In 1965, Congress created Medicare under Title XVIII of the Social Security Act to provide health insurance to people age 65 and older. President Lyndon Johnson signed the Medicare amendment into law. Prior to Medicare, only one-half of older Americans had health care insurance coverage. The percentage was much lower in minority groups. People under 65, receiving Social Security Disability Insurance, were granted Medicare coverage in 1972.
In 2006 Congress voted to separate the Medicare Part D Prescription Drug plans from the Medicare Supplements/Medigap policies. All eligible persons who do not receive creditable prescription drug coverage from another plan need to enroll in a Medicare Part D plan to avoid the late enrollment penalty.
Once a person is assessed a late enrollment penalty by Social Security Administration, the penalty follows you for your lifetime regardless of which carrier provides your Medicare Part D coverage. The late enrollment penalty is added to the premium you pay the insurance company for your Medicare Part D plan.
Currently, 44 million medicare beneficiaries (15% of the U.S. population) are enrolled in the Medicare program. Enrollment is expected to rise to 79 million by 2030. Only 1 in 5 beneficiaries relies solely on the Medicare program for health care coverage.
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Official Medicare Handbook
The official U.S. Government Medicare Handbook is available for download.
What are the different parts of Medicare?
PART A: Hospital Insurance
Part A has a $1,408 deductible (2020) per benefit period and 20% co-insurance. If you worked forty quarter hours you will have not have a Part A premium.
- Inpatient hospital care
- Inpatient mental health care
- Skilled nursing services
- Hospice care
- Some blood transfusion
PART B: Medical Insurance
Monthly premium and an annual deductible of $198.00 (2020) and 20% co-insurance.
- Physician services
- Outpatient hospital services
- Outpatient mental health
- Laboratory services
- Durable medical equipment (wheelchairs, oxygen, etc.)
- Outpatient physical, occupational and speech-language therapy
- Some preventative care
- Emergency room
PART A & B: Original Medicare
What is NOT Covered
- Medicare Part A and Part B deductibles, co-insurance, and premiums
- Medicare Part B excess charges (amount billed over what Medicare agrees to pay)
- Prescription drug coverage
- Addition benefits such as hearing, vision and dental.
- Long-term care or custodial care if that’s the only care you need. Most nursing home care is custodial care.
PART D: Medicare Prescription Drug Coverage
Medicare Part D helps to cover the cost of prescription drugs. Medicare Part D is run by private insurance companies, it may help lower your prescription drug costs, and may help protect against higher costs in the future. Part D plans may have premiums, deductibles, and co-pays based on the tier under which your drug is classified.
Medicare Supplements/Medigap Plans
Medicare recipients may opt to minimize their financial risk of being enrolled in only Original Medicare by purchasing a Medicare Supplement Plan. These insurance policies are standardized plans A – N regulated by CMS (Center for Medicare and Medicaid Services). Most premiums are paid on a monthly basis and rates/premiums are determined by the person’s age, zip code, and tobacco usage. Premiums increase annually.
PART C: Medicare Advantage Plans
Medicare Advantage comprises a variety of private health plans – most often PPO, HMO, HMO-POS, and MA only plans – that private insurance companies offer as another option to Original Medicare or Medicare Supplements. All Medicare Advantage (Part C) plans must cover all the same benefits that Original Medicare covers and more.
The monthly premium and plans available may vary by geographic region and the insurance provider.
Medicare Advantage Plans may include:
- Deductibles, co-pays and co-insurance of the Medicare approved amount.
- May require the insured to stay within the network, except in the case of an emergency, and you may need a referral to see a specialist.
- Most Medicare Advantage plans have an annual out-of-pocket maximum to help minimize the financial risk for a consumer.
- Many plans include prescription drug coverage at no additional cost.
- Many plans include extra benefits such as: Dental, Vision, Hearing, Nurse Hotline and Wellness Programs.
If you enroll in a Medicare Advantage health plan, you cannot, by law, also be enrolled in a Medicare Supplement/Medigap policy, or have coverage by a Union or other employer.
You may only be enrolled in one plan at a time.
Aetna • Anthem BC/BS • BC/BS of IL • GPM Life • GTL • Humana • Lumico • Mutual of Omaha • SilverScripts • UnitedHealthcare • United World • Wellcare
Choosing a Medicare health insurance plan can be complicated.