Understanding Medicare

Medicare is a confusing topic that can spawn many questions. Generally, it is how many older Americans receive their health care in retirement. Medicare was created and provided by the federal government, is available to most Americans when they turn 65 and is designed to help cover their health care needs.

Original Medicare — the type provided by the federal government – consists of Parts A and B. Part A is hospital insurance and will cover your hospital stays, while Part B covers doctor visits, treatments and services.

Separate from Original Medicare is Medicare Advantage, also known as Part C. This type of coverage is provided through private insurers and must include everything Original Medicare covers. Plans often include additional benefits as well, like vision or dental coverage.

Part D prescription drug coverage is also available, either as stand-alone insurance to be paired with Original Medicare or as part of a Medicare Advantage plan.

If you are already drawing Social Security Benefits when you become eligible for Medicare, you will automatically be enrolled in Medicare. If you have not started receiving Social Security benefits, you will have to enroll in Medicare through the Social Security Administration.

But that’s the extent of Social Security’s involvement. Medicare is administered by the Centers for Medicare & Medicaid Services and there are many other distinctions between Medicare vs. Social Security.

Medicare coverage can change over time, with new areas of coverage being created through a determination process.

The term “Medicare for All” doesn’t necessarily apply to one thing, but has been used to describe several different bills and legislative movements over the last 20 years. The idea behind Medicare for All is to expand Medicare to the point that it acts as health insurance for all Americans, replacing the private health insurance industry.

There are obvious pros to the idea of blanket health coverage for all Americans, including greater access to care, fewer health expenses and no longer having to consider things like health coverage when changing jobs or careers.

But implementing Medicare for All could also be incredibly expensive and would represent one of the greatest upheavals ever undertaken by the federal government. It’s unclear if the idea of Medicare for All will ever become a reality.

Original Medicare is a government program that is provided through the federal government. You typically would have paid into this program by paying Medicare taxes while working, and it is available to most Americans when they turn 65.

Medicare Advantage, on the other hand, is provided by private insurance companies. These insurers contract with the federal government, and their plans must follow the same guidelines. A Medicare Advantage plan will always, at bare minimum, match all the coverage that is included in Original Medicare.

Part D prescription drug plans are also provided through private insurers. These plans can be sold as stand-alone options but are also often sold as part of a Medicare Advantage plan.

Coordination of benefits comes into play if you have some other form of health insurance that you are pairing with Medicare. When you have another health insurance option to go along with Medicare, one of your insurances will act as the primary payer.

This means that it will be up first to pay your health care costs, before leftover costs are then passed to your other insurance, which acts as the secondary payer. Remember that this does not mean the secondary payer will automatically pay the rest of your costs or out-of-pocket costs.

If your two health insurance options overlap in what they cover, they will not both pay for the treatment or service you are receiving. Whether Medicare is the primary payer depends on the specific situation and the other type of health coverage you have.

Once you have enrolled in Medicare, you can no longer put money into your Health Savings Account. If you continue to do so anyway, your deposits will be penalized. Keep in mind that you do not have to enroll in Medicare right when you turn 65 if you still have another form of health insurance.

Even though you can’t put money into your HSA anymore after you have Medicare, you can use the money already in your account to help pay for some of your out-of-pocket costs that are left over from your Medicare coverage.

Medicare Star Ratings are the easiest way for beneficiaries to compare their options among Medicare Advantage plans and Part D plans. The U.S. Centers for Medicare & Medicaid Services release the ratings each year, which compare private plans.

According to CMS, the ratings take into account the performance of the plan and the experiences of the people who are enrolled in it. Plans are rated on a five-star system with one star being the worst and five stars being the best.

The Star Ratings offer beneficiaries a simple way to see how different Medicare Advantage plans available to them are performing. But remember that what each plan offers also should play a role in your decision since coverage varies from plan to plan.

The Medicare Rights Center is a separate nonprofit organization. It can provide information and education to Medicare beneficiaries, helping them understand their plans, coverage, options and how Medicare works.

Beneficiaries who sign up for Medicare do have rights related to their coverage, and the Medicare Rights Center can help people understand what that means and how it pertains to their specific situation.

Medicare history began when the program was signed into existence in 1965 and began servicing beneficiaries not long after. The program has undergone several significant changes and expansions since it was first introduced.

The first major change came in 1972, when Medicare was first expanded to cover some Americans who are younger than 65 if they have certain disabilities. Today, Medicare is available to Americans who have ALS or end-stage renal disease regardless of their age.

Another massive change came just over 30 years later, when the Medicare Prescription Drug, Improvement, and Modernization Act was signed. This led to the creation of the modern take on Medicare Advantage plans, giving beneficiaries the option to receive coverage through private insurers.

Part D prescription drug plans became available in 2006.

The most recent update in Medicare history came in 2010 with the passing of the Affordable Care Act, which expanded Medicare coverage in some areas.

According to the Centers for Medicare & Medicaid Services, there were 64.9 million Americans enrolled in some form of Medicare in August 2022 — 46% of them in Medicare Advantage plans. That represents nearly 20% of all Americans.

Medicare enrollment has steadily grown throughout the last decade and continues to rise virtually every year.

The average beneficiary has 39 different Medicare Advantage plans available to them, a number that continues to climb each year.