Medicare

As a senior, your health care is important. As you get older, your body has more wear and tear placed on it. Your immune system gradually declines with age, which increases your chance of getting sick.

In addition, a weakened immune system means you will take longer to recover, increasing your chances of your condition worsening before you have a chance to recover.

An important part of health care is having a good health insurance plan. Seniors typically have many more health concerns than young or middle-aged adults. For example, living in a senior health care facility or requiring assisted living is very expensive. If you do not have a good health insurance plan, you will have to pay for these expenses out of pocket. If you are retired or about to retire, you may not have the finances to support these expensive medical costs. Additionally, you may not have access to the same health insurance if you are no longer working. Fortunately, there are specific medical plans for seniors, with Medicare being one of the most effective and accessible.

What is Medicare?

Because of the similar names, Medicare and Medicaid are sometimes confused. Medicaid is a general health insurance program for lower income households that is administered by each state. Medicare is a federal health insurance plan that is primarily available to seniors who are 65 years of age or older. Medicare is divided into four separate parts. It may initially look very overwhelming, but understanding the different Medicare programs is very straightforward. Many seniors only need one program, but depending on your health, you may benefit from multiple Medicare plans. The four different Medicare insurance plans are:

  • Medicare Part A, focusing on hospital insurance.
  • Medicare Part B, focusing on medical insurance.
  • Medicare Part C, which is Medicare provided through a private health insurance company. It is sometimes referred to as a Medicare Advantage Plan.
  • Medicare Part D, focusing on prescription drug coverage.

Eligibility Requirements for Medicare

Each Medicare plan has slightly different eligibility requirements. Fortunately, the eligibility requirements for each plan are easy to understand. The first plan you should look at is Medicare Part A. Part A is the most common form of Medicare because of the eligibility requirements. If you are 65 years of age or older and have paid Medicare taxes for at least 10 years, you are most likely eligible for free insurance coverage. You must also be receiving or be eligible for retirement benefits from either Social Security, or you or your spouse must have had Medicare covered government employment. You are also eligible if you are receiving or are eligible for Railroad Retirement benefits. If you do not meet these eligibility requirements, you are still able to purchase Part A coverage.

Medicare Part B uses many of the same eligibility requirements. The biggest difference is you are required to pay for Medicare Part B coverage. The eligibility requirements for Part C is more complicated. Coverage for Medicare Part C is provided through a private insurance provider. As a result, the insurance provider is allowed to set its own eligibility requirements. You will have to look through the specific health insurance plan to find out if you qualify.

Medicare Part D does not have very strict eligibility requirements. Part D is largely an add-on insurance plan to help you pay for prescription drugs. As long as you are willing to pay extra, you should be able to add Medicare Part D to your health insurance plan.

Medicare Costs and Coverage

As with most health insurance plans, understanding the costs and coverage for Medicare can be confusing. With Medicare, it can be even more overwhelming to research costs and coverage due to how many different plans are available. Medicare still uses traditional insurance payment options, such as medical co-pays, deductibles and premiums. In addition to the insurance plan you have, your financial situation and existing medical conditions will influence how much you pay for Medicare coverage. When assessing the overall costs of Medicare, it helps simplify the process by looking at what coverage each plan provides. If a plan does not include any services you need, you can completely ignore it and not worry about the costs.

All the Medicare plans offer very extensive coverage, but you can look at the general categories to judge whether you need more information. Medicare Part A coverage focuses on the following areas:

  • Inpatient hospital care
  • Health care in a skilled nursing facility
  • At home hospice care
  • Generalized health care, such as doctor visits and annual health screenings

Medicare Part B includes the following areas:

  • Outpatient medical care
  • Medical supplies
  • Additional preventative services, which are not covered under Medicare Part A

Coverage for Medicare Part C will depend entirely on what plans are available on the private insurance marketplace. Typically, Medicare Part C covers the same areas as Part A and B. However, Medicare Part C is more customizable, since it is not a federal plan. Depending on your health needs, you may find it makes sense to pay for select health insurance coverage through Medicare Part C.

Medicare Part D provides coverage for prescription drugs. However, the payment options for Medicare Part D are different than the other plans. Medicare Part D uses a coverage gap, which requires you to spend a certain amount before the insurance coverage begins. Once you your coverage gap, you only have to pay a small co-pay with each purchase. Whether you need Medicare Part D largely depends on your prescription coverage needs.

Applying for Medicare

There are multiple enrollment periods for Medicare. These enrollment periods are the annual enrollment period and the initial enrollment period. You are informed of your initial Medicare enrollment period several months before your 65th birthday, when you will first become eligible for Medicare. The annual enrollment period is a set time period each year where you can apply for Medicare coverage. There are additional options available, known as a special enrollment period if you are unable to apply during the other enrollment periods. There may be additional enrollment options depending on your medical history.

Depending on your eligibility requirements, you may automatically be enrolled for Medicare coverage. When you receive information for your initial enrollment period, you will find out whether you need to apply, or if you are automatically enrolled in a Medicare plan. Otherwise, you can apply for coverage online or through the Social Security office. If you wish to apply for Medicare Part C or D, you will have to fill out separate applications for each plan. In addition, the application for Part C may have additional steps depending on the private insurance provider.

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