Medicare is a federal health insurance program that the U.S. government developed for seniors who have reached age 65 and for individuals under the age of 65 with certain disabilities. While Medicare does help cover many healthcare costs, there are services and supplies that are not covered by Medicare. Understanding the basics of Medicare coverage can help you determine your coverage and costs.
Understanding Original Medicare
Original Medicare is made up of Part A (hospital care) and Part B (medical insurance). Most people receive Part A premium-free if they have earned enough credits to qualify for Medicare by working and paying Medicare taxes. Part B does charge a premium. Yearly deductibles apply.
When an individual becomes eligible for Medicare, they can choose to get their Medicare benefits from Original Medicare or Medicare Advantage. Original Medicare includes Parts A and B. Medicare Advantage plans, also known as Part C, are offered by private insurance companies that must provide at least the same Part A and Part B benefits as Original Medicare, but many MA plans provide additional coverage.
What Original Medicare Does Not Cover
Here are five of the benefits Original Medicare does not cover:
- Prescription drugs
- Routine eye care
- Routine hearing exam and hearing aids
- Preventive dental checkups
- Medical care during travel outside the country
How Medicare Advantage, Medigap, and Part D Can Help
Medicare recipients can get additional benefits in a few ways. Enrolling in Medicare Advantage plans will give you access to additional coverage, including prescription drug coverage, vision and dental care, and hearing exams. Plans vary in cost and coverage, so compare the options in your area to find the plan that meets your specific needs.
If you choose to keep Original Medicare, you can purchase supplemental insurance to help cover some of your out-of-pocket costs. Medicare Supplement plans, or Medigap, are sold by private insurance companies to help lower some of your costs, such as deductibles, copayments, and coinsurance. Some Medicare Supplement plans also include coverage for care you receive outside of the United States. If you are considering purchasing a Medicare Supplement plan, it’s important to enroll when you are first eligible. When you turn 65 and are enrolled in Part B, you will have a 6-month enrollment period during which you have a guaranteed issue right to purchase any Medigap policy sold in your state. After that period ends, you will be subject to medical underwriting and can be charged more or turned down for coverage.
Part D is prescription drug coverage sold by private insurance companies. Every plan has a formulary, which is a full list of prescriptions drugs covered by the plan. The list is often segmented into tiers with varying levels of Medicare benefits. Before selecting a plan, compare the costs and coverage to make sure the plan’s formulary includes the medications you need. Check updates to the list annually in case drugs are moved to a different tier, replaced with generic versions or removed altogether.