What is Medicare
Medicare is a federal health insurance program for people 65 or older. Medicare also covers some younger people with certain disabilities and people with End-Stage Renal Disease (ESRD). Medicare has four parts: hospital insurance (Part A), medical insurance (Part B), Medicare Advantage (Part C), and Prescription Drug Plans (Part D).
Medicare Part A and Part B together are called Original Medicare. Part C and Part D were added to improve the coverage gaps of Original Medicare.
Medicare Supplement plans, also known as Medigap, are private insurance plans that can help pay healthcare costs that Original Medicare doesn’t pay. Examples include copayments, coinsurance and deductibles.
Original Medicare: hospital and medical insurance
Original Medicare is a fee-for-service, federally managed health plan program. It provides those eligible, with coverage for and access to doctors, hospitals and other healthcare providers that accept Medicare. (Note: fee-for-service is a form of health insurance where providers are reimbursed a set fee for each service they provide.)
Original Medicare includes two parts: Part A (hospital insurance) covers services like skilled nursing facility or inpatient hospital care. Part B (medical insurance) helps pay for services for doctors, outpatient care, or durable medical equipment. Most people are automatically enrolled in Medicare Part A but must sign-up for Part B.
Medicare Part A: hospitalization coverage
Medicare Part A pays for services received in a hospital or long-term care setting:
- Inpatient hospital services and care
- Skilled nursing facilities care
- Hospice care
- Home care services (following an acute stay)
- Transplants
Medicare Part B: medical services coverage
Medicare Part B pays for outpatient care, doctor services, medical supplies, and preventive services:
- Doctor’s visits
- Outpatient services, surgeries, physical, speech and occupational therapy
- Ambulance services
- Home care services (not following acute stay)
- Medical and lab tests
- Durable medical equipment and supplies
- Preventive care, mammography, Pap tests
Medicare Part C: Medicare Advantage Plans
Medicare Advantage Plans include everything covered by Medicare Parts A and Part B. They then add coverage for benefits like vision, hearing, dental, and wellness programs. Most plans include coverage for prescription drugs (Part D). These are known as Medicare Advantage-Prescription Drug (MA-PD) Plans. Only Medicare-approved private companies can offer these plans.
Dual Special Needs Plans
If you are eligible for Medicare and Medi-Cal, a Dual Special Needs Plan (D-SNP) is right for you. D-SNPs offer Medicare Part C and Part D Medicare coverage. They also lower your costs, offer more benefits, and help your Medicare and Medi-Cal coverage work together.
Medicare Part D: Prescription Drug Plans
Medicare Part D provides standalone coverage for your prescriptions. You can choose this standalone coverage, which works well with a Medicare Supplement plan, or combine it in a Medicare Advantage-Prescription Drug (MA-PD) Plan. Either choice helps you cover the costs of your prescription drugs.
Medicare Supplement plans (Medigap)
If eligible, you can get health coverage through Original Medicare. However, it does not pay for all health care costs. A Medicare Supplement plan, or Medigap, can help you pay for extra services and benefits including some copayments, coinsurance, and deductibles.
Medicare plan options
Complete coverage |
Original Medicare + Medicare Supplement + Prescription Drug Plans | ||
|---|---|---|---|
Part A (hospital) Part B (medical) |
Deductibles, copays and more Optional dental, vision coverage |
Part D (drugs) | |
| OR | |||
Complete coverage |
Medicare Advantage Prescription Drug Plans | ||
| Part C (hospital, medical) | Dental plan options, additional benefits | Part D (drugs) | |
Eligibility
You become eligible for Medicare coverage when you turn 65. Younger people with a disability or End-Stage Renal Disease may also be eligible. For those younger than 65 with questions about eligibility, please visit Medicare.gov.
The Medicare eligibility rules are the same for everyone. But the enrollment period may be different. Your window of seven months to sign up begins three months before the month you turn 65. It ends three months after the month you turn 65.
What does Medicare cost?
Most people pay a monthly premium and fees when they receive care. There are various out-of-pocket costs associated with Medicare Parts A, B, C, and D. It’s important to understand the costs and coverage so you can select the best plan for you.
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Page last updated: 10/1/2024