4 things to know about Medicare:
- It’s a federal health insurance program.
- It covers senior citizens and people with disabilities.
- It comes in 4 parts: Parts A, B, C, and D.
- Parts A & B are funded by the government. Parts C & D are provided by private insurers.
Medicare is a federal program that ensures citizens who are disabled or 65 and older have affordable health care options. 57 million people are expected to enroll in Medicare in 2016, according to the most recent data from the Centers for Medicare and Medicaid Services (CMS).
There are four parts of Medicare: Part A, Part B, Part C, and Part D. Each part covers different services. Parts A & B are provided by the federal government and Parts C & D are provided by private insurers.
Medicare terminology can get a little confusing. The different parts are often referred to in the following ways:
- Parts A & B combined: Original Medicare
- Part C: Medicare Advantage
- Part D: Prescription Drug Coverage
Eligibility & Enrollment
In order to qualify for Medicare coverage, you must be at least 65 years old and a citizen (or permanent legal resident) of the United States. You also may qualify if you are under 65 and have a disability.
Most seniors will be enrolled in Original Medicare automatically. If not, applicants can apply during certain enrollment periods.
Each part of Medicare provides different health care benefits:
- Part A provides uniform hospital insurance benefits.
- Part B provides uniform medical insurance benefits.
- Part C provides the same benefits as Parts A & B, plus additional benefits depending on which plan you buy.
- Part D covers prescription drugs. Actual benefits vary depending on which plan you buy.
Part A is hospital insurance and is the first half of Original Medicare. It covers inpatient hospital stays, hospice care, and skilled nursing facility care.
More than 50 million people enrolled in Part A in 2012, according to CMS.
Part B is medical insurance and is the second half of Original Medicare. It covers outpatient hospital care, preventative care, doctors services, and other services. You must have Part B to qualify for Medicare add-ons like Medigap and Medicare Advantage.
More than 90% of people who enroll in Medicare added Part B in 2012, according to CMS.
Part C (Medicare Advantage)
Part C is insurance that covers the same things as Original Medicare, but it is provided by private companies and usually includes additional benefits, such as prescription drug coverage, vision, dental, and wellness programs.
Part D is the Prescription Drug Coverage portion of Medicare. The plans are offered by private insurers and not the federal government. It is an optional add-on.