How Medicare Works

Medicare Overview: What is Medicare?

The Health Care Financing Administration (HCFA) of the Department of Health and Human Services manages Medicare - a social insurance plan administered by the U.S. Government, guaranteeing access to quality healthcare for eligible U.S. citizens aged 65 years or above. The national social insurance program is also available for younger people with disabilities or suffering from end-stage renal disease. You will either work directly with the Health Care Financing Administration or with a private insurer, who will handle the paperwork and claims.

Medicare insurance comprises four parts, with each part covering different aspects of healthcare: Medicare A, Medicare B, Medicare C, Medicare D. Medicare Part A, and Medicare Part B are together called Original Medicare or Traditional Medicare, covering most of the medical expenses but not all, whereas Medicare Part C is a form of supplemental insurance. Part C, also known as Medicare Advantage, can be purchased from a private insurance company in contract with Medicare. Part C offers all the benefits of Part A and Part B plus some extra advantages. Part D is specific coverage for prescription drugs and can be added to your Traditional Medicare plan or your Medicare Advantage plan if it doesn't cover prescription drugs.

If you're already a Medicare patient, you can read more about which travel insurance plans can help you on your travels.

Eligibility for Medicare (Who is Eligible for Medicare?)

Medicare is a healthcare plan for you if you meet the requirements below:

If you're 65 years of age or older
If you're under age 65 years with certain disabilities
If you're suffering from end-stage renal disease (permanent kidney failure requiring regular dialysis or a kidney transplant)
If you receive or are eligible to receive Social Security or Railroad Retirement Board benefits based on your own work record (40 or more quarters of US based employment) or on someone else's work record (such as a spouse, divorced spouse, widow, widower, divorced widow, divorced widower, or parent)
You or your spouse worked long enough in a government job where Medicare taxes were paid.
If you are under 65 and have received Social Security or Railroad Retirement Board disability benefits for 24 months or are on kidney dialysis / kidney transplant patient, you can get Part A without paying a monthly premium.

Note: Even if you're not eligible for free Part A coverage, you may still be able to purchase it by paying a premium. For example, if you've worked 39 quarters or less in the United States, then you are not eligible for free Medicare Part A, but you can purchase Medicare Part A at a discounted rate. Call the Social Security Administration (SSA) at (800) 772-1213 for more information.

Medicare Enrollment

There are 2 enrollment periods where you can enroll in Medicare:

The initial enrollment period is for 7 months, including the month you become eligible for Medicare (your 65th birthday), 3 months before and 3 months after. You are automatically enrolled in Medicare Part A and Part B and will receive a Medicare handbook and a Medicare card during the initial period. You have the option of changing your Medicare options at this point, the details are explained in the Medicare packet.
The general enrollment period starts from January 1st to March 31st each year. If you decline your enrollment or weren't enrolled for other reasons during your initial enrollment period, then the general enrollment period is when you can re-enroll when you are ready to be covered by Medicare. If you enroll during the general enrollment period, your coverage will begin on July 1st of that year.

How do You Sign Up for Medicare?

Anyone receiving Social Security benefits will automatically be enrolled in Medicare Parts A and B at age 65 when he or she becomes eligible. If you're not receiving Social Security benefits before age 65, you'll be automatically enrolled when you apply for benefits at age 65 at retirement. But if you decide to delay retirement until after age 65, remember to enroll in Medicare Parts A and B at age 65 anyway, because your enrollment won't be automatic. Call 1800.MEDICARE for more information and enrollment.

If you're going to be automatically enrolled in Medicare, you'll receive an initial enrollment package by mail from the SSA, usually three months before your 65th birthday. Of course, even if you sign up for Part A, you don't have to enroll in Part B, or you can decide to delay enrolling. But first, carefully read the information contained in your initial enrollment package. It explains the consequences of not enrolling at age 65 (e.g., you may have to pay a higher premium later) and will help you learn more about the Medicare program.

For more information about Medicare enrollment, call the SSA at (800) 772-1213.

