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New to Medicare Series: Part 1

Medicare 101

Original Medicare is the federal health insurance program for people age 65 and older and younger people with certain disabilities or medical conditions.

Most people become eligible to enroll in Medicare three months before their 65th birthday, but some people qualify sooner if they meet certain qualifications.

Eligibility

If you are a U.S. citizen or permanent legal resident for at least five continuous years, you may be eligible for Medicare if one or more of the following applies to you:

  • You are 65 years or older and are eligible for retirement benefits through Social Security
  • You are 65 years or older and are eligible for retirement benefits through the Railroad Retirement Board
  • You have end-stage renal disease (ESRD) and require dialysis treatment or a kidney transplant
  • You have ALS (also known as Lou Gehrig’s disease)
  • You have been receiving certain disability benefits for at least 24 months

The Parts of Medicare

Original Medicare is made up of two parts: Medicare Part A and Medicare Part B, and is managed and administered by the federal government.

Most Medicare beneficiaries have the option to sign up for an alternative to Original Medicare — Medicare Part C (Medicare Advantage). Medicare Advantage plans may provide coverage for prescription drugs and some other benefits that Original Medicare doesn’t offer.

People who are enrolled in Medicare Part A and Part B, or people who are enrolled in a Medicare Part C plan that does not provide prescription drug coverage, have the option to enroll in Medicare Part D (Medicare Prescription Drug Plan).

Learn more about these parts of Medicare below.

Medicare Part A

Medicare Part A is hospital insurance. Medicare Part A helps cover:

  • Inpatient care in hospitals
  • Hospice care
  • Skilled nursing facility care
  • Limited home health care

Beneficiaries do not pay a premium for Part A if they paid enough Medicare taxes while working. If you must pay a premium for Part A, you’ll pay $422 a month in 2018.

Medicare Part B

The second part of Original Medicare is Medicare Part B (medical insurance). Enrolling in Medicare Part B is optional, but if you don’t sign up when you’re first eligible and choose to get it later, you may pay higher premiums.

Medicare Part B helps cover services such as:

  • Outpatient care
  • Home health care
  • Durable medical equipment
  • Doctor’s services
  • Preventive services

In 2018, the standard Part B premium is $134 per month. Unlike Part A, most people pay a premium for Part B. You could pay more or less than the standard premium depending on your Social Security status or your income.   

Original Medicare Out-of-Pocket Costs

Typically, Medicare Part B pays 80% of Medicare covered services once your deductible is met, and you pay 20%. Two other common Medicare out-of-pocket costs are listed below.

In 2018 the Part A deductible is $1,340 per benefit period.

Part A benefit periods are based on how long you’ve been discharged from the hospital. A benefit period under Medicare Part A begins the day you’re admitted to the hospital and ends when you’ve been discharged for at least 60 days. If you’ve been out of the hospital for more than 60 days and are admitted again, a new benefit period begins. You could potentially be required to meet your Part A deductible multiple times in a given calendar year.

In 2018 the Part B deductible is $183 per year.

To learn more about your Medicare out-of-pocket costs, read through another guide in this series, “Understanding Your Medicare Out-of-Pocket Costs.”

Enrolling in Original Medicare

You will likely be automatically enrolled in Original Medicare if any of the following applies to you:

  • You get benefits from Social Security or the Railroad Retirement Board at least four months before you turn 65
  • You have ALS and receive disability benefits
  • You’ve been getting disability benefits from Social Security or the Railroad Retirement Board for 24 months

If you aren’t automatically enrolled in Medicare, you must manually enroll by doing one of the following:

  • Visiting the Social Security Website at www.SocialSecurity.gov
  • Visiting your local Social Security office
  • Calling Social Security at 1-800-772-1213 (TTY users 1-800-325-0778), Monday through Friday 7AM-7PM
  • Contacting the Railroad Retirement Board at 1-877-772-5772 (TTY users 1-312-751-4701), Monday through Friday 9AM-3:30PM (if you worked for a railroad)

The best time to manually enroll in Medicare is during your Initial Enrollment Period. Your Initial Enrollment Period begins three months before your 65th birthday and ends three months after your 65th birthday. If you do not enroll in Medicare during your Initial Enrollment Period, you may pay more

For more information about the different Medicare enrollment periods, read through our guide, “Your Guide to Medicare Enrollment Periods.”

Medicare Part C

Medicare Part C (Medicare Advantage) is sold by private insurance companies as an alternative to Original Medicare. Every Medicare Advantage plan must provide at least the same benefits as Medicare Part A and Part B (aside from hospice care, which you still receive from Medicare Part A), and many provide additional benefits such as:

  • Prescription drug coverage
  • Dental coverage
  • Vision and hearing coverage
  • Health and wellness program benefits

To enroll in Medicare Advantage, you must be enrolled in Original Medicare and live in the Medicare Advantage plan’s service area.

With Medicare Advantage you’ll still pay your Part B premium. Some Medicare Advantage plans have monthly premiums that you pay in addition to your Part B premium, and some do not.* Medicare Advantage premium amounts and out-of-pocket costs will vary by plan.

Medicare Part D

Original Medicare does not provide coverage for prescription drugs. If you have Original Medicare and need prescription drug coverage, you may enroll in a Medicare Prescription Drug Plan (Medicare Part D). If your Medicare Advantage plan doesn’t include drug coverage, you may also join a drug plan.

Medicare Part D is sold by private insurance companies and plan costs and coverage will vary. To get the best price on a Medicare Prescription Drug Plan, we recommend enrolling as soon as you’re eligible for Medicare.

Learn More

Understanding your Medicare coverage doesn’t have to be complicated. Our series of guides was created to help ensure you have all the information you need before, during and after you enroll. To learn more, read through some of our other guides below or speak with a licensed insurance agent.

New to Medicare Series

Part 1: Medicare 101

Part 2: Glossary of Medicare Terms

Part 3: Understanding Your Medicare Out-of-Pocket Costs

Part 4: Your Guide to Medicare Enrollment Periods

Part 5: What Every Medicare Beneficiary Should Know About Their Medicare Card

Part 6: What Original Medicare Covers

Part 7: Exploring Your Medicare Options


*You must continue to pay your Part B premium. $0 premium plans may not be available in all areas.

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