Medicare Overview

What is Medicare?

Medicare is a health insurance program for:

• people age 65 or older,

• people under age 65 with certain disabilities, and

• people of all ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant).

The Parts of Medicare

Part A Hospital Insurance - Most people don't pay a premium for Part A because they or a spouse already paid for it through their payroll taxes while working. Medicare Part A (Hospital Insurance) helps cover inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities (but not custodial or long-term care). It also helps cover hospice care and some home health care. Beneficiaries must meet certain conditions to get these benefits.  Medicare charges a deductible ($1632 in 2024) for inpatient hospital stays, once per 60 day period up to 5 times per year.

Part B Medical Insurance - Most people pay a monthly premium for Part B. Medicare Part B (Medical Insurance) helps cover doctors' services and outpatient care. The standard premium in 2024 is $174.70 (though people with higher incomes may pay more- known as Medicare part B IRMA. Google Medicare part B IRMA for an income chart.)

Part B covers outpatient medical care (like doctors offices, diagnostic testing and surgery) and other medical services that Part A doesn't cover, such as some of the services of physical and occupational therapists, and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary. Generally, Medicare charges an annual deductible ($240 in 2024) then will pay 80% of covered services. The patient's responsibility is 20%  with no annual maximum out of pocket limit.

Part D Prescription Drug Coverage - Some people will pay a monthly premium for this coverage, either as a free standing prescription drug plan or through a Medicare Advantage plan. This coverage is to help you lower prescription drug costs. Medicare Prescription Drug Coverage is insurance provided through private companies - beneficiaries choose the drug plan and pay a monthly premium. 

Like other Medicare Insurance, if a beneficiary decides not to enroll in a drug plan when they are first eligible, they may pay a penalty if they choose to join later. This is known as the Medicare part D late enrollment penalty. You can read more about how it works and how to avoid it here:  https://www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/part-d-late-enrollment-penalty

Part C (Medicare Advantage) and MediGap Plans (Medicare Supplement Insurance) -  View our additional pages on  choosing additional coverage to cover your out of pocket expenses with Medicare.

This information comes from www.medicare.gov and https://www.medicare.gov/basics/costs and https://www.medicare.gov/drug-coverage-part-d