What is Medicare?

Everyone’s heard of it. Many are familiar with the basic concept of it. But most people don’t understand how it actually works. If you’re turning, or have recently turned 65, you’re most likely overrun with sales literature from insurance companies as well as mail from Medicare including the “Medicare & You” handbook. All of this communication from different sources can be overwhelming and, for some, very confusing.


Here are a few basics about the Medicare program:
- Medicare is available to people 65 or older, younger people with disabilities and people with end-stage renal disease
- Most people don’t pay for Part A (see description below)
- There are multiple options for Medicare coverage such as through private insurance companies or through the federal Medicare program (see the section “Your Medicare Coverage Options”)

 

What Medicare Covers

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Part A
Hospital Insurance

  • inpatient hospital care

  • skilled nursing facility care

  • hospice care

  • home health care

If you or a spouse have worked approximately 10 years and paid Medicare taxes on those wages, you’ll most likely get Part A for free

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Part B
Medical Insurance

  • doctor and specialist visits

  • outpatient services

  • home health care

  • medical equipment (like wheelchairs & walkers)

  • many preventive screenings

Part B has a monthly premium ($174.70 in 2024). Some people get it automatically and some will need to apply for it.

Part D
Drug Coverage

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  • helps cover the cost of prescription medications

  • covers many recommended shots and vaccines

Plans that offer prescription drug coverage are run by private insurance companies following rules set by Medicare

So what are my options for coverage?

Original Medicare
(Part A & Part B)

  • Health insurance provided by the federal government

  • Does not include prescription drug coverage, dental, vision or hearing

Original Medicare + one or both of the following:

  • Medicare Supplement Insurance

    • helps pay some or all of the costs not covered by Original Medicare

  • Prescription Drug Plan

Medicare Advantage
(Part C)

  • Combines Part A and Part B in one plan from a private insurance company

  • Usually includes prescription drug coverage (Part D)

  • Includes additional benefits such as dental, vision and hearing

A Brief History of Medicare

1965

The Medicare program is signed into law by President Lyndon Johnson in 1965 to provide protection for older Americans against the high cost of healthcare. When Medicare was originally introduced, it had two Parts: A and B. That is why you may hear the terms “original” or “traditional” Medicare.

President Johnson signs the Social Security Amendments of 1965 to establish Medicare for the elderly and Medicaid for the poor

President Johnson signs the Social Security Amendments of 1965 to establish Medicare for the elderly and Medicaid for the poor

1980

Medicare supplement plans, also called Medigap plans, are created to help pay for costs that original Medicare doesn’t cover.

1997

Medicare+Choice program is signed into law that allows Medicare Parts A & B benefits to be administered by private insurance companies.

2003

The Medicare+Choice program is renamed to Medicare Advantage and a new medicare prescription drug benefit known as Part D is signed into law.

 2006

Part D becomes available as either a stand-alone plan or as part of a Medicare Advantage plan.