There are currently more than 44 million people in the United States receiving Medicare benefits. Are you part of this group? Are you about to join it?
If you fall into the latter category, there’s a good chance you have questions about Medicare and how the program works. Whether you have questions like “how old to get Medicare?” or you want to know what types of Medicare plans are available to you, keep reading. Explained below are answers to all of your most pressing questions.
What Is Medicare?
Let’s start with the basics. Medicare is a federal health insurance program that was created in 1965. It’s designed to benefit those who are aged 65 and older, regardless of their income, health status, and/or medical history. In 1972, Medicare was expanded to provide coverage to folks under 65 who have long-term disabilities.
Millions of people throughout the U.S. benefit from Medicare coverage each year. It helps them pay for things like hospitalization, doctor’s visits, prescription drugs, and preventive care. Medicare can also offset the costs of time spent in a skilled nursing facility, home health care services, and hospice care.
This program accounts for approximately 17 percent of total federal spending, as well as 21 percent of national health spending. Medicare spending has increased by about 6.4 percent, according to the latest data.
Who Receives Medicare Benefits? How Old to Get Medicare?
Those who are aged 65 or older are considered to be entitled to a Medicare plan known as Medicare Part A. If they have been deemed eligible to receive Social Security payments, and if they have paid payroll taxes for a minimum of 10 years, they do not have to pay a premium for Medicare Part A.
If they receive Social Security Disability Insurance (also known as SSDI) payments, those who are younger than 65 can also receive Medicare benefits. They must go through a two-year waiting period before they can start receiving Medicare benefits, though.
The only exceptions are those who are suffering from end-stage renal disease (or ESRD) or amyotrophic lateral sclerosis (or ALS). These individuals become eligible without having to through any kind of waiting period.
Approximately one in seven Medicare beneficiaries is under the age of 65 and living with a long-term disability. Another 12 percent are over the age of 85. Nearly half of those who receive Medicare benefits have an income that’s below $26,200 per year and less than $74,450 in savings.
What Does Medicare Cover?
Medicare is split up into four different parts and covers a variety of medical expenses. Here’s a brief breakdown of what Medicare benefits cover, depending on the type of plan a person has:
- Medicare Part A: This covers hospital treatment, including hospital stays, time spent in a skilled nursing facility, home health visits (in some cases) and hospice care
- Medicare Part B: This covers doctor’s visits, outpatient treatment, preventive care, and some home health care visits
- Medicare Part C: This is another term for the Medicare Advantage program, a program that allows beneficiaries to enroll in a private health plan and also receive Part A and Part B benefits
- Medicare Part D: This covers prescription drug costs through certain private plans that contract with Medicare
Part A and Part B services make up the majority of Medicare benefits payments, followed by inpatient hospital visits and prescription drug costs.
What Is the Difference Between Medicare and Medicaid?
There’s a lot of confusion out there about the differences between Medicare and Medicaid. You now (hopefully) have a pretty clear idea of what Medicare is and what it entails. What about Medicaid, though?
Medicaid is a healthcare assistance program that’s designed to benefit people from low-income households regardless of their age. Most Medicaid patients do not pay anything for certain, covered medical expenses, although they might sometimes be required to pay a small co-payment.
Medicaid is a federal-state program and coverage varies from place to place. It’s run primarily by state and local governments, although there are certain federal guidelines that these governments must follow.
Eligibility for Medicaid is determined based on factors like family income and family size. Medicaid provides health coverage for low-income individuals, families, children, pregnant women, people with disabilities, and the elderly. In some states, the program covers all adults who fall below are specific income level.
It is possible for a person to benefit from both Medicare and Medicaid. If this is the case, they likely won’t have to worry about paying any out-of-pocket costs.
How Do I Sign Up for Medicare?
You might not have to worry about signing up for Medicare at all. If you’re already receiving Social Security benefits, you’re automatically enrolled in Medicare Part A and Part B when you turn 65. You should receive a Medicare card about two or three months prior to your birthday, and coverage will start on the first day of your birth month.
If you do not want to pay the premiums associated with Part B, you can withdraw. Be sure to do this before your benefits kick in, though, to avoid having to cover the cost of certain premiums.
For those who are not yet receiving Social Security benefits, it’s required that you apply for Medicare during a designated annual enrollment period. The initial enrollment period lasts for seven months and begins three months before your 65th birthday. It’s important to enroll during this period so that you can avoid gaps in coverage.
Those who are younger than 65 and looking into Medicare benefits to cover expenses associated with a long-term disability will need to reach out to a state official to begin the enrollment process. The government’s Medicare website is a great place to start if you want to learn more about different plans or connect with an expert to see what kind of coverage you qualify for.
Should I Enroll if I’m Still Working?
