Introduction to Medicare

Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD).

Who qualifies for Medicare?

You qualify at age 65 or older if…

  • You are a US Citizen or permanent legal resident
  • You or your spouse have worked long enough to be eligible for Social Security or Railroad Retirement benefits
  • You are or your spouse is a government employee or retiree who has not paid into Social Security but has paid Medicare payroll taxes while working

You may qualify under age 65 if…

  • You have been entitled to Social Security disability benefits for at least 24 months
  • You have amyotrophic lateral sclerosis (Lou Gehrig’s Disease)
  • You receive a disability pension from the Railroad Retirement Board and meet certain conditions
  • You have end stage renal disease (permanent kidney failure)

What is the difference between Medicare Part A and B

Medicare Part A (Hospital Insurance) Medicare Part B (Medical Insurance)
Part A covers: Part B covers:
  • Hospital Stays
  • Skilled Nursing Care
  • Home Health Care
  • Hospice Care
  • Doctors’ Services
  • Outpatient Medical/Surgical Services
  • Diagnostic Tests
  • Outpatient Therapy
  • Most people don’t pay a monthly premium for Part A
  • Medicare Part B is Medial Insurance to cover medically necessary services like doctor visits and outpatient care.

How much does Part B cost?

Part B premiums

You pay a premium each month for Part B. Your Part B premium will be automatically deducted from your benefit payment if you get benefits from one of these:

  • Social Security
  • Railroad Retirement Board
  • Office of Personnel Management

If you don’t get these benefit payments, you’ll get a bill.

Most people will pay the standard premium amount. If your modified adjusted gross income is above a certain amount, you may pay an Income Related Monthly Adjustment Amount (IRMAA). Medicare uses the modified adjusted gross income reported on your IRS tax return from 2 years ago. This is the most recent tax return information provided to Social Security by the IRS.

The standard Part B premium amount in 2019 is $135.50. Most people will pay the standard Part B premium amount. If your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you’ll pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.

If your yearly income in 2017 (for what you pay in 2019) was

File individual tax return File joint tax return File married & separate tax return You pay each month (in 2019)
$85,000 or less $170,000 or less $85,000 or less $135.50
above $85,000 up to $107,000 above $170,000 up to $214,000 Not applicable $189.60
above $107,000 up to $133,500 above $214,000 up to $267,000 Not applicable $270.90
above $133,500 up to $160,000 above $267,000 up to $320,000 Not applicable $352.20
above $160,000 and less than $500,000 above $320,000 and less than $750,000 above $85,000 and less than $415,000 $433.40
$500,000 or above $750,000 and above $415,000 and above $460.50

 

You can elect to participate in a Medicare Advantage Plan Part C and Medicare Prescription Drug Coverage Part D or a Medicare Supplement (Medigap) Plan.

Medicare Advantage Plans

You can choose different ways to get the services covered by Medicare. Depending on where you live, you may have different choices. In most cases, when you first get Medicare, you are in the Original Medicare Plan. Or, you may want to consider a Medicare Advantage Plan (like an HMO or PPO) that provides all your Part A, Part B, and often Part D (Medicare Prescription Drug) coverage. You make a choice when you are first eligible for Medicare. Each year you can review your health and prescription needs and switch to a different plan during the annual enrollment period between October 15th and December 7th to be effective January 1st.

Medicare Advantage Plans are health plan options that are approved by Medicare but run by private companies. They are part of the Medicare Program, and sometimes called “Part C.” When you join a Medicare Advantage Plan, you are still in Medicare. As long as you have both Part A and Part B, items covered by Part A and Part B are covered whether you have the Original Medicare Plan, or you belong to a Medicare Advantage Plan (like an HMO or PPO).

Part D – Prescription Drug Coverage

Medicare Prescription Drug Plans are offered by insurance companies and other private companies approved by Medicare.

Medicare prescription drug coverage is insurance that covers both brand-name and generic prescription drugs at participating pharmacies in your area. Medicare prescription drug coverage provides protection for people who have very high drug costs or from unexpected prescription drug bills in the future.

Medicare Supplement (Medigap) Plans

A Medicare Supplement Insurance (Medigap) policy, sold by private companies, can help pay some of the health care costs that Original Medicare doesn’t cover, like copayments, coinsurance, and deductibles.

Some Medigap policies also offer coverage for services that Original Medicare doesn’t cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs. Then your Medigap policy pays its share.