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Medicare is a federal health plan. It was started in 1965 and first made available to people age 65 and over. It was then expanded to include people with certain disabilities and End-Stage Renal Disease/kidney failure. Medicare is broken up into parts that cover various types of care and services:
- Part A (Original Medicare) covers hospital care and services.
- Part B (Original Medicare) covers medical care and services, including preventive care.
- Part D provides coverage for prescription drugs.
- Part C is also called Medicare Advantage. These plans combine Part A and B (and often Part D prescription drug coverage) into a single convenient plan.
- Medicare Supplement (also known as Medigap) helps cover some of the costs that Original Medicare doesn’t.
Video: How Does Medicare Work?
This 2-minute video explains the Medicare coverage options available, and the differences between them.
What is the purpose of Medicare?
Medicare’s purpose is to provide national health coverage to the following:
- Older adults, age 65 and over. This has been a traditional retirement age, when health insurance coverage through an employer might typically end. Medicare provides health coverage at a time of life when health care and prescription costs often increase.
- People with certain disabilities, or End Stage Renal Disease. The purpose is to provide health coverage to those unable to work due to disability or kidney failure and therefore unable to get health coverage through an employer. Medicare ensures affordable access to care and services that could otherwise be costly.
What are the main types of Medicare coverage?
In understanding the basics of Medicare, it’s important to learn the different types of Medicare coverage and what they generally offer:
- Original Medicare is a fee-for-service health plan that has 2 parts: Part A (Hospital Insurance) and Part B (Medical Insurance). You can go to any doctor, supplier, hospital, or other facility that accepts Medicare, and is accepting new Medicare patients.
- Medicare Advantage, also known as Part C, is a type of Medicare plan offered by a private company, like Cigna. These plans provide you with all your Medicare Part A and Part B benefits and may include plan extras not offered by Original Medicare.
- Medicare Part D Prescription Drug Coverage provides optional prescription drug coverage to anyone with Medicare. Private companies, like Cigna, offer this as a standalone Part D plan or with select Medicare Advantage Plans.
- Medicare Supplement (also known as Medigap) insurance includes plans offered by private companies like Cigna1. Plans help cover costs that Original Medicare doesn’t, including deductibles, copays, and coinsurance.
What are the basics of Medicare?
Here’s a quick overview of what each part of Medicare covers and how they work together:
Part A and Part B (Original Medicare) is the federal government’s Medicare program:
- Part A covers you for hospital care and services. This includes inpatient hospital stays, surgeries, and more.
- Part B covers two types of services: medically necessary services (services or supplies needed to diagnose or treat a medical condition), and preventive services (health care to prevent illness or detect it in an early state, including doctors’ visits, preventive care, ambulance, and durable medical equipment).
- Original Medicare works with:
- Medicare Supplement Plans
- Standalone Part D Prescription drug plans
- Or, use it alone with no additional coverage
Medicare Advantage Part C is part of the government’s Medicare program, but is offered and managed through private insurers like Cigna.
- Includes Part A hospital and Part B medical coverage
- Part D prescription drug coverage is usually included
- Other coverage may include some basic dental, vision, and hearing depending on the plan and insurer you choose.
- Part C works with:
- Standalone Part D Prescription drug plans (if they are not already included as part of the Part C plan or cannot be included due to certain types of plan designs)
Medicare Part D Prescription Drug Coverage is part of the government’s Medicare program, but is offered and managed through private insurers like Cigna.
- Part D plans cover costs for various types of prescription drugs, depending on the plan you choose.
- Part D works with:
- Original Medicare (Part A and B)
- Medicare Supplement policies
- Many Medicare Advantage plans come with some prescription coverage already included
What are the basics of Medicare Supplement Insurance (Medigap)?
Medicare Supplement Insurance is not part of the federal government’s Medicare program. These policies are sold through private insurers like Cigna and designed to help cover some expenses not covered by Original Medicare:
- Helps pay Part A and sometimes Part B annual deductibles
- Helps pay copays, coinsurance and other out-of-pocket costs you may owe for services
- Medicare Supplement works with:
- Original Medicare, alone
- Original Medicare plus Part D Prescription Drug plan
How does Medicare work?
Signing up for Medicare: When you turn 65 you must choose either to sign up for Original Medicare (Parts A and B) or a Medicare Advantage Plan through a private insurer.
- You are eligible to sign up during the 3 months before the month in which you turn 65, during your birthday month, and through the 3 months that follow your birthday month. So you have 7 months in which to sign up for Medicare.
If you have End Stage Renal Disease or a chronic condition or disability for which you receive Social Security benefits, you would be eligible for Medicare, regardless of age.
Medicare annual open enrollment: Medicare Open Enrollment usually runs from October 15 to December 7, each year. During that time you can decide if you want to make any changes to your current Medicare coverage.
For example, if you signed up for Original Medicare when you turned 65, you may decide you want to try a Medicare Advantage plan instead, or vice versa.
Signing up for a Medicare Supplement Insurance policy (Medigap): If you are 65 or older and have signed up for Original Medicare then you may be eligible for a Medicare Supplement plan. These plans are not part of the federal government’s Medicare program and are sold exclusively through private insurers.
Open Enrollment is a 6-month period when you can buy any Medicare Supplement policy sold in your state, even if you have pre-existing health conditions. This period automatically starts on the first day of the month that you meet both of the following 2 criteria:
- You're 65 (or older) AND
- You’re enrolled in Medicare Part B (Medical Insurance)
You can apply for a Medicare Supplement policy any time during the year, however during your Open Enrollment period, you are guaranteed Medicare Supplement coverage. When applying outside of your Open Enrollment period, you may be subject to restrictions based on your previous health history or current medical conditions, and you could also be denied acceptance.
How much does Medicare cost?
Medicare is not free. The different types of Medicare each have certain out-of-pocket costs:
- Original Medicare Part A and Part B come with monthly premiums that vary from year to year, depending on your income level. Part A and Part B each has its own annual deductible, as well as copays and coinsurance for care and services. Learn more about Original Medicare
- Part C, or Medicare Advantage plans, often come with low or no monthly premiums, depending on the plan. You will pay copays for specialist doctor visits, some of the cost for other various services and care, as well as copays for prescriptions if included in the plan. Costs and coverage can vary.
- Part D prescription plans have a monthly premium, as well, and may also have a prescription deductible depending on the types of prescription drugs you need.
- Medicare Supplement plans have monthly premiums, which help pay some of the health care costs that Original Medicare doesn’t cover.
Where are you in your Medicare journey?
1 Insured by Cigna Health and Life Insurance Company, American Retirement Life Insurance Company, Loyal American Life Insurance Company or Cigna National Health Insurance Company. In Kansas and Pennsylvania, Medicare Supplement insurance policies are insured by Cigna National Life Insurance Company. American Retirement Life Insurance Company, Loyal American Life Insurance Company and Cigna Health and Life Insurance Company plans are not available to residents of Kansas or Pennsylvania.
Notice for persons eligible for Medicare because of disability:
In the following states, all Medicare Supplement plans are available to persons eligible for Medicare because of disability: California, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Kansas, Kentucky, Louisiana, Maine, Minnesota, Mississippi, Missouri, Montana, New Hampshire, Oregon, Pennsylvania, South Dakota, Tennessee, Vermont, and Wisconsin.
Tennessee Medicare Supplement Policy Forms
Plan A: CNHIC-MS-AA-A-TN; Plan F: CNHIC-MS-AA-F-TN; Plan G: CNHIC-MS-AA-G-TN; Plan N: CNHIC-MS-AA-N-TN.