What is Medicare?

Medicare is available to U.S citizens or permanent residents aged 65 or older, those under age 65 with a qualified disability receiving SSDI benefits for at least 24 months, and people diagnosed with ALS or ESRD. As a health insurance plan provided by the federal government, it plays an important role in some coverage of medical costs.

Medicare is divided into different plans to help offer more choices in cost and coverage. Learn more about Medicare plans available to you.

Medicare Plans
Medicare Plan Description
Original Medicare A fee-for-service health plan that is divided into two parts. Part A (Hospital Insurance) and Part B (Medical Insurance). The insured is responsible for paying his or her share of coinsurance and deductibles after Medicare pays its share of Medicare approved amounts.
Medicare Part A Hospital insurance that covers inpatient hospital stays, home health, hospice and skilled nursing facilities (with the exception of custodial care).
Medicare Part B Medical insurance that covers services considered to be medically necessary. Those services include preventive care, doctor visits, durable medical equipment, emergency services, and outpatient services ( surgery, lab, X-ray, diagnostic tests, therapy and some injectable or infused drugs that cannot be self-administered.)
Medicare Advantage Plans (Part C) This plan is offered by Medicare approved private companies to those who qualify for Original Medicare. It is considered an “all in one” or “bundle plan.”

Also known as Part C, Medicare Advantage plans are required to provide the same benefits as Medicare Part A and B, but they may also cover additional benefits such as dental, vision, hearing, transportation, meals, wellness programs, and prescription drugs.

Medicare Part D (Prescription Drug Plans) Medicare Part D plans are prescription drug plans sold through private insurance companies. These plans are considered voluntary outpatient prescription drug coverage and approved by the federal government. They are designed for people primarily enrolled in Original Medicare (Part A and/or Part B). Two primary options are available:

  • Standalone: Purchased separately to supplement Original Medicare and some Medicare Advantage plans that do not include prescription drug coverage (PFFS or MSA).
  • Medicare Advantage with prescription drug coverage (MAPD): Part D is built into the Medicare Advantage plan.

While plans do vary in cost, deductibles, copays, and coinsurance, each plan must meet a standard level of coverage. All Medicare Part D plans have a formulary, which is a list of the medications covered under the plan. Many formulary lists use “tier levels:”

Medicare Supplement Plans (Part G) Commonly called Medigap plans, supplement plans help pay the remaining costs that Medicare doesn’t, such as coinsurance, copayments, and deductibles (excluding Part B deductible of $233 for 2022). A monthly premium does apply ranging from around $90 to several hundred dollars, depending on the private insurance carrier and zip code. Medicare supplement plans are only available with Original Medicare.
Medicare Advantage SNP Plans Special Needs Plans, or SNPs, are designed for people with specific conditions or characteristics by tailoring benefits, drug formularies, and provider choices to meet specific needs. Examples include plans designed for people with diabetes or other conditions, as well as plans tailored for people on state Medicaid programs. They may be offered as either HMO or PPO plans.
Medicare Advantage PPO Plans There are preferred networks of providers. Members have the option to choose out-of-network providers at a higher cost. No primary care physician or referrals for specialists are required, and prescription drug coverage is often available with this type of plan.
Medicare Advantage HMO Plans Typically requires staying in-network (except for emergency care) and requires having a primary care physician. Referrals are required for specialists, and prior authorizations may be required for certain treatments. In some cases, a point-of-service option is available that will provide flexibility with out-of-network services. This plan does have prescription drug coverage available.
Medicare Advantage PFFS Plans These plans generally allow members to receive services from any Medicare-approved provider and sometimes have a network of providers who have agreed to treat plan members. Members pay a higher cost if the provider does not agree to plan terms. No primary care physician or referral to specialists are required, and PFFS plans may include drug coverage or the member may purchase a standalone drug plan.
Medicare Advantage MSA Plans This is a high-deductible plan combined with a medical savings account (funded by Medicare). Members generally have no network or restrictions on which providers to use and can initially use their savings account to help pay for health care. They will have coverage through a high-deductible insurance plan once they reach their deductible. There is no drug coverage, so you can purchase a stand-alone PDP.

Find Medicare Plans in Your State

All Medicare plans must meet a minimum standard of coverage, but your choices will be determined by where you live. Availability of certain plans, as well as deductibles, premiums, and other out-of-pocket expenses will vary based on your state. Find your state on the map below to see what plans are available.

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Important Medicare Dates

You may automatically be enrolled in Original Medicare when you turn 65 if you’re receiving Social Security, or after receiving disability benefits for 24 months. Otherwise, you must sign up during your Initial Enrollment Period, General Enrollment Period, or Special Enrollment Period:

  • Initial Enrollment Period (IEP): Most people get Medicare Part A (Hospital Insurance) and Part B (Medical Insurance). The enrollment period starts three months before you turn 65, includes the month of your birthday, and ends three months after you turn 65. If you’re not already collecting Social Security benefits before your Initial Enrollment Period starts, you’ll need to sign up for Medicare online or contact the SSA.
  • General Enrollment Period: If you miss your IEP, you can sign up during Medicare’s General Enrollment period that runs from January 1 to March 31, and your coverage will start July 1.
  • Special Enrollment Period (SEP): Once your IEP ends, you may have the chance to sign up for Medicare during a SEP. You can sign up for Part A and or Part B during an SEP if you have special circumstances.
  • Open Enrollment Period: This period runs from October 15 to December 7. If you have already enrolled in a Medicare plan, you can use this time to enroll and change prescription drug plans or Medicare Advantage plans.
  • Medicare Advantage Open Enrollment: This period runs from January 1 to March 15. If you’re enrolled in a Medicare Advantage Plan, this is when you can change to another type of Medicare Advantage Plan or disenroll and return to Original Medicare.

