An Overview of Medicare

Millions of seniors in the United States rely on Medicare. Over 64.5 million individuals, as of late 2022, were eligible for Medicare, and each year that number typically rises.

What Is Medicare?

Medicare is the U.S. federal health insurance program for individuals who are 65 years old or older. Individuals younger than this with specific disabilities such as, amyotrophic lateral sclerosis, or permanent kidney failure can also qualify for Medicare. Medicare helps with healthcare costs, but it will not cover all medical expenses or most long-term care costs.

Medicare Part A (Hospital Insurance)

Part A helps pay the costs of hospital inpatient care or limited time in a skilled nursing center after a hospital stay. It will also pay for some hospice and home health care.

Medicare Part B (Medical Insurance)

Part B helps pay for services from:

• Healthcare providers
• Doctors
• Home health care
• Outpatient care
• Preventive services
• Durable medical equipment

Medicare Part D (Prescription Drug Coverage)

This is an optional benefit. Everyone with Medicare can get Medicare drug coverage and it will be included in your premium. Even if you are not currently using prescription drugs, you might want to consider joining Part D to avoid late enrollment penalty. This penalty can be expensive because it will continue to be charged monthly for the entire time you have this drug coverage.

Medicare Part C (All-in-One Coverage)

This is currently called the Medicare Advantage Plan. It includes all the services and benefits covered under Parts A and B, prescription medications, and extra benefits like hearing, vision, and dental combined together in a single plan.

Getting Started

Please keep in mind, if you turn 65 while still employed, do not sighn up for Medicare (Part A, B, or D) if you want to keep making contributions to your Health Savings Account (HSA).
You have multiple options when you first get started with Medicare. You will have some critical decisions to make too. Here are some steps to follow.

1. Enroll in Medicare Through Social Security
   
   If you are not receiving Social Security benefits and are older than 65 (or will be in the next three months), you will have the option to sign up for Medicare Parts A and B. You will not receive Medicare automatically.
   
   If you are already receiving Social Security benefits, you will receive Medicare Parts A and B automatically after you first become eligible, you will not have to sign up. You will receive a "Welcome to Medicare" packet from Medicare three months before turning 65 years old. Even though you will are automatically enrolled, you will still have additional actions to take that involve deadlines, so be sure you read through all of the packet's materials.
   
   If you reside in Puerto Rico, you will only receive Medicare Part A. You will have to sign up for Medicare Part B.
2. Select Your Coverage
   
   Individuals receive Medicare coverage in various ways. You will receive a lot of information that will help you choose your Medicare coverage, which is:
   • Your "Welcome to Medicare" packet that details your coverage options
   • An official "Medicare and You" handbook that you will receive after you are enrolled and each fall every year
   • Mail from private insurance providers, brokers, and agents marketing their Medicare plans
3. Complete the "Year One: Medicare Checklist"
   
   In your initial year with Medicare, you will want to follow this checklist to truly benefit from your Medicare coverage and ensure you are prepared in case of emergencies.

Benefits of Medicare

There are several benefits of Medicare, including:

• Medicare offers coverage to people who would not already have coverage. Because of the Medicare program, millions of older adults receive coverage when they would not have otherwise been able to afford it.

  Approximately nine million older adults were not receiving health coverage before Medicare was created in 1965. That number is substantially higher than the 508,000 uninsured seniors in 2018. Younger Americans with disabilities can also receive Medicare coverage.

• The founding of Medicare generated a huge market for drug companies. Over 39 million people in the U.S. suddenly had access to prescriptions they otherwise would not have had.
• Medicare comes with a cost effective monthly fee. Generally, individuals enrolling in Medicare qualify for free Part A, but they have to pay a small amount each month out-of-pocket for Part B.

Takeaway

As you can see, there are numerous benefits to enrolling in Medicare. Think about what the implications could be of not having Medicare. Older adults would find themselves having to pay high medical costs out of their own pockets. During our later years we tend to require more care so it is important to start financially planning ahead of time.
Medicare is helpful because it provides coverage to many individuals. When you enroll in a Medicare plan, you will want to understand the benefits offered and what's available.