Medicare Explained
Medicare is a federal health insurance program that provides benefits for those 65 and older or with a qualifying disease or disability.
When you are eligible for Medicare and begin enrolling, you will have two basic coverage options:
- Medicare Part A: Covers Hospital and Inpatient Care
- Medicare Part B: Covers Preventative and Outpatient Healthcare Services
Most people will enroll in both of these plans at once—this is referred to as Original Medicare. With Parts A and B, you have the option to add additional coverage through any of these programs:
- Medicare Advantage, or Part C: Provides the Same Benefits as Original Medicare and Additional Benefits Unavailable Under Original Medicare
- Medicare Supplements, or Medigap: Helps Reduce the Out-Of-Pocket Costs Associated With Original Medicare
- Medicare Part D: Provides Prescription Drug Coverage
Qualifying for Medicare
Within these three categories, there are many different individual plan options, each of which provides its own individualized coverage. To be eligible for these additional coverage options, all you have to do is be enrolled in Original Medicare.
Original Medicare eligibility is based on age and/or health. Once you turn 65, you can enroll whenever you choose (though it is best to do so as soon as possible). Or, if you have End-Stage Renal Disease (ESRD) or Lou Gehrig’s Disease, you also qualify.
Finally, regardless of age, if you have received Social Security disability benefits for at least 24 months, you can also qualify for Medicare.
Paying for Medicare
The amount you pay for each Medicare plan will, of course, vary quite a bit. However, you can expect to make payments in three different categories, no matter the plan:
- Premium: A monthly payment you make to the plan based on your needs, health, and amount of coverage. You likely will not, however, have to pay premiums for Medicare Part A.
- Deductible: A yearly fee you must meet to maintain your coverage outside of your premiums.
- Copayment/Coinsurance: Each time you receive a benefit from your plan, you will likely have to pay a small out-of-pocket fee. This will either be a flat cost known as a copayment, or a percentage of the total cost known as coinsurance.
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