How to Compare Medicare Plans

Overall cost Consider the total out-of-pocket costs of any plan you are considering. Some will have a monthly premium in addition to your Part B premium, while others will not. Deductibles, copayments, coinsurance, and maximum yearly out-of-pocket expenses will also vary, so it’s crucial to look at the whole picture to ensure that you have the lowest overall costs and don’t get any surprises down the road.
Flexibility Some plans will allow you more choice in providers than others. Original Medicare and Medigap plans have no specific networks outside of accepting Medicare fee schedules. Medicare Advantage and prescription drug plans work differently. PPO and PFFS plans will allow you to go to any provider you choose, although possibly at a higher cost, while HMO plans will have strict network requirements and require referrals to specialists. Before choosing a plan, make sure that your doctor and pharmacy are in-network with the plan and that you understand the plan’s requirements.
Quality Every year, CMS publishes star ratings for every Medicare plan based on the plan’s overall quality and performance. Plans are rated from 1 to 5 stars, with 5 being the highest. Be sure to ask about a plan’s star rating before enrolling, and if a 5-star plan is available in your area, you may be entitled to a special enrollment period that allows you to switch to it. Another thing to consider are the company reviews, financial stability and standards of premium increase.
Coverage Plans will offer a wide variety of benefits and coverage models. Be sure that all of your medications are listed on the plan’s formulary and that you know what they will cost under the plan. If you are considering a Medicare Advantage plan, you should know whether the plan offers additional benefits like vision, dental, and hearing coverage and how you receive those benefits. Original Medicare will cover 80% of medically necessary charges. Members are subject to out of pocket costs such as deductibles, coinsurance, and copayments unless they elect adding a medicare supplement. Many medicare supplements will get the remaining 20%, as well as, coinsurance, copayments and some deductibles. When considering a medicare supplement the plan letter determines the amount of coverage.

How to Enroll In Medicare

You may automatically be enrolled in Original Medicare when you turn 65 if you’re receiving Social Security or U.S Railroad Retirement Board benefits (at least four months prior to start), after receiving disability benefits for 24 months, have ALS or ESRD. Otherwise, you must sign up during your Initial Enrollment Period, General Enrollment Period, or Special Enrollment Period.

Read more about enrolling in Medicare:

Medicare Premiums

  • Medicare Part A Most people don’t have to pay a premium for Part A because they have worked and paid Medicare taxes. If you don’t qualify for premium-free, you can purchase Part A. Premiums are based on how long you or your spouse worked while paying Medicare taxes. Premiums per month will either be $274 or $499 for 2022 (penalties may apply if not purchased when you first become eligible for Medicare).
  • Medicare Part B You’ll have to pay a monthly premium for Part B, whether you have Original Medicare or a Medicare Advantage plan. In 2022, that is $170.10 for most people. If your annual income is higher than $91,000 for individuals or higher than $182,000 for joint income tax filers then premiums can range from $238.10 to $578.30. This amount is based on modified adjusted gross income from IRS tax returns two years prior from the current year and includes the standard monthly premium and an Income Related Monthly Adjusted Amount (IRMAA). (Penalties may apply if not purchased when you first become eligible for Medicare).
  • Medicare Advantage- (Part C) Plans may charge an additional premium in addition to Part B premiums, but zero-premium plans may be available depending on your zip code or area.
  • Medicare Part D If you purchase drug coverage you’ll pay a monthly premium. The national weighted average premium in 2022 is $33.37 per month.As with Medicare Part B if the annual income is higher an additional premium (Part D IRMAA) may apply. If you have a Medicare Advantage Plan with drug coverage the premium is included in the plan cost unless IRMAA applies. Depending on the state some plans can start as low as $7.50 and continue up from there. (Penalties may apply if not purchased when first eligible for Medicare).

Medicare Resources

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Insurance and health care consultant

Tammy Burns is an experienced health insurance advisor. She earned her nursing degree in 1990 from Jacksonville State University, obtained her insurance billing and coding certification in 1995, and holds a health and life insurance license in Alabama, Georgia, Iowa, Mississippi, and Tennessee. Burns is Affordable Care Act (ACA)-certified for health insurance and other ancillary, life, and annuity products. She maintains an active nursing license and practices private-duty nursing.

Burns’ background as a nurse, insurance biller and coder, and insurance consultant includes infectious disease, oncology, gynecology, phlebotomy, post operative, family medicine, geriatrics, home health, hospice, human resources, management, billing, coding, claims, fixed annuities, group and individual health and life products, and Medicare. She’s always been driven by a desire to help people, spending more than 25 years as a practicing nurse in hospitals, private doctors’ offices, home health, and hospice. As a nurse, Burns supported patients filing insurance claims with Medicare, Medicaid, and private insurance companies as well as responding to billing questions from confused patients.

Seeing firsthand how unsuspecting patients are frequently confused by an overly complex system they don’t understand led Burns to become an insurance agent and health care consultant, now helping people understand the medical system. Since becoming an insurance agent in 2013, she has worked with some of the largest and most reputable insurance carriers and agencies in the nation, and she has built a large and loyal clientele by way of her commitment to transparency and personalized service.