Medicare basics

Medicare is the federal government program that gives you health care coverage (health insurance) when you are 65 or older, or under 65 with Social Security Disability Insurance, regardless of your income. Medicare Part A is free for those who have worked 40 “Social Security” quarters. Medicare Part B has a monthly premium, the cost of which is determined each year. To collect Social Security or to be eligible for Medicare, you must be a legal resident in the United States.

The Center for Medicare and Medicaid Services is the federal agency that oversees Medicare.

Medicare has four parts:

Part A covers inpatient services

Part B covers outpatient services

Part C includes Medicare advantage plans, and

Part D is prescription drug plans

Unless you make another choice about how to get your benefits when you become eligible for Medicare, you will have original Medicare, the traditional fee-for-service program. As long as the service you receive is a Medicare-covered service and your health care provider has not “opted out” of Medicare, you are covered to go to almost any doctor or hospital in the country.

People can also choose to get their Medicare benefits through a Medicare private health plan (Part C, and usually an HMO, PPO or Private Fee for Service). These plans, which are also called “Medicare Advantage” plans or Medicare Health Plans, must offer at least the same benefits as original Medicare, but can have different rules, costs and coverage restrictions. They often offer benefits that are not available from original Medicare. Everyone has a choice about how to get Medicare health benefits.

It is important to understand your Medicare coverage choices and to pick your coverage carefully. How you choose to get your benefits can affect your quality of care.

Everyone with Medicare receives a “red-white-and-blue” Medicare card. If you have traditional Medicare, you will show this card when you get services. If you choose to get your health benefits through a Medicare private health plan, you will still get a Medicare card but your private plan card is the one you will show your medical providers when you get services. No matter how you get your Medicare health benefits, keep the traditional/original Medicare card as proof of your Medicare eligibility.

Most Americans become eligible for Medicare when they turn 65. What you need to do to actually get Medicare depends on whether you are receiving Social Security retirement benefits or railroad retirement benefits.

If you are 65 and receiving Social Security retirement benefits or railroad retirement benefits, you will be automatically enrolled in both Medicare Part A and Part B. You do not need to contact anyone.

You will receive a package in the mail three months before your 65th birthday with your new Medicare card and a letter explaining how Medicare works and that you have been automatically enrolled in Medicare Part A and Part B. If you are receiving Social Security retirement benefits, your package and card will come from Social Security. If you get railroad retirement benefits, your package and card will come from the Railroad Retirement Board.

The letter will also explain that the monthly Part B premium will be automatically deducted from your Social Security check or railroad retirement check beginning the month your coverage begins. You will be given the option to turn down Part B.

Do not turn down Medicare Part B unless you have employer insurance from either your or your spouse’s current employment. If you do not have employer insurance and you turn down Part B, you may have to pay a hefty premium penalty when you do sign up. Retiree insurance or COBRA are not substitutes for Part B of Medicare.

Joining Medicare is your responsibility. If you are 65 and not yet signed up to receive Social Security retirement benefits or railroad retirement benefits, you can enroll in Medicare at Social Security, online at www.ssa.gov, by phone at 800-772-1213, or in person at your nearest local office.

8 things to consider when choosing or changing your coverage

Coverage: Are the services you need covered?

Your other coverage: If you have other types of health or prescription drug coverage, make sure you understand how that coverage works with Medicare. If you have employment-related coverage, talk to your benefits administrator, insurer, or plan before making any changes.

Costs: How much are your premiums, deductibles and other costs? How much do you pay for services such as hospital stays or doctor visits? Is there a yearly limit on what you could pay out of pocket for medical services? Make sure you understand any coverage rules that may affect your costs.

Doctor and hospital choice: Do your doctors accept the coverage? Are the doctors you want to see accepting new patients? Do you have to choose your hospital and health care providers from a network? Do you need to get referrals?

Prescription drugs: What are your drug needs? Do you need to join a Medicare drug plan? Do you already have creditable prescription drug coverage? Will you pay a penalty if you join a drug plan later? What will your prescription drugs cost under each plan? Are your drugs covered under the plan’s formulary (drug list)?

Quality of care: The quality of care and services given by plans and other health care providers can vary. See the “Resource Locator” at www.medicare.gov for more help comparing plans and providers.

Convenience: Does the plan include the doctors you see and the pharmacies you use? Can you get your prescriptions by mail? Do the doctors use electronic health records or E-prescribe?

Travel: Will the plan cover you if you travel to another state?

If you are in a Medicare Health Plan, review the Evidence of Coverage and Annual Notice of Change your plan sends you each year. The Evidence of Coveragegives you details about what the plan covers, how much you pay, and more. The Annual Notice of Change includes any changes in coverage, costs or service area that will be effective in January. If you do not get an Evidence of Coverage or Annual Notice of Change, contact your plan.