Alyssa Lane
Medicare is a federal health insurance program for people aged 65 and over, as well as certain younger people with disabilities and those with End-Stage Renal Disease. It is important to understand the different parts of Medicare, such as Part A (Hospital Insurance), Part B (Medical Insurance), and Part D (Medicare drug plan). When you first get Medicare, you should consider your coverage options, such as Medicare Supplement Insurance (Medigap) or a Medicare Advantage Plan. You can also choose to end your Marketplace coverage if you now have Medicare. It is recommended to consult your local State Health Insurance Assistance Program (SHIP) for personalized health insurance counselling. Understanding the special enrollment periods and considering your specific needs, such as prescription drug coverage, will help you make informed decisions about your Medicare plan.
| Characteristics | Values |
|---|---|
| Eligibility | People 65 and older and certain younger people with disabilities. It also covers people with End-Stage Renal Disease (ESRD). |
| Medicare Part A | Hospital Insurance |
| Medicare Part B | Medical Insurance |
| Medicare Part C | Medicare Advantage |
| Medicare Part D | Medicare drug plan |
| Medicare Supplement Insurance | Medigap |
| Enrollment Period | Your first chance to sign up for Medicare is usually when you turn 65. |
| Marketplace Coverage | If you have Medicare, you don't need Marketplace coverage. |
| Medicare Advantage Plan | You can only join, switch, or drop a Medicare Advantage Plan at certain times, called enrollment periods. |
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What You'll Learn
Understanding Medicare Advantage Plans
Medicare Advantage Plans, also referred to as Medicare Part C, are private health insurance plans paid for by the federal government. They are an alternative to traditional or original Medicare plans, providing Medicare-covered benefits. Medicare Advantage Plans are offered by Medicare-approved private companies that must follow rules set by Medicare.
In 2023, 49% of Medicare beneficiaries were enrolled in Medicare Advantage Plans, and by 2025, over half of total Medicare enrollment is projected to be in these plans. Medicare Advantage Plans can be Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs). HMOs generally cover only care provided by in-network doctors, hospitals, and other health providers, while PPOs offer access to out-of-network providers at a higher cost. PPOs can be local or regional, with regional plans serving a single state or group of states.
There are also other types of Medicare Advantage Plans, such as Private Fee-for-Service plans, Medicare Medical Savings Accounts, PACE plans, and non-risk-bearing cost plans. However, enrollment in these plans is relatively low. Special Needs Plans are another type of Medicare Advantage Plan designed for people with high healthcare needs, including those eligible for Medicare and Medicaid or those with specific chronic conditions. Employer Group Plans are Medicare Advantage Plans for employers' retirees.
It is important to note that Medicare Advantage Plans have specific provider networks, and enrollees can only access providers within these networks. Before joining a Medicare Advantage Plan, it is advisable to talk to your employer or benefits administrator, as joining one might cause you to lose your current coverage. Additionally, you should review the plan's coverage, costs, and whether your doctors and pharmacies are in the plan's network.
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Supplemental coverage options
Once you’ve signed up for Part A (Hospital Insurance) and Part B (Medical Insurance), you can choose how to get your health coverage. There are two main ways to get your Medicare coverage: Original Medicare and Medicare Advantage.
Medicare Supplement Insurance (Medigap) is extra insurance you can buy from a private company to help pay your share of costs in Original Medicare. Generally, you need Part A and Part B to buy a Medigap policy. Some Medigap policies offer coverage when you travel outside the U.S. but they don’t cover long-term care, vision, dental, hearing aids, private-duty nursing, or prescription drugs. If you’re under 65, you might not be able to buy a Medigap policy, or you may have to pay more. Medigap policies are standardized, and in most states, they are named by letters, like Plan G or Plan K. The benefits in each lettered plan are the same, no matter which insurance company sells it. Price is the only difference between policies with the same letter sold by different companies.
You may also have other coverage, like employer or union, military, or veterans’ benefits. If you chose Original Medicare and want to add drug coverage, you can join a separate Medicare drug plan. Medicare drug coverage is optional and available to everyone with Medicare. However, you may pay a Part D late enrollment penalty if you don’t join a Medicare drug plan when you first get Medicare and go 63 days or more without creditable drug coverage. The penalty goes up the longer you wait to join a plan, and in most cases, you pay this monthly penalty for as long as you have Part D coverage, even if you switch plans.
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Medicare and Marketplace coverage
Medicare is a federal health insurance program for people aged 65 and older and certain younger people with disabilities. It also covers people with End-Stage Renal Disease (ESRD), which is permanent kidney failure requiring dialysis or a transplant.
