Basics of Medicare

Posted on December 5th, 2023

Medicare is a federal health insurance program that started in 1966. It was first made available to people age 65 and over. Later, it was expanded to include people with certain disabilities and End-Stage Renal Disease/kidney failure.

How Medicare is Funded

Medicare Part A is mostly paid for by payroll taxes. Your paycheck should show that part of your earnings goes to FICA (the Federal Insurance Contributions Act). This helps make Medicare more affordable for everyone.

Medicare Part B is mostly paid for by general government funds and Medicare Part B premiums.

Choosing a Medicare Plan

It helps to understand a bit about Medicare in general. This section will answer the following questions: What types of plans are there? What do Part A, Part B, Part C and Part D mean? How do these parts work together? What about Medicare Supplement Insurance (also called Medigap)? Is that a type of Medicare coverage, too?

Parts A, B, C and D cover different health care costs.

Part A

Helps cover hospital care and services, including:

• Hospital stays
• Surgeries
• Nursing facility care
• Hospice care
• Some home health care

You may qualify for Part A without having to pay a monthly premium. If you don’t qualify, you may be able to buy Part A coverage.

Part B

Helps cover medically necessary and preventive services, including:

• Visits to doctors or other health care providers
• Yearly checkups
• Screenings
• Home health services
• Medical supplies and equipment

Part B requires you to pay a monthly premium based on your income.

Part C

Is generally known as Medicare Advantage. These plans usually offer the same coverage as Original Medicare (Part A and Part B). In addition, you may receive extra benefits such as:

• Prescription drug coverage (Part D)
• Dental coverage
• Vision coverage
• Hearing services
• OTC allowance
• Part B give back
• Fitness programs

You can purchase Part C (Medicare Advantage) plans from private insurance companies.

Part D

Optional prescription drug insurance. It helps cover the costs of prescription drugs.

You can buy Medicare Part D from private insurance companies. It is also available as part of certain Medicare Advantage plans.

Medicare Supplement or “Medigap”

Medicare Supplement plans are available from private insurance companies. They help cover some costs that Original Medicare doesn’t. This can include deductibles, copays and coinsurance. These plans work with Original Medicare or stand-alone Part D plans. They do not work with Medicare Advantage plans.

What to Consider When Choosing Medicare Coverage

Once you understand general Medicare coverage, it’s time to consider your personal situation. Here are a few of the questions to keep in mind when choosing your Medicare Plan.

• How often do you travel?
• Do you see your doctor once a year for your annual checkup?
• Do you need to see specialists?
• Do you expect to be in the hospital for surgery?
• Could you need outpatient surgery?
• Do you take prescription medications? If so, do you take specialty medications (things like insulin)?
• Do you have a chronic condition that puts you at risk for needing more care?
• Do you have a limited income?
• Do you know if you qualify for Medicaid or any low income assistance?
• Do you receive Medicaid or disability benefits for a chronic condition or disability?
• Do you need dental, hearing, or vision coverage?