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All About Medicare

What is Medicare?

Medicare, a U.S. government-sponsored health insurance program, subsidizes healthcare services. The plan is available to people 65 years and older, as well as younger people who meet certain eligibility criteria. It also covers individuals suffering from certain diseases.

Medicare is broken into several plans, which cover different healthcare situations. Some of these options come at a price to the insured person. This allows consumers to have more options in terms of coverage and costs, but it can also make it difficult for people who want to sign up.

The Key Takeaways

  • Medicare is a federal program that provides healthcare subsidies for people 65 and older, as well as younger people who meet certain eligibility criteria or people with certain illnesses.
  • Medicare can be divided into four parts: Medicare Part A (also known as Medicare Advantage), Part B, Part C, and Part D for prescription drugs.
  • Medicare Part A premiums for individuals who have made Medicare contributions over a period of 10 years or more through their payroll taxes are exempt.
  • Patients are responsible to pay premiums for Medicare programs.

What are my eligibility requirements for Medicare?

How Medicare Works

The U.S. government funds Medicare, a national health program. The program was created by Congress as part of the 1965 amendments to the Social Security Act to provide coverage for people 65 years and older who don’t have health insurance.

The Centers for Medicare & Medicaid Services (CMS) now manages the program. It extends coverage to people with disabilities, those with end-stage renal disease, amyotrophic lateral sclerosis or Lou Gehrig’s disease. There are four parts of Medicare that provide different services to the insured.

  • Medicare Part A
  • Medicare Part B
  • Medicare Part C
  • Medicare Part D

Who is Medicare for?

There are many criteria that determine eligibility, but generally, anyone who has been legally resident in the United States for at least five years and is 65 years old or older, is eligible for Medicare coverage. Anyone who is eligible for Social Security benefits can automatically enroll in Parts A or B. Part D coverage can be opted out, but enrollment must be made by the individual.

Social Security Disability Insurance (SSDI) is available to people under 65 years of age. Those who are eligible for SSDI must wait for 24 months from the date they received their first check. However, this is waived for those with ALS or permanent kidney disease. You can enroll through the Social Security Administration website.

Anybody with ALS automatically qualifies for Medicare, regardless of their age.

If an insured person, or their spouse, has contributed to Medicare for a minimum of 10 years through their payroll taxes, premiums for Medicare Part 1 are free. Premiums for the Medicare program’s other components are your responsibility.

There are many sources of funding for the program. The Federal Insurance Contributions Act (FICA) is a U.S. tax law that allows taxpayers to contribute to the program. This money goes towards Medicare and Social Security deductions.

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Employees contribute 7.65% of their pay to these programs as of 2021/2022. This includes -6.2% for Social Security and 1.45% for Medicare. The same percentage is paid by employers on behalf of employees.

How do I enroll in Medicare?

You will automatically be enrolled in Medicare Part A and Medicare Part B as long as you’re eligible for Social Security benefits. These programs are free to enroll in.

You will need to enroll in other parts of Medicare.

You will need to sign up if you want Medicare Part D prescription drugs coverage. You can register for Social Security benefits online if you are not eligible. This should be done within a seven-month period around your 65th Birthday. This window covers the three months prior to your 65th birthday, your birthday month, and the three following your birthday month. You may be subject to a penalty if you miss this window.

You must also enroll if you want Medicare Supplement Insurance (Medigap). This enrollment period begins the month you turn 65 if you are enrolled in Medicare Part B. If you sign up within that time period, the private insurers that offer Medigap plans must take you. If they don’t, it is unlikely that they will sell you a Medigap policy.

There are many annual Medicare open enrollment periods if you missed your initial enrollment period, or want to change plans later.

What does Medicare pay for?

There are four types of Medicare programs that individuals can choose from, as we have already mentioned. Parts A, B, and Medicare Part C provide basic Medicare coverage. Individuals may also choose to enroll in Medicare Part D.

Because they were created in 1965, Medicare Parts A & B are commonly known as “Original Medicare.”

What does Medicare Part A Cover

Medicare Part A pays for hospitals and similar inpatient or inpatient-like facilities. This plan does not cover long-term care or custodial care. Anyone who has Social Security benefits is automatically covered. Enrollment can be done online by those who do not receive benefits.

These are the Part A deductibles and co-insurance:

  • For the calendar years 2021 and 2022, Part A Deductibles and Co-insurance Amounts
    2021 2022
    Inpatient hospital deductible $1,484 $1,556
    Daily co-insurance for 61 90 Days $371 $389
    Daily co-insurance to cover lifetime reserve days $742 $778
    Co-insurance for skilled nursing facility $185.50 $194.50


    What does Medicare Part B cover?

    Medicare Part B covers outpatient care, such as doctor visits. Part B also includes preventive services, ambulance services, and mental health coverage. This plan also covers prescription drugs.

    For Medicare Part B enrollees, the standard monthly premium is $170.10 in 2022. This is an increase of $21.60 over $148.50 for 2021. The annual deductible in 2022 is $233, which is $30 more than the $203 annual deductible in 2021.

    Premiums for taxpayers whose modified adjusted gross Income (MAGI), is greater than $88,000 or more than $176,000 in 2021 for married couples are higher. In 2022, these thresholds will rise to $91,000 & $182,000, respectively.

    What is Medicare Part C?

