What is Medicare?

Medicare is a government-sponsored health insurance program managed by the Centers for Medicare & Medicaid Services (CMS). It helps cover essential medical expenses, reducing the financial burden on seniors and qualifying individuals. Unlike Medicaid, which is based on income, Medicare is primarily based on age and work history.

Medicare consists of different parts, each designed to cover specific healthcare services. These include:

  • Part A (Hospital Insurance)

  • Part B (Medical Insurance)

  • Part C (Medicare Advantage)

  • Part D (Prescription Drug Coverage)

  • Medicare Supplement Plans (Medigap)

Medicare Part A: Hospital Insurance

Part A covers inpatient hospital care, skilled nursing facility (SNF) care, hospice care, and some home health services. It is often referred to as "hospital insurance."

What Part A Covers:

  • Hospital Stays: Covers semi-private rooms, meals, nursing care, and necessary hospital services.

  • Skilled Nursing Facility (SNF) Care: Covers short-term rehabilitation services if you meet specific conditions.

  • Hospice Care: Covers palliative care for terminally ill patients, including pain relief and symptom management.

  • Home Health Services: Covers part-time skilled nursing care, therapy services, and durable medical equipment when prescribed by a doctor.

Costs of Part A:

Most beneficiaries do not pay a premium for Part A if they or their spouse paid Medicare taxes for at least 10 years. However, there are out-of-pocket costs such as deductibles and coinsurance for hospital stays beyond a certain number of days.

Medicare Part B: Medical Insurance

Part B covers outpatient care, preventive services, doctor visits, and medical supplies. It is considered "medical insurance."

What Part B Covers:

  • Doctor Visits: Covers consultations, check-ups, and specialist visits.

  • Preventive Services: Includes screenings, vaccinations, and wellness visits.

  • Outpatient Services: Covers diagnostic tests, X-rays, and lab work.

  • Medical Equipment: Covers wheelchairs, oxygen equipment, and prosthetics.

Costs of Part B:

Part B requires a monthly premium, which is based on income. For most individuals it costs $185 per month in 2025. It also includes an annual deductible and coinsurance, where beneficiaries typically pay 20% of approved costs after meeting the deductible. There is no limit to that 20%.

Medicare Part C: Medicare Advantage

Part C, also known as Medicare Advantage, is an alternative to Original Medicare (Parts A and B). These plans are offered by private insurance companies approved by Medicare.

What Part C Covers:

Medicare Advantage plans must cover everything Original Medicare covers, but they often include additional benefits such as:

  • Vision, Dental, and Hearing Coverage

  • Prescription Drug Coverage (most plans include Part D)

  • Wellness Programs

  • Out-of-Pocket Maximums (which Original Medicare does not have)

Costs of Part C:

Costs vary by plan and provider. Some plans have low or $0 monthly premiums, but they may have different copayments, coinsurance, and network restrictions.

Medicare Part D: Prescription Drug Coverage

Part D provides coverage for prescription medications. It is offered through private insurance companies that contract with Medicare.

What Part D Covers:

  • Generic and Brand-Name Drugs

  • Formulary (Approved Drug List) Coverage

  • Tiered Pricing System (lower-cost generics and higher-cost brand-name drugs)

Costs of Part D:

Costs depend on the plan chosen. Beneficiaries typically pay a monthly premium, an annual deductible, and copayments or coinsurance based on their prescription tier.

Medicare Supplement Plans (Medigap)

Medigap plans are supplemental policies that help cover out-of-pocket expenses associated with Original Medicare (Parts A and B).

What Medigap Covers:

  • Deductibles, Copayments, and Coinsurance

  • Foreign Travel Emergency Coverage (in some plans)

  • Extended Hospital Stays

Costs of Medigap:

Medigap policies have monthly premiums, and costs vary by provider and coverage level. These plans are standardized and labeled from Plan A to Plan N.

Who is Eligible for Medicare?

You are eligible for Medicare if you meet one of the following criteria:

  • You are 65 years or older and a U.S. citizen or legal resident who has lived in the U.S. for at least five years.

  • You are under 65 and have a qualifying disability (after receiving Social Security Disability Insurance (SSDI) for 24 months).

  • You have End-Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS, also known as Lou Gehrig’s disease).

How to Enroll in Medicare

Automatic Enrollment:

  • If you are receiving Social Security benefits, you are automatically enrolled in Medicare Parts A and B when you turn 65.

Manual Enrollment:

  • If you are not receiving Social Security benefits, you must sign up for Medicare through the Social Security Administration (SSA) website, by phone, or in person.

Medicare Enrollment Periods

There are specific times when you can enroll in or change your Medicare coverage:

  • Initial Enrollment Period (IEP): A 7-month period starting three months before you turn 65 and ending three months after your birthday month.

  • General Enrollment Period (GEP): From January 1 to March 31 each year for those who missed their IEP.

  • Special Enrollment Period (SEP): Available for individuals who qualify due to specific life events, such as losing employer coverage.

  • Medicare Advantage Open Enrollment Period: From January 1 to March 31, allowing Medicare Advantage enrollees to switch plans or return to Original Medicare.

  • Annual Enrollment Period (AEP): From October 15 to December 7, allowing beneficiaries to make changes to Medicare Advantage or Part D plans.

Conclusion

Medicare is an essential program that provides healthcare coverage to millions of Americans. Understanding its various parts, enrollment process, and coverage options ensures that beneficiaries can make informed decisions about their healthcare. Whether choosing Original Medicare with a Medigap plan or opting for a Medicare Advantage plan, it’s important to assess individual healthcare needs and budget to select the best coverage.

For personalized assistance, working with a Medicare insurance broker, such as Darko Bozic in Cleveland, OH, can help navigate the options and ensure you get the right plan for your needs. Please give us a call at (440) 537-0518