Knowing the Medicare basics

for you or a loved one

Medicare is a federal program that provides health insurance for people ages 65 and older and for younger people with certain disabilities. Whether you are nearing the age to think about Medicare (and planning ahead is always good) or your parents are, it’s helpful to understand the benefits and how to navigate the Medicare landscape. The following chart provides a basic understanding of how Medicare works:

MEDICARE GENERAL PROVISIONS COST
Part A (hospital insurance)
  • Helps cover inpatient care in hospitals
  • Helps cover skilled nursing (facility, hospice, and home health care)
 You usually don’t pay a monthly premium for Part A coverage if you or your spouse paid Medicare taxes while working. If you aren’t eligible for premium-free Part A, you may be able to buy it.*
Part B (medical insurance)
  • Helps cover doctors’ and other health care providers’ services, outpatient care, durable medical equipment, and home health care
  • Helps cover some preventive services to help maintain your health and to keep certain illnesses from getting worse
 You have to pay a monthly Part B premium. Most people will pay the standard premium amount. However, if your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you may pay more.*
Part C (Medicare Advantage)
  • Offers health plan options run by Medicare-approved private insurance companies. Medicare Advantage Plans are a way to get the benefits and services covered under Part A and Part B. Most Medicare Advantage Plans cover Medicare prescription drug coverage (Part D). Some Medicare Advantage Plans may include extra benefits for an extra cost.
 You may have to pay a monthly premium for Part C coverage, in addition to the monthly premiums for Part A and/or Part B coverage.*
Part D (prescription drug coverage)
  • Helps cover the cost of prescription drugs
  • Run by Medicare-approved private insurance companies
 Most Part D drug plans charge a monthly fee that varies by plan. You pay this in addition to the Part B premium. However, if you’re in a Medicare Advantage Plan (a Part C plan) that includes prescription drug coverage, the monthly premium may include an amount for Part D prescription drug coverage. What you pay for Part D coverage could be higher based on your income.

*You will also be responsible to pay for any copayments, coinsurnace, and deductibles that may apply for each part A, B or C service.

One of the more frequently asked questions concerning Medicare is, “How does COBRA coverage interact with Medicare?” According to Medicare, coverage under COBRA does not count as coverage based on active employment. Therefore, if you do not enroll in Part B during the 8 month “Special Enrollment Period” after your employment ends, you may be subject to a late enrollment penalty. You also may not be able to enroll in Part B until the next “General Enrollment Period”, which may cause a gap in your health care coverage. To learn more about Medicare, please visit either http://www.medicare.gov/ or http://www.ssa.gov/.