    Medicare Parts A, B, and C are available to those who are eligible. Part C is also known as Medicare Advantage. Medicare Advantage plans are purchased by consumers through private insurers, rather than the government. Medicare Advantage must provide coverage at least equal to Original Medicare (Parts B and A).

    Many plans have annual caps on out-of-pocket costs. Many plans offer benefits that Original Medicare patients would not be able to obtain through supplemental insurance like a Medigap plan. These may include copays, coinsurance, deductibles, and costs associated with insurance while abroad. Some plans include vision, hearing, and dental care. If the Build Back Better plan is enacted, hearing aids will be covered starting in 2023. As a supplemental benefit, some Medicare Advantage plans cover hearing services.

    What is Medicare Part D?

    Medicare Part D offers additional prescription drug coverage. Part A and Part B Medicare members can enroll in Part D to receive subsidies for prescription drug costs Original Medicare plans don’t cover.

    The History of the Medicare Program

    Medicare was established on July 30, 1965, when Lyndon B. Johnson, then President of the United States, signed into law the bill which created both Medicare and Medicaid. Part A (Hospital Insurance), and Part B (Medical Insurance) were the components of the Original Medicare program.

    Many changes have been made to Medicare over the years by Congress. The program was extended to more people and made more affordable by expanding its coverage.

    In 1972, Medicare was extended to include the disabled, end-stage renal disease patients requiring dialysis, or people 65 and older who choose Medicare coverage. In the years since, many more benefits have been added, such as prescription drug coverage.

    The Medicare Prescription Drug Modernization and Improvement Act (MMA) 2003 brought about the most significant changes to Medicare in 38 years. The new legislation made private health plans that were approved by Medicare Medicare Advantage Plans. These plans are often called Part C, “MA Plans” or “Part C.” In 2006, the MMA expanded Medicare to include an optional prescription benefit, Part D.

    2020 CARES Act

    Donald Trump signed a $2 trillion emergency coronavirus stimulus package, known as the Coronavirus Aid, Relief and Economic Security Act (CARES Act), into law on March 27, 2020. The new coronavirus COVID-19 was added to Medicare’s coverage. The CARES Act:

    • Medicare will have greater flexibility to cover telehealth services.
    • Authorized Medicare certification by nurse practitioners, physician assistants, and certified nurse specialists for home care services.
    • Medicare payments increased for COVID-19-related hospital stays and durable medical equipment

    The Families First Coronavirus Respond Act (FFCRA), clarifies that Medicaid coverage can be provided by non-expansion state Medicaid programs to cover COVID-19-related services for uninsured adults. This state option also covers populations that have limited Medicaid coverage.

    Medicare vs. Medicaid

    While both Medicare and Medicaid are government-sponsored insurance programs, each program has its own eligibility requirements. Medicare is for people 65 years and older, and those with certain medical conditions. Medicaid is a federal program that offers healthcare coverage to low-income people. Medicaid recipients must have limited assets to be eligible.

    Medicaid coverage allows you to access services like doctor and nursing services, X-rays, hospitalization, home health care, and lab and radiography services. Some states also offer prescription drug coverage, medical transportation, and physical therapy.

    Who is eligible to receive Medicare?

    Medicare is available to those who are over 65 and have been eligible for Social Security. Medicare is available if you have been receiving Social Security Disability Insurance (SSDI), for at least 24 months. Certain disabilities such as Lou Gehrig’s disease, amyotrophic lateral sclerosis, permanent kidney failure or Lou Gehrig’s disease, make it eligible automatically.

    Is Medicare free?

    Medicare Part A is available to most people free of charge, as long as they pay payroll taxes under Federal Insurance Contributions Act. A spouse’s work history can help an individual qualify for Medicare Part A at no cost. Individuals who do not meet the requirements for Medicare Part A will be required to pay a premium. Premium payments are required for other types of Medicare.

    Is it Medicare insurance?

    Medicare covers eligible people’s healthcare costs in the same manner as health insurance, but this is where the similarities end.

    Basic Medicare coverage does not require a premium, but it is cheaper than private insurance. Private insurance can often extend coverage to your dependents such as your spouse or children. Medicare is individual insurance. Most people who have Medicare coverage must be able to prove their age or disability on their own.

    What is not covered under Medicare?

    Medicare doesn’t cover many key healthcare expenses. Long-term care (also known as custodial or long-term care) is the largest. These custodial expenses are covered by Medicaid, the federal program for low-income people, but not Medicare.

    The following are common expenses that Medicare doesn’t cover:

    • Eye exams and prescriptions
    • Dentures
    • Most dental care
    • International medical care
    • Cosmetic surgery
    • Massage therapy

    What amount is taken from your Social Security Check for Medicare?

    Individuals with a qualifying work history are eligible to receive Medicare Part A at no additional cost. In 2021, the standard premium for Medicare Part A is $148.50. This is automatically deducted from your Social Security checks. In 2022, the standard Part B premium amount is $170.10.

    In conclusion

    Medicare, a U.S. government-sponsored health insurance program, subsidizes healthcare services. The plan is available to people 65 years and older, as well as younger people who meet certain eligibility criteria. It also covers individuals suffering from certain diseases.

    You will automatically be enrolled into Medicare Part A which covers hospital costs and Medicare Part B which covers visits to the doctor, as long as you’re eligible for Social Security benefits. Once you are eligible, you can enroll in any other part of Medicare.

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