Understanding How Medicare Works

If you’re new to Medicare, read on for an easy-to-understand guide about how coverage works and the basics about choosing a plan that is right for you.

The Essential ABCs (and D!) of Medicare

When you turn 65, you become eligible for certain medical benefits from the government, known as Medicare Part A and Medicare Part B (also known as Original Medicare). But you can also choose private Medicare coverage, known as Medicare Part C (also known as Medicare Advantage plans). Finally, you can opt for Part D prescription drug coverage that is added to Original Medicare. [Source]. Here’s what you need to know about how Medicare works:

Part A

Part A - Hospital Coverage

Most people who qualify for Medicare automatically get Part A coverage without having to pay a premium. Part A mainly includes inpatient hospital care, skilled nursing facility care, and home health care after a hospital stay.

Part B

Part B - Medical Coverage

Part B covers your medically necessary doctors’ services, outpatient care, and other certain items and services (such as durable medical equipment). A premium for Part B is generally deducted from your Social Security check each month to help pay the cost of this coverage.

Medicare Parts A and B are often referred to as “Original Medicare.”

Part C

Part C - Medicare Advantage Plans

You have the option to join a Part C plan instead of Original Medicare. This coverage is provided by a private health plan called a Medicare Advantage (MA) plan. These health plans are contracted with and approved by Medicare to care for you. The coverage includes everything covered under Part A and Part B, except hospice care (original Medicare continues to cover hospice care). Often, the plans include Part D prescription benefits as well. The MA plans may also include additional benefits not available with Original Medicare, such as vision care, gym membership, dental care, and more. The type and scope of supplemental benefits vary by plan and in certain cases, members may need to use doctors in the plan’s network in order to obtain covered benefits.

Part D

Part D - Prescription Drug Coverage

If you join a Part D plan, it can help lower your prescription drug costs that are not covered by Medicare. Part D is an extra plan provided by private insurance companies approved by Medicare. This coverage is available as a stand-alone plan that you add to your Original Medicare coverage. A Part D plan may be included in a Medicare Advantage plan.

To learn more and have your questions answered, you may contact your local licensed insurance agent, review the Medicare & You handbook and/or call 1-800 Medicare. You may also find it helpful to attend an upcoming no-cost Medicare session taught by local, licensed, independent Medicare agents.

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How to Choose Medicare Coverage Based on Your Health Needs

Before you enroll in a Medicare plan, think about your health needs and budget, and compare your options. Here are a few insights to help:

Original Medicare

Part A and Part B do not cover 100% of your medical and hospital costs. Like some other health insurance coverages, you may be required to meet a deductible and then may require you to pay a portion of the cost of your care (depending on the services). Original Medicare also does not provide coverage for prescription drugs. For this, you need a stand-alone plan that may charge an additional monthly premium. In some instances, you may have Medicaid, military retiree, or employer or union coverage that pays some or all of the costs that Original Medicare.

Medicare Supplemental Coverage

As a Medicare-eligible person, you will likely need and use a combination of Original Medicare and Medicare Supplemental Coverage (also known as Medigap), depending on your health. This coverage can help pay for expenses like copays and other out-of-pocket costs that Original Medicare does not cover. Private insurance companies offer these plans and set their own prices for coverage. This coverage could require an additional monthly premium.

Medicare Advantage Plan

A Medicare Advantage plan (also referred to as Medicare Part C) includes all the healthcare benefits you are entitled to under Original Medicare and may also include coverage like vision, hearing, dental and prescription drug coverage, or over-the-counter supply allowances. Certain MA plans may cover you for costs only with providers within the plans’ networks and may charge additional premiums and/or other out-of-pocket costs (depending on the particular plan). Medicare Advantage plans have a yearly limit on what you would pay out of pocket for services. Once you reach that limit, you pay nothing for the care provided under Part A and Part B. Medicare Advantage plans can, however, choose not to cover the costs of services that are not medically necessary under Medicare. Medicare Advantage plans contract with the government to provide coverage to you, so you still have Medicare, but you don’t need to use your Medicare card when you obtain medical services. You will present an insurance member card instead.

To understand more about Medicare and have your questions answered, you may find it helpful to attend an upcoming no-cost Medicare session taught by local, licensed, independent Medicare agents. 

Medicare Options and Important Dates

It may be time to enroll in Medicare or explore your Medicare options. There are specific dates to keep in mind about when to enroll. Learn more.

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Independent, licensed insurance agents work with Medicare enrollees to explain Medicare Supplement Insurance and Medicare Advantage and Medicare Prescription Drug Plan options offered by organizations contracting with Medicare. Independent, licensed agents may not offer every plan available in your area. Any information they provide will be limited to those plans that they offer in your area. For a complete listing of available Medicare plans, please contact 1-800-Medicare (TTY users should call 1-877-486-2048), 24 hours a day, 7 days a week, or consult Enrollment in any Medicare plan depends upon contract renewal. For accommodations of persons with special needs at meetings, call (763) 290-6385 (TTY 711).

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