During the Johnson administration in 1965, Congress enacted the Medicare Act as part of the Social Security Act. In the decades since, Medicare has undergone many changes, both large and small. In fact, Medicare Part C was officially signed into law in 1997 under President Clinton, and Medicare Part D under President Bush in 2003. The Centers for Medicare and Medicaid Services (CMS) now oversees the administration of Medicare, also known as Original Medicare.  

What is Medicare? 

With a few exceptions, Medicare is health insurance for people 65 and older. Some people can get Medicare if they have ALS (Lou Gehrig’s disease), end-stage renal disease (ESRD), and certain disabilities. At this time, nearly 55 million older people and over eight million younger people have Medicare services.  

Medicare covers many of your health care costs as you age, but not all of them. Medicare consists of four separate parts, each with its own set of requirements. The four parts of Medicare are: 

• Medicare Part A, which covers hospital care; 
• Medicare Part B, which covers outpatient medical care and doctor visits; 

• Medicare Part C, also known as Medicare Advantage, is private insurance that covers the same benefits as Parts A and B; 
• Medicare Part D covers most self-administered prescription drugs. 

To better understand Medicare, let’s take a look at each part and how they differ from each other. First, we’ll dive into Medicare Part A. 

Medicare Part A (hospital insurance) 

Medicare Part A is also known as hospital insurance. But this portion of Medicare actually covers much more than a simple hospital stay. In fact, Medicare Part A can cover much of the care you receive in many care situations, including: 

• Inpatient hospital stays: Covered care can include your room, meals, nursing care, and prescription drugs you receive while there. Part A also includes stays in inpatient mental health hospitals, long-term care hospitals, critical access hospitals, and acute care hospitals. 
• Nursing home care: If Medicare deems it medically necessary, then this type of care is covered by Part A, but only for a limited period of time. For your skilled nursing care to be covered in this situation, you must require more than custodial care, meaning you need help for things other than daily living tasks.  
• Skilled nursing facility care: You could receive coverage for skilled nursing care, a semi-private room, and prescription medications while there. You may also have coverage for medical equipment and medically necessary ambulance transportation. Your doctor can decide if daily skilled nursing care is medically necessary for you. 
• Home health services: If a doctor deems it medically necessary, you can receive home health services under Part A. These services can include physical and occupational therapy, skilled nursing care, and other similar types of services at home. 
• Hospice care: If you are terminally ill and your doctor determines that you have six months or less to live, then Part A may cover the care you receive, including doctor services and nursing care, medical equipment and supplies, and possibly other services.  

What does “medically necessary” mean? 

Many of the services, especially for Part A, hinge on whether the service is considered medically necessary. If you are wondering what that means exactly, you’re not alone. Medicare defines it as: 

“Health care services or supplies needed to diagnose or treat an illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine.” 

There are both national and local coverage determinations decided by the federal government and private Medicare contractors that offer guidelines on what types of care are medically necessary. Your doctor also plays a role in whether you receive specific care as medically necessary or not. If your Medicare plan decides that the care is not medically necessary, then it means that Medicare Parts A and B will not cover the cost. But you may still be covered by a Part C plan if you have one. 

Now, let’s take a closer look at the other half of Original Medicare, Part B. 

Medicare Part B (medical insurance) 

Medicare Part B is medical insurance and covers many of the services you receive from doctors and other health care providers. It can also cover medical equipment, outpatient, and home health care. Preventive services such as vaccines, screenings, and wellness checkups are also covered by Part B.  

Sometimes, some prescription medications are covered under Part B. However, most are not and are covered by Part D. 

Medicare Part A and Part B are not the same, but they also do not compete with each other. Instead, they are both important tools that provide coverage for you in many different situations.  

How does Original Medicare work? 

Medicare is different from private insurance — it doesn’t offer coverage for couples or families.  

You only need to sign up for Medicare Part A (Hospital Insurance) and Part B (Medical Insurance) once. 

Services covered by Medicare must be medically necessary. You pay the total cost if you get a service that Medicare doesn’t cover.  

If you’re not lawfully present in the U.S., Medicare won’t pay for your Part A, and Part B claims. 

