Medicare is a federal insurance program created to cover people age 65 years and older, as well as those with disability or end-stage renal disease. Medicare in general covers about 80% of your health care needs. Medicare has been subdivided into four main parts. These include:
Of note, ‘Original Medicare’ is a combination of Part A and Part B.
History
Medicare began in 1965 under the Johnson administration. The program instituted a national insurance coverage for people over the age of 65. Originally, Medicare only had Part A and B. Throughout the years as medical treatments have changed, so has coverage and eligibility.
During the George W. Bush administration, the Medicare Modernization Act (MMA) was signed into law. MMA allowed private insurance companies to enter the Medicare market and administer Medicare benefits, thus creating what is known as Medicare Advantage (Part C). The MMA Bill of 2003 also established prescription coverage, known as Medicare Part D, which went into effect in 2006.
More recently, Medicare Access and the CHIP Reauthorization Act passed in 2015. This act resulted in restrictions in the plans available to new enrollees starting January 2020.
Coverage
Part A (Hospital Coverage)
A brief summary of what Medicare Part A covers:
- Inpatient hospital stays
- Usually must be longer than 24-hour stay deductibles and copayments apply
- Skilled Nursing Care/Nursing Home Care
- Qualifications for skilled nursing care coverage:
- A minimum of a 3-night hospital stay prior to admission to nursing facility
- Nursing facility must be considered a skilled care facility
- Patients must be receiving some type of therapy (i.e.: physical/occupational therapy) or requiring assistance with medication
- Qualifications for skilled nursing care coverage:
NOTE: DOES NOT COVER
- Long term care stay (short-term recovery stays only up to 100 days)
- 24-hour home health care, home maker services, or meal delivery
Part B (Medical Coverage)
- Medically necessary care
- Any care needed to diagnose or treat a medical condition, including, but not limited to:
- Diagnostic tests
- Laboratory tests
- Durable medical equipment (DME)
- Ambulance services
- Any care needed to diagnose or treat a medical condition, including, but not limited to:
- Preventative services and screenings
- Annual exam appointments
- Colonoscopy
- Bone density screenings
- Mammograms
- Diabetes
- Depression
- Tobacco cessation
- Injections
- Shots and immunizations given on an outpatient basis are not always covered by Medicare. However, Medicare does cover some immunizations, including influenza vaccine and pneumococcal vaccines.
Part C (Medicare Advantage)
Part C coverage is offered by a private insurance company that contracts with Medicare.
- This type of coverage is NOT ‘Original Medicare’ (i.e. payments will come from the private insurer, not Medicare)
- At a minimum, it must offer the same basic Part A and Part B benefits
- Most Part C coverages includes prescription drug coverage
- Usually these coverages are setup with networks in the form of HMO, PPO, or PFFS
IMPORTANT NOTE: This is NOT ‘Original Medicare’ as it is network-based and the private insurer pays claims, not Medicare.
Part D (Prescription Drug Coverage)
Medicare Part D (prescription coverage) are managed by individual insurance companies that contract directly with Medicare. This coverage helps cover the cost of prescription medication and some vaccines.
Drug plans must offer the following:
- Two options for each therapeutic category
- Deductible and copayment /coinsurance apply
- Drug formularies differ from company to company
- Max out of pocket or catastrophic coverage included
IMPORTANT NOTE: Penalties apply if you do not enroll in Part D coverage when first eligible. Over the counter medications, vitamins, weight loss supplements, and hair growth medications are not usually covered.
Medicare Enrollment
There are 3 main enrollment times for Medicare.
Initial Enrollment Period
- This is the 3 months prior to the month you turn 65 and the 3 months following the month you turn age 65.
Special Enrollment Period
- Anytime lose coverage, either individual or group. Or move outside of the service area.
- You have 60 days or 2 mos. to join a Medicare plan.
General Enrollment Period
- The Medicare general enrollment period is from January 1 – March 31 of each year.
- Coverage from the general enrollment period won’t start until July 1 of the year you enroll.
Important note: Late fees and penalties apply to those who do not enroll when first eligible.
Frequently Asked Questions
Medicare Advantage (Part C) bundles your coverage through a private insurer, often with extra benefits like dental or vision. Medicare Supplement plans work alongside Original Medicare to cover out-of-pocket costs, offering more flexibility to see any provider that accepts Medicare and lower out-of-pocket costs.
It depends on whether your current coverage is considered “creditable” — as good as or better than Medicare’s standard. If it isn’t, you may face a late enrollment penalty if you add Part D later.
Part A is usually premium-free if you’ve worked and paid Medicare taxes for at least 10 years. Part B, has a standard premium set by Medicare each year. If your income exceeds limits, you may have a higher premium for Part B (IRMAA).
Yes — the Annual Enrollment Period (October 15 – December 7) lets you switch Medicare Advantage or Part D plans for the following year. Medicare Supplement plans can be changed year-round.
You can enroll directly through Medicare.gov or Social Security, but many people work with an independent broker to compare plans across carriers at no cost — since agent compensation comes from the carrier, not from you.