If you’re still working and don’t plan on retiring soon, you can still enroll in Medicare. At the very least, it’s a good idea to take advantage of Medicare Part A. It’s premium-free in most cases and might cover certain expenses that your employer’s health plan doesn’t.
You may choose to delay Part B enrollment if you’re covered by your employer’s plan. This is especially important to consider since your income might make your premiums higher than they would be if you were retired. You can enroll in Medicare Part B at any time within the eight-month period after you retire (or after your employer-provided health coverage ends).
What Isn’t Covered by Medicare?
In addition to knowing what kinds of services are covered by Medicare, it’s also important to take note of the services that this program does not cover. Here are some of the primary services that you’ll have to pay for out of pocket or pay for with supplemental insurance:
- Medical care received outside of the United States
- Some types of long-term care
- Cosmetic surgery
In some cases, you can get cosmetic surgery and acupuncture covered when you enroll in a Part C plan. It’s not common, though.
How Do I Choose the Right Medicare Plan?
This is one of the most common questions people have when they’re getting ready to enroll in Medicare. A lot of folks have no idea what kind of plan they should choose, or what the differences are between each plan.
Here is a brief description of each of the Medicare plans from which you can choose:
- Original Medicare: This plan includes Medicare Part A (or Hospital Insurance) and Medicare Part B (or Medical Insurance)
- Medicare Advantage: Also known as Medicare Part C, this is an “all-in-one” plan that includes Part A, Part B, and (in most cases) Part D (or Drug Coverage)
Knowing your options is a good first step. There’s more you need to know before you can make the right decision for yourself and your healthcare needs.
Pros and Cons of Original Medicare vs Medicare Advantage
Understanding the pros and cons of these two plans will make it easier for you to choose a plan that makes sense for you. The following are some of the pros and cons of Original Medicare:
- You’re able to work with any doctor or hospital in the United States, as long as they accept Medicare
- You must join a separate Part D plan if you want drug coverage on top of the hospital and medical coverage
- If you want to reduce your out-of-pocket costs (yes, there are still out-of-pocket costs associated with Medicare coverage), you’ll need to invest in supplemental insurance
Original Medicare does provide some coverage and can help you makes sure you’re covered in the event that you need to see a doctor or go to the hospital. It does have its drawbacks, though, especially if you’re looking for prescription drug assistance.
If this is the case for you, Medicare Advantage might be a better pick. Before you just go ahead and sign up for it, though, let’s dive into the advantage and disadvantage of Medicare Advantage plans:
- Plans often have lower out-of-pocket costs when compared to Original Medicare
- Most plans offer additional benefits beyond those offered by Original Medicare (vision, dental, hearing, etc.)
- In many cases, you have to work with doctors who are part of the plan’s network
If you value expanded coverage and reduced out-of-pocket costs, a Medicare Advantage plan might be a better fit. Remember, though, that you’ll have less flexibility when it comes to the doctors you can see since you’ll have to be mindful of your network.
Do I Need Supplemental Coverage?
As the name suggests, supplemental coverage is supplemental to your base coverage. It’s not required, but it can be helpful in some cases.
Medicare Supplement Insurance, also known as Medigap, helps to fill in the gaps associated with Original Medicare. With Original Medicare, there is a deductible you must pay before Medicare will step in and pay a pre-approved amount. You’ll also be responsible for paying coinsurance and copayments.
Medicare Supplement Insurance is sold by private insurance companies and can help to cover these remaining costs. It also saves you from having to pay as much money out of pocket.
Keep in mind that you can only buy Medigap insurance if you are enrolled in Medicare Part A and Part B. To guarantee coverage, you also need to sign up for this type of insurance within six months of enrollment in Medicare Part B.
How Do I Choose the Right Medigap Policy?
Are you interested in purchasing supplemental coverage? Are you unsure of what to look for in a policy? If so, here are some helpful guidelines:
- Coverage: What does the policy include? Will it reduce the amount of money you have to pay out of pocket in a significant way?
- Pricing: How much will you have to pay each month for this additional coverage? Does that price work with your budget? Will it offset your out-of-pocket expenses?
- Rating: What kind of rating does the insurance company providing the policy have? Is it considered to be a well-respected insurance provider? Are people generally happy with the service they receive from them?
If you keep these things in mind and ask the right questions when you’re selecting a Medigap policy, you’ll have a much easier time finding one that works with your specific needs and fills in the gaps left behind by your Medicare plan.
Do You Still Have Questions About Medicare?
At first, Medicare can seem like a pretty confusing concept. Now that you have answers to common questions like “how old to get Medicare?”, are you feeling more confident in your ability to navigate the program?
Keep this information in mind and you’ll have no trouble getting the benefits you need and choosing a plan that works for you. Are you looking for more guidance before you make a final decision? If so, check out the Health section of our site today to learn more about Medicare, as well as other types of healthcare benefits that might be available to you.