If you have Medicare and other health insurance (from a group health plan, retiree coverage, or Medicaid), each type of coverage is called a “payer.” When there’s more than one payer, “coordination of benefits” rules decide who pays first. The “primary payer” pays what it owes on your bills first and then sends the rest to the “secondary payer” (supplemental payer) to pay. In some rare cases, there may also be a third payer. 

Who is eligible for Medicare? 

Turning 65 is the primary trigger for Medicare Part A and B eligibility. You can also become eligible before age 65 if you:  

• Receive Social Security Disability Insurance (SSDI) 
• Have amyotrophic lateral sclerosis (ALS) 
• Suffer from end-stage renal disease (ESRD) 
• Receive Railroad Retirement Board (RRB) benefits. 

In all cases, you must be a citizen of the United States or a legal, permanent resident for at least five years.

This Medicare Eligibility Wizard can help you find out if you are eligible, and what you can expect your Medicare Part A and Part B premiums to look like.  

What does Original Medicare cover? 

Medicare Parts A and B, also known as Original Medicare, cover many inpatient (hospital) and outpatient (non-hospital) services.  

Medicare Part A covers some home health care, skilled nursing facility care, hospice care, and inpatient hospital care.  

Medicare Part B covers many of the services you receive from healthcare providers and doctors. It also covers preventive care, home health care, and many types of medical equipment. 

But there are some important types of care that Original Medicare does not cover. In order to find out more about Medicare coverage for specific treatments, check out the links below. 

– Does Medicare cover dental?   

– Does Medicare cover hearing aids? 

– Does Medicare cover the shingles vaccine? 

– Does Medicare cover cataract surgery? 

– Does Medicare cover eye exams? 

– Does Medicare cover covid testing? 

– Does Medicare cover chiropractic? 

– Does Medicare cover acupuncture? 

What does Original Medicare not cover? 

Original Medicare provides extensive coverage for many types of healthcare. However, there are some types of care that it does not cover, including: 

• Cosmetic surgery; 
• Eye exams for prescription glasses; 
• Most dental care and dentures; 
• Hearing exams for hearing aids and fitting for hearing aids;
• Routine foot care; 
• Acupuncture; 
• Long-term or custodial care; 

Many people opt for additional coverage through a Medigap or Medicare Advantage (Part C) plan that includes coverage for many of these things when you pay a premium. You can also choose to pay for these services out-of-pocket.  

If you have Original Medicare, you cannot also have Medicare Advantage. Medicare Advantage, also known as Part C, replaces Original Medicare and is private insurance. However, Medicare Advantage must provide the benefits of Parts A and B that you would receive from Original Medicare.  

How much does Medicare cost? 

Although Original Medicare is a federal program, it is not free. There may be costs associated with the parts.

Medicare Part A: Most people pay a $0 premium. However, if you or your spouse did not work enough qualifying quarters, then you may have to pay a premium of $278 or $505 per month. There is a deductible of up to $1,632 in 2024. 

Medicare Part B: Many people must pay a premium for Part B, which starts at $174.70 per month in 2024. Your Part B premium is based on your reported income from your last tax return. This means that your 2024 premium is based on your 2022 income. This determination is also known as your Income Related Monthly Adjustment Amount (IRMAA). There is a deductible of $240. 

Medicare Part C: The costs for Part C vary based on the type of coverage you select. You will continue to pay the Part B premium, and you may also have a premium for the additional coverage that you receive through Part B. Part C also limits your out-of-pocket expenses to $8,850 in 2024. 

Medicare Part D: The costs for Part C also vary depending on the private insurer you select.  

When should you apply to Medicare? 

The most advisable time to enroll in Medicare is the Initial Enrollment Period (IEP) which is the first time you are eligible to sign up for Medicare. It begins 3 months before and ends 3 months after the month in which you turn 65. 

If you didn’t sign up for Medicare during the Initial Enrollment Period, you could still sign up during the General Enrollment Period (GEP), which happens every year from January 1 to March 31. 

In addition, some may be eligible to enroll during a Special Enrollment Period (SEP). This period becomes available to people who go through life events such as losing current coverage (e.g., you retire after 65 and lose your employer’s health plan). 

To learn more about these enrollment periods and when you can apply to Medicare, click here. 

How to apply for Medicare Part A and B? 

There are three ways to enroll in Medicare, and completing your application typically takes between 10 and 30 minutes. 

