare, you must be a U.S. citizen or a legal permanent resident as of 5/08, be age 65 or older, and have been receiving Social Security for at least one month before turning 65. You also must not have received Social Security benefits (or disability benefits) from another country’s government or the U.S. Veterans Administration or Railroad Retirement Board within the last 48 months before application.

2. Claims and Appeals

Claims may be filed at any time during the year, within a year from the date of service, or within three years, whichever is shorter. Medicare is prohibited by law from denying coverage to you due to pre-existing conditions. Once enrolled, you will receive your benefits quickly, but if you are denied coverage, you may appeal that decision within 60 days of the claim filing date. You are informed in writing as soon as an appeal decision has been made.


Enrolling in Medicare


1. Sign up

If you’re already receiving Social Security benefits, you can enroll for Part A and Part B (and Advantage plans if you’re eligible). You’ll need to fill out a form SSA-1088 and give it to the Social Security Administration office. They will then send the enrollment information to Medicare.

2. Medicare card

Once your enrollment is complete, you will receive a card about three months later indicating that your coverage has begun. If you apply for Medicare in the late fall, you may not receive your card until the following spring (since the range takes effect on January 1 of each year).

3. Enrollment in Parts B and D

You must enrol for Part B and Part D during an open-enrollment period if Medicare doesn’t automatically enroll you. Open enrollment for Part B is from October 15 to December 7 each year unless you have other insurance covering medically necessary care. For Part D, open registration is from February 15 to May 31 of each year.

4. How much will it cost

Medicare is not free, but it’s a good value for the money. The median gross annual premium is $2,115. Medicare Part B premiums are paid in monthly installments, while a monthly, lump-sum payment produces Part A premiums. You need to pay Social Security taxes in advance, and you will have to pay either before or after the month’s Medicare premium.

5. How does it work

You can choose which health insurance company to use for your Part C plan. You might use a site like Clearmatch Medicare to find the right plan for you. You can buy plans from competing for private insurers or seek a Medicare-managed care plan from private health insurers that accept Medicare as an enrollment source of business. You’ll also have the option of choosing a stand-alone Medigap plan, which will pay your Medicare Part B premium plus co-insurance of 20% on most drugs. For those over age 65, Part D – the prescription drug plan – is optional.


It is a good idea to buy Part D coverage since it can cover some or all of your prescription drug costs and protect you from high deductibles and co-pays. Part B cannot cover prescriptions. You can get more information on Medicare benefits and enrollment by contacting the Social Security Administration Office in person, over the phone, by writing a letter or via the Web.

Medicare can provide significant coverage for seniors, but it is essential to know the difference between parts A and B of Medicare. It is also necessary to ensure that you have the correct type of Medicare coverage and Medigap Insurance Plans. The official Medicare site is an excellent place to start looking for information on these questions. It is also the best way to learn more about Medicare, what you can expect and how it can fit into your retirement plans and goals.


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