Understanding Medicare: A Brief Overview

Medicare is a federal program  that provides health insurance for Americans aged 65 and older or who meet certain disability standards. Medicare  offers many benefits, but it also  has limitations. The program  can be confusing to navigate, so this article will serve as your  introduction to understanding Medicare basics. 

Enrollment Period 

The first enrollment period an individual is eligible for is called the Initial  Enrollment Period. This period begins 3 months prior to the individual’s 65th  birthday and continues three months after. This enrollment period is important  not to miss as there could be penalties for late enrollment. 

Even if an individual chooses to continue employment after age 65 and is  covered under a group health plan, he or she should consult with a Medicare  agent to find out how to get the most out of coverage and avoid penalties. 

Original Medicare 

Original Medicare is made of Parts A and B.  

Medicare Part A is Medicare’s basic coverage of hospital services. Medicare Part  B covers outpatient services such as doctor visits, lab tests, and other diagnostic  procedures. 

Parts A and B combined will typically cover about 80% of medical expenses.

Additional Coverage 

Because there are many things that are not covered by Original Medicare, most individuals choose to enroll in additional plans. Individuals who want to obtain additional coverage will choose between Medicare Advantage and Medigap. 

Medicare Advantage 

Medicare Advantage is also known as Medicare Part C. Advantage plans bundle  Parts A and B together, pay for the 20% of expenses that Parts A and B don’t pick  up, and then offer additional benefits like dental, vision, and hearing, as well as  prescription drug coverage. 

Actual coverage will depend on the type of Medicare Advantage plan chosen.  There are some Part C plans that do not include prescription drug coverage and  there are many other limitations that must be considered. 

Medigap 

Medigap Plans are also known as Medicare supplemental plans. These plans  provide coverage for the 20% of expenses that are not covered by Parts A and B. 

Medigap Plans do not include dental, vision, and hearing, or prescription drug  coverage, so additional policies will need to be purchased. 

*It is important to note that while this brief description about the differences  between Medicare Advantage and Medigap Plans makes it seem like Advantage  Plans are the best choice, there are many other considerations.

Medicare Part D 

Medicare Part D consists of Prescription Drug Plans. As mentioned earlier, some  Medicare Advantage Plans have drug coverage included. If you have chosen to  pursue a Medigap plan, you will need to obtain a separate policy for prescription  drugs. 

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This article was a very short introduction to those just getting started on their  Medicare journey. For more information, consult with a Medicare agent or call  your Social Security Administration office. There is also great information online  at Medicare.gov. 

And, as always, John is here to help answer all of your Medicare and insurance  questions!