If you live in the United States, then you probably have heard of Medicare before. Medicare is a federal health insurance program administered by the government which is meant to cover people who are 65 years of age or older.
Right now is the most important time of the year: open enrollment. Open enrollment is the only time all year that seniors can make changes to their Medicare coverage. This year, the open enrollment period will begin on October 15.
Overview
Medicare, which was enacted in 1966 by then-President Lyndon Johnson, was originally a program meant to cover military families and their dependents. Medicare has undergone many changes through the different administrations that have been in power since 1966, and every few years, we see additional benefits added to the list of covered services. The program is administered by the Centers for Medicare and Medicaid Services, which is a sub-section of the Department of Health and Human Services.
Medicare is split up into four sections, Parts A through D. Part A is the most basic form of Medicare, which covers hospital, hospice, and nursing costs. If you’ve been paying taxes, you won’t have to pay a monthly premium for Part A. Part B is optional, because it costs extra money, but it covers doctor’s services, supplies, outpatient care, and preventative services. Part C is called the Medicare Advantage Plan, and covers your prescription drug costs while also providing the services listed in Parts A and B. Part D is prescription drug coverage.
Who is Eligible?
Medicare is available to people who are over the age of 65, people younger than 65 with certain disabilities, or people with permanent kidney failure who are waiting on a transplant or undergoing dialysis.
If you’re over the age of 65, you can sign up for Medicare easily, but if you’re seeking Medicare under the disability condition, you’ll have to have been receiving disability benefits from Social Security for at least 24 months before you’re eligible for Medicare. The only exception to that rule is individuals with Amyotrophic Lateral Sclerosis (ALS), who are eligible for Medicare the same month that their disability benefits begin.
Cost of Coverage
There are a wide variety of services covered under the four different parts of Medicare, and consequently, there are a variety of costs associated with entering into the program.
Part A is premium-free if you or your spouse paid taxes for more than 39 fiscal quarters while working. If you have to pay a premium on Part A, it will cost you $422 per month, but if you’ve been working less than 10 years (between 30 and 39 fiscal quarters), you’ll pay $232 per month. Part B costs around $134 per month, but can vary depending on your income. The costs associated with Parts C and D depend on a variety of factors.
What It Covers
Medicare covers a mix of different services, and their website has a handy search engine where you can look up a service or item by code to see what plan it’s covered under.
Generally, Part A covers hospital and hospice fees, while Part B covers preventative care. The Medicare Advantage Plan (Part C) and drug plan (Part D) each cover a huge variety of prescription drugs and services, depending on the level of your plan. The Medicare drug plan is tiered, with certain drugs costing more depending on their usage, but you can always ask for an exception, so you can pay less.
Supplemental Insurance
When you have both Medicare and another type of health insurance, the way it works is that one insurance plan becomes the primary payer, and the other insurance plan becomes the secondary payer. The insurance plan that’s the primary payer is the first to pay when you’re charged, up to the limits of their coverage. Then, the secondary payer pays if there’s anything left to cover. It gets more complicated depending on the origin of your secondary insurance.
Dates for Open Enrollment
If you’re turning 65 this year, you are eligible to enroll in Medicare starting three months before your 65th birthday, and ending in the third month after your 65th birthday — this is called the Initial Enrollment Period.
After that, you’re given another chance to enroll during General Enrollment, which is open from January 1 to March 31 each year. If you enroll during General Enrollment, you may be subject to a late enrollment penalty. There’s also a period called Open Enrollment, which goes from October 15 to December 7, 2019, where you can make changes to aspects of your Medicare coverage, if you already have it.