Medicare Basics

Introduction to Medicare


Medicare is a Health Insurance Program for:
  • People age 65 or older
  • People younger than age 65 with certain disabilities
  • People of all ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant)
Sign up for Medicare online or call 1 (800) 772-1213. You can sign up for Medicare anytime from three months prior to your birth month, the month of your 65th birthday or three months following your birth month.

Medicare has Four Parts. Learn more below.
As long as you have both Part A and Part B, items covered by Part A and Part B are covered whether you have Original Medicare or you belong to a Medicare Advantage Plan (like an HMO or PPO).

To learn more:
  • Visit Medicare.gov or call 1 (800) MEDICARE (1 (800) 663-4227)
  • Call SHIBA at (253) 596-0918
  • Call the Aging & Disability Resource Center at (253) 798-4600 or (800) 562-0332

Part A (Hospital Insurance)


Part A helps cover:
  • Inpatient care in hospitals (such as critical access hospitals, inpatient rehabilitation facilities and long-term care hospitals)
  • Inpatient care in a skilled nursing facility (not custodial or long-term care)
  • Hospice care services
  • Home health care services
  • Inpatient care in a Religious Nonmedical Health Care Institution
Part A coverage is free if you or your spouse paid Medicare taxes while working for 40 quarters, i.e. 10 years. If you are not eligible for premium-free Part A, you may be able to buy Part A if you meet one of these conditions:
  • You're 65 or older, you're entitled to (or enrolling in) Part B and you meet the citizenship or residency requirements.
  • You're under 65, disabled and your premium-free Part A coverage ended because you returned to work.
In most cases, if you choose to buy Part A, you must also have Part B and pay monthly premiums for both. If you have limited income and resources, your state may help you pay for Part A and/or Part B.

Services Part A Covers


  • Blood
    • In most cases, the hospital gets blood from a blood bank at no charge, and you won't have to pay for it or replace it. If the hospital has to buy blood for you, you must either pay the hospital costs for the first three units of blood you get in a calendar year or have the blood donated by you or someone else.
  • Home Health Services
    • Medically-necessary part-time or intermittent skilled nursing care, or physical therapy, speech-language pathology or a continuing need for occupational therapy. A doctor or other health-care provider must order your care, and a Medicare-certified home health agency must provide it. Home health services may also include medical social services, part-time or intermittent home health aide services and medical supplies for use at home. You must be homebound, which means that leaving home is a major effort.
  • Hospice Care
    • For people with a terminal illness. Your doctor must certify that you're expected to live six months or less. Coverage includes
      • Drugs for pain relief and symptom management
      • Medical, nursing social services
      • Certain durable medical equipment
      • Other covered services as well as services Medicare usually doesn't cover, such as spiritual and grief counseling.
    • A Medicare-approved hospice usually gives hospice care in your home (or other facility like a nursing home). Hospice care doesn't pay for your stay in a facility (room and board) unless the hospice team determines that you need short-term inpatient stays for pain and symptom management that can't be addressed at home. These stays must be in a Medicare-approved facility, such as a hospice facility, hospital or skilled nursing facility which contracts with the hospice.
    • Medicare also covers inpatient respite care which is care you get in a Medicare approved facility so that your usual caregiver can rest. You can stay up to five days each time you get respite care. Medicare will pay for covered services for health problems that aren't related to your terminal illness. You can continue to get hospice care as long as the hospice medical director or hospice doctor recertifies that you are terminally ill.
  • Hospital Stays (Inpatient)
    • Includes semi-private room, meals, general nursing, drugs as part of your inpatient treatment and other hospital services and supplies. Examples include inpatient care you get in acute care hospitals, critical access hospitals, inpatient rehabilitation facilities, long-term care hospitals, inpatient care as part of a qualifying clinical research study and mental health care. This doesn't include private-duty nursing, a television or telephone in your room (if there is a separate charge for these items) or personal care items like razors or slipper socks. It also doesn't include a private room, unless medically necessary. If you have Part B, it covers the doctor's services you get while you are in a hospital.
    • Note: Staying overnight in a hospital doesn't always mean you're an inpatient. You're considered an inpatient the day a doctor formally admits you to a hospital with a doctor's order. Being an inpatient or an outpatient affects your out-of-pocket costs. Always ask if you're an inpatient or an outpatient. For more information, view the publication Are You a Hospital Inpatient or Outpatient at. You can also call 1 (800) MEDICARE (1 (800) 633-4227) to find out if a copy can be mailed to you. TTY users should call 1 (877) 486-2048.
  • Religious Nonmedical Health Care Institution (Inpatient Care)
    • Medicare will only cover the non-medical, non-religious health care items and services (like room and board) in this type of facility for people who qualify for hospital or skilled nursing facility care, but for whom medical care isn't in agreement with their religious beliefs. Non-medical items and services like wound dressings or use of a simple walker during your stay don't require a doctor's order or prescription. Medicare doesn't cover the religious aspects of care.
  • Skilled Nursing Facility Care
    • Includes semi-private room, meals, skilled nursing and rehabilitative services and other services and supplies that are medically necessary after a three-day minimum inpatient hospital stay for a related illness or injury. To qualify for care in a skilled nursing facility, your doctor must certify that you need daily skilled care like intravenous injections or physical therapy. Medicare doesn't cover long-term care or custodial care.
To learn more:
  • Visit Medicare.gov or call 1 (800) MEDICARE (1 (800) 663-4227)
  • Call SHIBA at (253) 596-0918
  • Call the Aging & Disability Resource Center at (253) 798-4600 or (800) 562-0332

