ABCDs of Medicare
The Medicare program began in 1965, after generations of citizens and politicians worked to establish a national health care system for America's older population. This benefit is often referred to as "Original Medicare" or "Part A" and "Part B".
1972 - Medicare became available to people with disabilities and people with End-Stage Renal Disease/kidney failure
2003 - Additional legislation was signed to create Medicare Advantage plans (Part C) that replace and cover all of the benefits offered in Original Medicare Part A and Part B.
2006 - Prescription drug plans (Part D) also become available
Both Medicare Advantage and Medicare prescription drug plans are offered through private insurance companies and must be approved by Medicare.
- Original Medicare (Parts A and Part B)
Original Medicare is a fee-for-service plan, which means you can go to any doctor, supplier, hospital or other facility that is enrolled in and accepts Medicare, and is accepting new Medicare patients.
Part A - Hospital Care
Once you turn 65, you are automatically enrolled in Medicare Part A. Most citizens do not have to pay a premium for Part A because they or their spouse paid Medicare taxes while working.
Part A is the hospital insurance portion of Medicare. This benefit covers inpatient hospital stays, care in a skilled nursing facility, hospice care and some home health care.
If you don't automatically get premium-free Part A, you may be able to buy it if you (or your spouse):
- Are age 65 or older and entitled to (or are enrolling in) Part B and meet the citizenship or residency requirements.
- Are under age 65 and are disabled but no longer get premium-free Part A because you returned to work.
Part B - Medical Services
Part B is optional because you have to pay a monthly premium and satisfy a deductible before Medicare will pay benefits. The monthly premium is based on your income.
Part B provides many of the medically necessary services not covered in Part A. This includes coverage such as medical (doctor) services, outpatient care and other medical items. You'll also benefit from some covered preventive services.
Note: In some cases your premium may be higher if you didn't sign up for Part B when you first became eligible.
- Medicare Advantage plans (Part C)
Medicare Advantage plans - also known as Medicare Part C plans - provide all of your Part A (hospital) and Part B (medical) coverage and must cover all medically necessary services.
You must be enrolled in Medicare Part A and Part B to join. These plans are part of the government's Medicare program but they are offered and managed through approved private insurers, and may offer plan extras not found in Original Medicare.
There are various types of Medicare Advantage plans available - many of which you may find familiar such as HMO, PPO and Private Fee-for-Service plans.
In a Medicare Advantage plan, you will continue to pay the Part B premium and you may also have to pay the Medicare Advantage plan's premium. Like Part A and Part B, you will usually have to pay some out-of-pocket costs (such as copayments or coinsurance) for certain services but these amounts are generally lower than in the Original Medicare plans where you typically pay a percent (such as 20%) of the cost of the services you use.
- Your costs may be lower than in the Original Medicare Plan
- You may get extra benefits offered by the plan such as coverage for vision, hearing, dental and wellness programs, as well as special discounts on health-related items
- Prescription drug coverage may be included as part of the plan
- You don't need to buy a plan to supplement Medicare Part A and Part B (a Medicare Supplement plan)
- You still have all of the rights and protections offered through the Medicare program
- You may qualify for help paying for premiums
- Prescription Drug plans (Part D)
To round out your health care coverage, Medicare offers prescription drug plans for all eligible citizens. This is called "Part D." This benefit helps lower the cost of prescription drugs that can prevent complications of diseases and help keep you healthy. Part D plans are part of the government's Medicare program, but they are offered and managed through approved private insurers, like Cigna.
If you have Medicare Part A and/or Part B, you can enroll in a separate Part D prescription drug plan. Or you may choose to join a Medicare Advantage plan that includes drug coverage.
You must continue to pay Part B premiums and you may have to pay an additional premium for the Part D coverage. If you choose a Medicare Advantage plan that contains drug coverage, your premium will include the medical and drug portion of the plan.
Like traditional drug plans, your out-of-pocket costs will vary depending on which drugs you use, if there is a qualified generic alternative and if you take advantage of mail-order delivery. Cigna has Part D plans to meet your budget and prescription drug needs.
Note: In some cases your premium may be higher if you didn't sign up for Part D when you first became eligible
- Protection against high prescription drug costs
- Low premiums
- Choices of cost and benefit levels
- Easy to use
- Works with Medicare Part A and Part B, or may be included in a Medicare Advantage (Part C) plan.
Payment options for Medicare Part C and Part D
If the plan you select charges a premium, there are four ways to pay your Medicare Advantage plan and/or Medicare prescription drug plan premiums:
- You can have your premium automatically deducted from a savings or checking account, or charged to a credit or debit card.
- You can have the premium deducted from your Social Security benefit/check (if your monthly payment covers your premium).
- The insurer you choose for your plan(s) can send you a bill each month.
- Your employer (or prior employer) might pay for your Medicare benefits, so you pay little or no premium.
- When to enroll in or switch Medicare Part C and Part D plans?
There are strict rules that govern when you can join a Medicare Advantage (Part C) or Medicare prescription drug plan (Part D). Note: These rules may not apply if you are in a Medicare Plan sponsored by your employer.
You can join:
- When you first become eligible for Medicare (three months before the month you turn age 65 until three months after). There may be a financial penalty if you want to enroll later than when you were first eligible for Part B and Part D.
- If you get Medicare due to a disability, you can join from three months before to three months after your 25th month of cash disability payments.
- To switch plans, or if you didn't enroll when you were first eligible, you can enroll during the dates below and your coverage will begin on January 1st of the following year.
For the 2014 plan year, between October 15th and December 7th of 2013:
Please see below for extended enrollment/switch dates for Medicare Advantage plans.
In certain situations, you may be able to join a Medicare Advantage plan or Medicare prescription drug plan at other times. For example:
- if you move out of the service area of the plan you are in;
- if you have both Medicare and Medicaid;
- if you live in, or move into or out of an institution (like a nursing home); or
- if you have creditable prescription drug coverage and that coverage ends (you must enroll within 63 days of losing that coverage).
Special Exception for Medicare Advantage plans ONLY:
If eligible, you can join or switch Medicare Advantage plans from January 1 to February 14th of any year. If you are in a Medicare Advantage plan with prescription drug coverage, you could return to the Original Medicare plan, but you'd have to also join a Medicare prescription drug plan at the same time.
If you have questions about whether or not you can join or switch Medicare plans, call 1-800-MEDICARE (1-800-633-4227), (TTY/TDD users should call 1-800-325-0778).
- Help paying for Medicare
Medicare provides financial assistance for people who have limited income and resources. If you feel you may qualify, we encourage you to learn about the program and its eligibility requirements by visiting www.socialsecurity.gov on the web, or by calling the Social Security Administration at 1-800-772-1213. (TTY/TDD users should call 1-800-325-0778).
Looking for more information? Check out Medicare & You
Medicare & You is a publication developed by the Centers for Medicare & Medicaid Services, the federal agency that oversees Medicare. This informative publication can be found by visiting www.medicare.gov.