How the nation’s health insurance coverage for older adults and people with disabilities works
Ever since President Lyndon Baines Johnson made Medicare the law of the land in 1965, hundreds of millions of Americans have relied on this program to help them get affordable, quality health care.
About 66 million individuals are currently enrolled in Medicare. Of those, more than 57 million are people 65 and older and more than 8 million are younger people with disabilities.
Medicare has evolved over the years. In 1997, Congress officially created Part C, what is now known as Medicare Advantage, the private insurance alternative to original Medicare. And in 2003, lawmakers added Part D, which covers prescription drugs.
Here are the answers to some of most frequently asked questions about Medicare. Detailed information on the various parts of Medicare, as well as how and when you can enroll or change your coverage, can be found in AARP’s Medicare Made Easy series.
1. You have options
Medicare has four basic parts: Part A covers hospital, hospice and some home care. Part B covers doctor visits, diagnostic tests and other outpatient services. Part C, also known as Medicare Advantage, is the private insurance alternative to original (or traditional) Medicare. Part D covers prescription drugs.
When you sign up for Medicare, you’ll have to decide whether to go with original Medicare or a Medicare Advantage plan. If you pick original, you’ll need to enroll in a Part D prescription drug plan to get your medications covered and you may want to buy a supplemental (Medigap) policy, which will pick up some or all of your out-of-pocket costs. (See more below about what Medicare will cost you.) If you choose Medicare Advantage (MA), or Part C, you’ll then have to pick which insurance company’s plan you want to enroll in. You likely won’t need to get a Part D plan because most MA plans include coverage for prescription drugs.
2. You could pay more if you enroll late
Medicare has what it calls an initial enrollment period (IEP) for people turning 65. It runs for three months before your 65th birthday month and three months after. You’ll need to sign up for Medicare Part B during that enrollment window or you’ll be subject to a late enrollment penalty, which means you’ll have to pay a higher monthly premium for as long as you are on Medicare. The same goes for Part D coverage.
Because most people don’t have to pay a premium for Part A, it likely won’t cost you anything to sign up for that part of Medicare, and doing so will put you into the system and make it easier when it’s time to enroll in Part B.
3. You don’t have to sign up at 65
While the Medicare eligibility age is 65, if you have comprehensive health insurance through your job or are covered under a spouse’s health benefit, you may be able to defer enrolling in Medicare until you no longer have that coverage. However, even if you have job-based insurance, an employer may require that you enroll in Medicare and use its insurance to fill any gaps in Medicare. So, check with the employer you get your coverage through.
Also, if you get health insurance through an Affordable Care Act (ACA) marketplace, you’ll have to switch over to Medicare when you turn 65. Same goes if you are covered under COBRA, which extends a former employer’s coverage; if you have the military’s Tricare insurance; or if you have a retiree health plan. None of those plans is a substitute for Medicare.
4. You enroll in Medicare through Social Security
The Social Security Administration (SSA) handles Medicare enrollment. You can sign up online at www.ssa.gov. You can also go to your nearest Social Security office, or call SSA at 800-772-1213.
You can enroll in Part A (hospital) and Part B (doctor and outpatient) through SSA. But if you want a Medicare Advantage plan or a Part D prescription drug plan, you’ll need to go to medicare.gov and sign up there. You can get help enrolling in those plans by calling the Medicare hotline at 800-633-4227 or by contacting your local State Health Insurance Assistance Program (SHIP).
5. Medicare isn’t free
While Medicare pays the lion’s share of enrollees’ medical costs, there is, as they say, no free lunch. In addition to monthly premiums for the various parts of Medicare, there are copays and coinsurance costs for services like doctor visits, diagnostic tests, hospital stays and prescription drugs. How much you’ll have to pay will depend on which Medicare option you sign up for (original or Medicare Advantage) and which specific plan you pick.
6. There’s help if you can’t afford health care
Depending on your income, the government offers programs that can help you afford your Medicare out-of-pocket costs. You might qualify for Medicaid, the federal-state program for people with lower incomes. If you do, Medicaid will pick up many of Medicare’s out-of-pocket costs. Medicare also has a number of savings programs that can help, including one just for prescription drugs called Extra Help.
7. There is no Medicare family plan
Unlike when you have private health insurance, Medicare doesn’t have a family plan. Everyone must sign up individually when they become eligible. Same goes for any supplemental insurance you might buy: Each Medicare beneficiary needs to enroll on his or her own.
8. Medicare doesn’t cover everything
Medicare covers a lot of preventive care and most medical services associated with illnesses. But there are things it doesn’t cover, such as most dental, vision and hearing care, cosmetic surgery and other services.
9. You aren’t stuck with the same plan forever
Every fall — from Oct. 15 to Dec. 7 — beneficiaries can check out their coverage and decide if they want to make changes. This annual open enrollment period is a time, for example, to review your prescription drug plan and make sure the medications you take are covered and affordable. You can also look back at your experience with a Medicare Advantage plan and decide if you want to keep it or can get a better deal with a different plan.
10. Medicare doesn’t cover you outside the U.S.
There are some exceptions but most of the time Medicare doesn’t cover you outside the country. If you are traveling or have a medical emergency and the nearest hospital is closer than one in the United States (as in Canada or Mexico), then Medicare will cover that. Also, if you live in the U.S. but the nearest hospital is in another country (again, Canada or Mexico), then Medicare will pay for you to get care at the foreign hospital.