Part B (Outpatient Medical Insurance)


Helps cover medically-necessary services like doctors' services, outpatient care, home health services and other medical services. Part B also covers some preventive services. Check your Medicare card to find out if you have Part B.

How Much Does Part B Cost?


You pay the Part B premium each month. Most people will pay the ''standard'' premium amount. However, if your modified adjusted gross income as reported on your IRS tax return from two years ago is above a certain amount, you may pay more.

Your modified adjusted gross income is your taxable income plus your tax exempt interest income. Social Security will notify you if you have to pay more than the standard premium. If you have to pay a higher amount for your Part B premium and you disagree (even if you get Railroad Retirement Board benefits), call Social Security at 1 (800) 772-1213. TTY users should call 1 (800) 325-0778.

Note: If you don't sign up for Part B when you are first eligible, you may have to pay a late-enrollment penalty.

How You Get Part B?


  • If you get benefits from Social Security or the Railroad Retirement Board (RRB), in most cases you'll automatically get Part B starting the first day of the month you turn 65. If your birthday is on the first day of the month, your Part B will start the first day of the prior month.
  • If you're younger than 65 and disabled, you'll automatically get Part B after you get disability benefits from Social Security or certain disability benefits from the RRB for 24 months. You'll get your Medicare card in the mail about three months before your 65th birthday or your 25th month of disability.
  • If you don't want Part B, follow the instructions that come with the card and send the card back. If you keep the card, you keep Part B and will pay Part B premiums.
  • If you have ALS (Amyotrophic Lateral Sclerosis, also called Lou Gehrig's disease), you automatically get Part B the month your disability benefits begin.

Services Part B Covers


  • Medically-necessary services - Services or supplies that are needed to diagnose or treat your medical condition and that meet accepted standards of medical practice.
  • Preventive services - Health care to prevent illness or detect it at an early stage, when treatment is most likely to work best (for examples see ''Medicare & You Handbook'').

What You Pay for Part B Services


Costs for Part B services depend on whether you have Original Medicare or are in a Medicare Advantage health plan. For some services, there are no costs, but you may have to pay for the doctor's visit (i.e, co-pay). If the Part B deductible applies, you must pay all costs until you meet the yearly Part B deductible before Medicare begins to pay its share.

Then, after your deductible is met, you typically pay 20 percent of the Medicare-approved amount of the service. You can save money if you choose doctors or providers who accept ''assignment.''

To learn more:
  • Visit Medicare.gov or call 1 (800) MEDICARE (1 (800) 663-4227)
  • Call SHIBA at (253) 596-0918
  • Call the Aging & Disability Resource Center at (253) 798-4600 or (800) 562-0332

Part C - Medicare Advantage Plans


A Medicare Advantage Plan (like an HMO or PPO) is another Medicare health plan choice you may have as part of Medicare. Medicare Advantage Plans, sometimes called ''Part C'' or ''MA Plans,'' are offered by private companies approved by Medicare. If you join a Medicare Advantage Plan, the plan will provide all of your Part A (Hospital Insurance) and Part B (Medical Insurance) coverage.

In all types of Medicare Advantage Plans, you're always covered for emergency and urgent care. Medicare Advantage Plans must cover all of the services that Original Medicare covers except hospice care. Original Medicare covers hospice care even if you're in a Medicare Advantage Plan. Medicare Advantage Plans aren't supplemental coverage.