The Health Insurance Marketplace, on the other hand, is for people who don't have health insurance. You don't need to join the Marketplace if you have Medicare. If you have Medicare Part A (Hospital Insurance) and Part B (Medical Insurance), live in the service area of the plan you want to join, are a U.S. citizen or are lawfully present in the U.S., and have your Medicare Number and your Part A and/or Part B coverage start dates, you can join a Medicare Advantage Plan (Part C), other Medicare health plan, or Medicare drug plan (Part D).
If you have Marketplace coverage in addition to Medicare, you can log into your account at HealthCare.gov to end your Marketplace coverage. It's important to note that Marketplace coverage doesn't end automatically when Medicare starts, so you need to take action to end it. If you don't end your Marketplace coverage and continue to receive the premium tax credit, you may be required to pay back some or all of the credit when you file your federal taxes.
If you have to pay a premium for Medicare Part A, you can choose whether to have coverage through Medicare or the Marketplace. You can compare costs and coverage and consider the Medicare late enrollment penalties when making your decision. However, it's against the law for someone who knows you have Medicare to sell you a Marketplace plan.
To get help with your coverage options, you can contact your local State Health Insurance Assistance Program (SHIP) to receive free personalized health insurance counseling.
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Medicare enrolment periods
Medicare is a federal health insurance program for people aged 65 and over, as well as certain younger people with disabilities, and those with End-Stage Renal Disease (ESRD).
Initial Enrollment Period
Your Initial Enrollment Period is your first opportunity to sign up for Medicare, and it usually occurs when you turn 65. This is the "Initial Enrollment Period," and there are no penalties if you sign up during this time. If you are already covered through an employer group health plan, you may consider delaying signing up for Medicare or Part B. If you are 65 or older and receiving Social Security benefits, you will be automatically enrolled in Part A.
General Enrollment Period
After your Initial Enrollment Period ends, the General Enrollment Period is when you can sign up for Part B and premium Part A. This period runs from January 1st to March 31st each year. If you don't sign up during this period, you may have to pay a monthly late enrollment penalty.
Special Enrollment Period
Special Enrollment Periods are available for specific situations, such as joining a plan based on misleading information or experiencing a significant change in your plan's provider network. These periods are evaluated on a case-by-case basis, and you may qualify for a Special Enrollment Period if you have exceptional circumstances. During a Special Enrollment Period, you can switch to a 5-star Medicare drug plan or a Medicare Advantage Plan, or drop your current plan and return to Original Medicare.
Medicare Advantage Trial Period
If you've recently joined a Medicare Advantage Plan for the first time, you have a trial period during which you can drop the plan and enrol in Original Medicare. This period lasts for 12 months after you first join the Medicare Advantage Plan.
Medicare Supplement Insurance (Medigap) Enrollment
Medigap policies provide extra insurance to help cover costs in Original Medicare. You generally need Part A and Part B to buy a Medigap policy, and you should buy it within 6 months of getting Parts A and B to avoid potential issues with eligibility or increased costs.
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Prescription drug coverage
If you have a new Medicare plan, it's important to understand your prescription drug coverage, also known as Medicare Part D. This is a standalone plan that can be added to Original Medicare, which includes Part A (Hospital Insurance) and Part B (Medical Insurance).
Enrollment Periods
You can only join, switch, or drop a Medicare drug plan at certain times, known as enrollment periods. Your first chance to sign up for Medicare is during your Initial Enrollment Period, usually when you turn 65. If you miss this period, you may face a Part D late enrollment penalty. This penalty increases the longer you wait to join a plan, and you'll likely pay it for as long as you have Part D coverage.
Choosing a Plan
When choosing a Medicare drug plan, there are several factors to consider:
- Check if your prescriptions are covered by the plan and if your doctors and pharmacies are in the plan's network.
- Review the costs, including monthly premiums, deductibles, and estimated yearly costs for the drugs you take.
- Understand if the plan covers you in other states if you travel or live elsewhere for part of the year.
Supplemental Coverage
If you need help with your share of costs, you can consider supplemental coverage options like Medicare Supplement Insurance (Medigap), coverage from a former employer or union, or Medicaid. Medigap policies generally require you to have Part A and Part B, and they don't typically cover prescription drugs. However, some Medigap policies offer coverage for services not included in Original Medicare, such as certain vision, hearing, and dental services.
Selecting the Right Medical Insurance Plan Level
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Frequently asked questions
Medicare is a federal health insurance program for people aged 65 and older and certain younger people with disabilities. It also covers people with End-Stage Renal Disease, requiring dialysis or a transplant.
Medicare Part A is Hospital Insurance, while Part B is Medical Insurance. Part C is Medicare Advantage, which is an alternative to Original Medicare.
To join a Medicare plan, you must meet specific criteria, including having Part A and/or Part B, living in the service area of the plan, and being a U.S. citizen or lawfully present in the U.S. You can then select a plan that covers your prescriptions and includes the benefits you need. You can join during special enrollment periods, such as when you move outside your old plan's service area.
