What Is Medicare?

Medicare is the most common form of health care coverage for seniors. The program provides a way for older Americans to have their health needs taken care of after they retire from the workforce.

The Medicare program was originally founded in 1965. At that time, what is now known as Original Medicare was created. The first major expansion to the program came seven years later, when people with disabilities or end-stage renal disease (ESRD) became qualified for coverage.

Part C was originally established in 1997 and was first known as the Medicare+Choice program. It took on its modern form and was renamed as Medicare Advantage a few years later in 2003. Part D, prescription drug insurance, took effect starting in 2006.

The Medicaid program was founded at the same time as Medicare. Medicaid was originally created to provide insurance to those who needed cash assistance but has been expanded beyond that since. The program is separate from Medicare and exists today to provide health care to low-income Americans.

The basics of Medicare include both plans that are provided by the federal government and ones that are available through private insurers. Different types of plans can cover different parts of your health care.

Medicare is divided into four parts, named alphabetically from Part A through Part D.

Parts A and B are sometimes referred to as Original Medicare. Parts C and D are newer options. Generally, you can get coverage through Original Medicare or through Medicare Advantage plans if you qualify.

Medicare Advantage plans require that you live in the service area of the plan you want to join.

Original Medicare is provided through the federal government. Americans are typically eligible to enroll in Original Medicare when they turn 65. It is divided into Parts A and B, which each handle different parts of your health care.

It’s important to remember that Original Medicare does not cover everything, with notable areas like vision and dental coverage excluded.

Medicare Part A is hospital insurance. It covers the costs of a hospital or nursing facility stay, but does not cover long-term care. Each part will cover different types of services.

Part A does not cover the costs of treatments you receive while in the hospital. That falls under Part B.

Medicare Part B is medical insurance that covers doctor visits. It also covers the costs of what the Centers for Medicare and Medicaid Services (CMS) calls medically necessary services and preventative services.

Medically necessary services include supplies, tests or other services needed to diagnose and treat your medical condition. Preventative services include health care required to detect and treat a condition early on.

Medicare Advantage plans can sometimes include coverage for services that go beyond the scope of Original Medicare.

Medicare Part C is also called Medicare Advantage, a form of private insurance. Enrollment in Part C is voluntary.

These plans are sold through insurance firms that are contracted with the federal government. All Medicare Advantage plans must provide the same coverage as Medicare Part A and Part B, but other benefits vary from plan to plan.

Most Medicare Advantage plans also offer prescription drug coverage. Medicare Advantage plans may also bundle coverage beyond what Original Medicare plans cover and may include vision, hearing and dental coverage.

Medicare Advantage plans are provided regionally, so specific benefits and coverage available can vary based on where you live and the plans that are sold in your area.

Medicare Part D covers the cost of prescription drugs and is provided through private insurers. People who enroll in Part D pay a monthly premium. It covers the prescription drugs you buy at your local or mail-order pharmacy.

Most states have more than two dozen private insurers to choose from for Part D coverage. You can often receive prescription drug coverage through a Medicare Advantage plan, essentially combining Parts C and D.

You can also purchase a standalone drug plan to pair with Original Medicare. Different Part D plans come with their own formulary, and there may be some variety in what drugs they cover.

If you do not enroll in a drug plan or an Advantage plan with drug coverage, you will pay a penalty for the time that you did not have credible drug coverage.

A Medicare Supplement plan, commonly known as Medigap, is an additional coverage option to Original Medicare.

Medicare Part A and Part B only covers 80 percent of services. Adding a Medigap plan covers the remaining 20 percent, eliminating coinsurance or copayments as well as some additional out-of-pocket costs.

These policies are sold by private insurance companies. If you have Medicare Advantage, you cannot pair your coverage with supplemental insurance. Medigap is only meant to help with Original Medicare.

When comparing Medicare plans, one of the first things to determine is how much money you are willing or able to spend on your health care coverage. This can help you narrow down your initial options.

Medicare Advantage plans and Part D plans also come with a star rating system based on what they provide and how well they do. Be sure to take star ratings into account when choosing between plans.

It’s also important to continuously compare plans each year during enrollment periods. Coverage and plans available near you can change year to year, opening new and potentially better coverage options.

Most people are eligible for Medicare Parts A and B when they turn 65. But there are some exceptions. You will have to pay premiums for Part B.

You should sign up during your 65th birthday month or sometime in the three months before or after your birthday month. If you miss this window, you may face permanent financial penalties.

If you are eligible for Medicare — and already receiving Social Security benefits — you’ll be automatically enrolled in Medicare when you turn 65. Otherwise, you will have to manually enroll in Medicare on your own.

The best time to enroll in Medicare is when you first become eligible. You’ll enroll through the Social Security Administration. There are three options.

Most people also qualify for Medicare Parts A without having to pay premiums when they turn 65.

But if you or your spouse didn’t pay Medicare taxes while working, you may have to pay Part A premiums. But you have to be a U.S. citizen or legal permanent resident and 65 or older. In that case, you may be eligible to buy Medicare Part A coverage.

You can also qualify for premium-free Medicare Part A if you are under 65 and require dialysis or are a kidney transplant patient. People younger than 65 diagnosed with Lou Gehrig’s disease (ALS) also qualify the first month after they receive disability benefits.

There are several periods during which you can enroll in Medicare depending on your circumstances.

There are costs and fees associated with Medicare. These include premiums, deductibles and coinsurance. You may also pay penalties for waiting to enroll in Medicare Part B.

Most people don’t have to pay a premium for Medicare Part A because they paid for it through years of payroll taxes while they worked.

Medicare premiums are updated annually and depend on a variety of factors. Economic and political factors have a high influence on Medicare changes.

Medicare Parts A and B do not cover everything. Medicare Advantage plans may offer extra benefits that Original Medicare does not cover.

The most expensive thing Medicare Parts A and B does not cover is long-term care. Medicaid, another federal health insurance, will sometimes cover these costs, but generally only for low-income Americans with little or no savings.

Original Medicare can cover a wide range of treatments for several different conditions or ailments. The guiding principle for much of Medicare’s coverage is that a treatment considered a medical necessity should be covered.

Whether something is medically necessary can sometimes be up for interpretation, but there are several areas that Parts A and B can be counted on to provide coverage for.

Parts A and B can cover many treatments for several conditions if care for them is shown to be medically necessary. Also keep in mind that Medicare rarely covers the entire cost of a treatment. You may still have to pay a significant amount out of pocket depending on the type of care you are receiving.

There are some situations where Original Medicare can cover the diagnosis of a condition, but not necessarily treatment for it. For example, you would be covered for a bone density test to determine if you have osteoporosis, but drugs to treat it would only be covered if you had a Part D plan as well.

There are several different ways to get in contact with Medicare Customer Service if you have questions about your plan or want to resolve an issue.

Medicare can be reached by phone at 1-800-MEDICARE (1-800-633-4227) at any time of day. You can also contact Medicare by sending a letter by mail or by emailing them. When calling, make sure you have your Medicare card ready and a way to take notes or record the information you get.

You can call Medicare to resolve several issues, from cost and billing information to coverage or medical record questions.