Understanding Your Medicare Options

In most cases, a new immigrant or a recent Green Card holder won't qualify for Medicare Insurance due to the program's specific and strict eligibility criteria. If you're a green card holder who doesn't reside in the U.S. and is just visiting America, you may be able to purchase a plan for temporary coverage while in the country. If you do not qualify for Medicare, you can buy temporary health insurance which provides medical coverage for non-U.S. citizens. Get quotes on New Immigrant or Green Card Insurance, go to New Immigrant Insurance

Part A+B: Original Medicare
Part A+B: Original Medicare
Alternative to Original Medicare (Parts A+B)
An Addition to Original Medicare or Part C

Types

Part A Original Medicare

Part B Original Insurance

Part C Medicare Advantage

Part D Prescription Drug

Services

Services associated with hospital, hospice, skilled nursing care, and home health care.

Physician services, outpatient hospital care, and many other services typically covered under medical plans.

Original Medicare covered services with extra benefits not covered by Original Medicare.

Provides insurance for prescription drugs.

Premium

$0 Premium for eligible US citizens.

Premiums paid by you and by contributions from the federal government.

Varied premiums paid by you and by contributions from the federal government.

Out-of-Pocket Expense

You pay for co-payments and deductibles.

Enrollment

Automatic as of age 65 for eligible participants. You'll be sent a booklet with details on date of eligibility.

Automatic with Part A during the Initial Enrollment Period.

Must be enrolled in both Plan A+B first, then Part C replaces Part A+B

You can either enroll as a stand alone prescription drug plan (PDP) or as an addition to Part C.

Purchasing

Free

Premium/month - is based on your income.

Available from insurance companies that have a contract with Medicare.

Medicare Combinations

Part A

Part B

Part C

Part D

Medigap

Option 1 Original or Traditional Medicare

Option 2 Original or Traditional Medicare with part D for Prescription Drugs Coverage

Option 3 Traditional Medicare with part D and medigap for more medical Coverage

Option 4 Medicare Advantage

Option 4 Medicare Advantage with Part D for Prescription Drugs Coverage

Option 1 Original or Traditional Medicare

Part A Part B

Option 2 Original or Traditional Medicare with part D for Prescription Drugs Coverage

Part A Part B Part D

Option 3 Traditional Medicare with part D and medigap for more medical Coverage

Part A Part B Part D Medigap

Option 4 Medicare Advantage

Part C

Option 4 Medicare Advantage with Part D for Prescription Drugs Coverage

Part C Part D

Medicare for Immigrants

If you're a recent immigrant to the United States and are 65 years or older, it will be tough for you to get reasonably priced health care coverage with decent coverage. For US citizens who have worked in the US for 40 quarters or more have the option of free Medical insurance, in the form of Medicare. If you don't qualify for free medicare, you can still purchase Parts A and B if the following is true:

You're 65 years or older.
You're a US citizen by naturalization and haven't worked enough quarters to have social security coverage.
You're a lawful admitted alien (Green Card holder) and have lived in the United States for 5 years or longer and don't qualify for social security benefits.

The first step to purchasing medicare is to enroll in Medicare Part B by calling 1800.MEDICARE (1800.633.4227). After your purchase of Medicare Part B, you can then enroll in Medicare Part A.

Read more information about medicare for green card holders (Permanent residents)

The federal government pays private insurance companies for administering Medicare Advantage Plans for you. You remain a member of Medicare and continue to pay Medicare applicable premiums. The difference is just that you're receiving your Medicare benefits through a private insurance company rather than directly from the federal government.

Prescription Drug Plan (PDP) is a standalone Medicare Part D plan, covering only prescription drugs. It doesn't cover any other medical expenses. Medicare Advantage Plan with Prescription Drug Coverage (MAPD) is a Medicare-approved all-in-one plan that includes prescription drugs as well as medical services. You can buy MAPD from an insurance company.

Call 1800.MEDICARE (1800.633.4227) for more information and enrollment or visit medicare.gov.

A coverage gap (also called a "donut hole") is a point in the government's basic prescription drug plan where the plan "takes a break" in coverage. This is where, you, the enrollee, pay the full cost for your prescription drugs. A coverage gap applies only after you've paid a certain amount out of pocket for prescription drugs.

Disclaimer: Information presented here is high level and for general information purpose only. Information may not be accurate and is subject to change. You should contact concerned federal (Medicare.gov) or state health department to discuss your specific situations and options. Please review our complete "Terms of Use".

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