1) Online: https://www.ssa.gov/retireonline/ 

2) Over the phone: 800-772-1213 

3) In person at your local Social Security office. Look up your office here. 

In some cases, you’ll be automatically enrolled in Original Medicare. That applies if you are already receiving Social Security or Railroad Retirement Board (RRB) benefits, are receiving disability benefits, or have either end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS).  

Since many people are eligible to apply for Social Security benefits after age 62, they may already be receiving those benefits by the time they are eligible for Medicare. Those people are usually enrolled automatically and must opt out if they do not wish to participate in Medicare. 

To learn more about how you can apply to Medicare, click here. 

When does the coverage start? 

Medicare coverage starts depending on which enrollment period you enroll in. 

If you sign up for Medicare during your Initial Enrollment Period and qualify for Premium-free Part A, Part A coverage starts the month you turn 65. For Part B (and Paid-premium Part A), it depends on when exactly you apply for enrollment during this period. If you sign up:  

● Before the month you turn 65, coverage starts the month you turn 65;        

● The month you turn 65, coverage starts the following month; 

● 1 month after you turn 65, coverage starts 2 months after you sign up; 

● 2-3 months after you turn 65, coverage starts 3 months after you sign up; 

Coverage always starts on the 1st of the month.  

If you sign up during a Special Enrollment Period, generally, coverage starts the month after you sign up. 

If you sign up during the General Enrollment Period (January 1- March 31), your coverage starts July 1. 

To learn more details regarding when your Medicare coverage starts depending on eligibility or special circumstances, click here. 

Other Medicare options 

Since most people qualify for Part A at no cost, it is rare for people to opt out. But there are some circumstances when people choose not to enroll in Medicare. Some people with a Health Savings Account (HSA) decide to delay receiving Social Security benefits and Medicare. 

Most people pay a premium for Part B. But if you are still working and want to continue using your employment-based insurance, you can delay enrolling in Part B. You must actively choose to delay Part B before your Medicare coverage starts to go this route. 

It is also possible to purchase your health insurance policy through the Affordable Care Act marketplace. But if you are receiving a subsidy for this type of insurance policy, you will no longer be eligible for that subsidy once you are eligible for Medicare.  

Some people who are former or active duty military can receive health insurance coverage through the Department of Veterans Affairs system or through TRICARE insurance. These insurance programs also often cover mental health services and some dental and vision care. Some people may have a copay. In addition, some TRICARE plans can require that participants enroll in Medicare Parts A and B.  

FAQs 

Is Medicare mandatory? 

Medicare is not mandatory. But individuals who are receiving Social Security benefits before their 65th birthday will automatically be enrolled in Medicare Parts A and B during their 65th birthday month. 

If you are 65 and still working, you are not obligated to sign-up for Medicare. Still, there are many benefits of applying for Medicare while working. Make sure to check in with your employer before your 65th birthday to understand your employment-based insurance requirements for Medicare. 

While Medicare is not mandatory, there is no upside in opting out of Medicare coverage. In fact, there can be a significant negative impact of opting out of Medicare. To learn more about the consequences of opting out of Medicare, click here. 

What is the difference between Medicare and Medicaid? 

Medicare and Medicaid are both government-sponsored programs that provide health coverage for Americans. Medicare provides federal health coverage for people aged 65 or older and people with certain disabilities or end-stage renal disease. Medicaid provides joint federal and state health care coverage for low-income adults, pregnant women, and children. 

To learn more about how Medicare and Medicaid differ, click here. 

To learn more about how Medicare and Medicaid can work together, click here. 

Is Medicare free? 

Medicare Part A (Hospital Insurance) is free for people with a minimum of 40 calendar quarters of work in any job where they paid Social Security taxes in the USA. It is also free for people eligible for Railroad Retirement benefits or with a spouse who qualifies for premium-free Part A. 

Medicare Part B (Medical Insurance) is not free. People pay a monthly premium for Medicare Part B. How much people pay for Part B premium is dependent on the income reported in previous years’ tax returns.  

Medicare Part D (Prescription Drug Coverage) is not free. People pay a monthly premium for a stand-alone plan.  

Questions about Medicare?

Shoot us an email at medicare@hihella.com.