What is Medicare and How Does it Work?

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Medicare is the federally funded health insurance program for 65 years old or older who have worked long enough to qualify. Medicare provides comprehensive coverage and access to many healthcare providers, hospitals, treatments, tests, and other benefits, much like private insurance.

This article will provide a basic overview of the Medicare program and what you need to know about the costs of your health plan. It will also cover how to sign-up for Medicare to take advantage of this important resource.

What Does Medicare Cover?

Medicare is a federal health program for seniors and certain individuals with disabilities. It covers some costs associated with healthcare services such as hospitalization, physician care, prescription drugs, and or even diabetic strips. In addition, Medicare provides health insurance to help pay for various Medicare Parts A and B.

Medicare Part A covers inpatient hospital costs, skilled nursing facility (SNF) costs, and certain out-of-pocket expenses (excluding the deductible) like medical equipment. In 2011, Medicare Part A cost $4,636 for a standard policy.

Medicare Part B covers physician services, outpatient care, durable medical equipment, and more. In 2011, Medicare Part B cost $96.40 for basic coverage.

Medicare Part C is also known as Medicare Advantage and is a version of the program administered by private insurance companies which offer extra benefits not covered by Original Medicare. As a result, some people choose this option over Original Medicare because it combines both Medicare Part A and Part B coverages.

Medicare Part D is the prescription drug coverage program run through private health insurance companies. The first step to getting coverage through Part D is to go on a three-month trial period for prescription drug plans, called the “initial enrollment period.”

What is the Basic Eligibility for Medicare?

Minimum Age

You need to be at least 65 years old by the time December 31st of the current year rolls in – This can vary depending on when you were born.

Work Requirement

You will also have to work at least ten out of the 15 years before your eligibility date. If you are a woman, you must prove that you have worked for at least ten years out of any 15 preceding years before your 65th birthday (with about three-quarters of recent years).

Health Condition

You will also need a health problem or condition that makes you eligible for Medicare. Two conditions can make you eligible. First, you must be 65 years or older and have been disabled for at least five continuous months or receiving Social Security disability benefits. A disabled child can also qualify for Medicare under some circumstances.

Exceptions

There are a handful of exceptions to the 10/15 rule. If you have AIDS or end-stage renal disease, you may be able to enroll in Medicare earlier. If you have Lou Gehrig’s disease, or amyotrophic lateral sclerosis (ALS), you may also be able to enroll early. End-stage renal disease patients must enroll within three months of their diagnosis, and some disabled workers can also enroll early.

What Isn’t Covered by Medicare?

Medicare does not cover food and housing. Medicare Part A covers only inpatient hospital care. Medicare Part B covers only services you get from a healthcare provider.

Also, Medicare does not cover the following: Nonprescription drugs and medicines (except insulin), Durable medical equipment that is not used for medical or diagnostic treatment. Cosmetic surgery, Home health care, and physical therapy except when prescribed by your doctor. Some long-term care services like nursing homes and home health care.

How To Enroll

Once you meet the minimum age, work requirement, and health qualification requirements, you have three options to enroll in Medicare. First, you can apply online or go to your local Social Security Office or a Medicare enrollment agency (Agency).

If you’re already receiving Social Security benefits (Social Security Disability, SSI, or Railroad Retirement), you will automatically be enrolled in Medicare when your disability begins.

Reevaluate Your Coverage

If you are already receiving Medicare and would like to reevaluate your current coverage options, contact your state’s Department of Insurance. They can help you compare Medicare plans’ options, benefits, and costs for people with different health needs.

Additionally, your local Social Security Office can also help you compare plan options and choose the one that is best for you.

The bottom line is that Medicare is an essential resource for seniors. Make sure you understand what is and isn’t covered to take full advantage of its benefits. If you have concerns about eligibility or coverage, contact your state’s Department of Insurance or Social Security office.

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