Medicare Advantage Plans may offer extra coverage, such as vision, hearing, dental and/or health and wellness programs. Most include Medicare prescription drug coverage (Part D). In addition to your Part B premium, you usually pay one monthly premium for the services included.

Medicare pays a fixed amount for your care every month to the companies offering Medicare Advantage Plans. These companies must follow rules set by Medicare.

However, each Medicare Advantage Plan can charge different out-of-pocket costs and have different rules for how you get services (like whether you need a referral to see a specialist or if you have to go to only doctors, facilities, or suppliers that belong to the plan for non-emergency or non-urgent care). These rules can change each year.

Different Types of Medicare Advantage Plans


  • Health Maintenance Organization (HMO) Plans
  • Preferred Provider Organization (PPO) Plans
  • Private Fee-for-Service (PFFS) Plans
  • Special Needs Plans (SNP)
There are other less common types of Medicare Advantage Plans that may be available:
  • HMO Point of Service (HMOPOS) Plans
    • An HMO plan that may allow you to get some services out-of-network for a higher cost.
  • Medical Savings Account (MSA) Plans
    • A type of Medicare Advantage Plan. MSA Plans combine a high deductible Medicare Advantage Plan and a bank account. The plan deposits money from Medicare into the account. You can use the money in this account to pay for your health care costs, but only Medicare-covered expenses count toward your deductible. The amount deposited is usually less than your deductible amount so you generally will have to pay out-of-pocket before your coverage begins.
    • For more information about MSAs, call 1 (800) MEDICARE to order a copy of the booklet, ''Your Guide to Medicare Medical Savings Account Plans.'' TTY users should call 1 (877) 486-2048.

What You Pay in a Medicare Advantage Plan


Your out-of-pocket costs in a Medicare Advantage Plan depend on the following:
  • Whether the plan charges a monthly premium
  • Whether the plan pays any of your monthly Part B premium
  • Whether the plan has a yearly deductible or any additional deductibles
  • How much you pay for each visit or service (copayments or coinsurance)
  • The type of health care services you need and how often you get them
  • Whether you follow the plan's rules, like using network providers
  • Whether you need extra benefits and if the plan charges for them
  • The plan's yearly limit on your out-of-pocket costs for all medical services
To learn more about your costs in specific Medicare Advantage Plans, contact the plans you're interested in to get more details. Go online or call 1 (800) MEDICARE (1 (800) 633-4227) to find plans in your area. TTY users should call 1 (877) 486-2048.

How to Join a Medicare Advantage Plan


Not all Medicare Advantage Plans work the same way, so before you join, find out the plan's rules, what your costs will be, and whether the plan will meet your needs.

Contact the specific plans you're interested in to get more information about their benefits and costs. Once you choose a plan, you may be able to join by completing a paper application, calling the plan, enrolling on the plan's Web site.

More About Medicare Advantage Plans


  • As with Original Medicare, you still have Medicare rights and protections, including the right to appeal.
  • Check with the plan before you get a service to find out whether they will cover the service and what your costs may be.
  • You must follow plan rules, like getting a referral to see a specialist or getting prior approval for certain procedures to avoid higher costs. Check with the plan.
  • You can join a Medicare Advantage Plan even if you have a pre-existing condition, except for End-Stage Renal Disease.
  • You can only join a plan at certain times during the year. In most cases, you're enrolled in a plan for a year.
  • If you go to a doctor, facility or supplier that doesn't belong to the plan, your services may not be covered, or your costs could be higher, depending on the type of Medicare Advantage Plan.
  • If the plan decides to stop participating in Medicare, you'll have to join another Medicare health plan or return to Original Medicare.
To learn more:
  • Visit Medicare.gov or call 1 (800) MEDICARE (1 (800) 663-4227)
  • Call SHIBA at (253) 596-0918
  • Call the Aging & Disability Resource Center at (253) 798-4600 or (800) 562-0332

Part D - Prescription Drug Coverage


Medicare offers prescription drug coverage to everyone with Medicare. Even if you don't take a lot of prescriptions now, you should still consider joining a Medicare drug plan. To get Medicare prescription drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare.

Each plan can vary in cost and drugs covered. If you decide not to join a Medicare drug plan when you're first eligible, and you don't have other credible prescription drug coverage, you will likely pay a late enrollment penalty if you ever do want to or need to enroll.

Two types of plans offer Medicare prescription drug coverage:
  • Medicare Prescription Drug Plans
    • These plans (sometimes called 'PDPs') add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans and Medicare Medical Savings Account (MSA) Plans.
  • Medicare Advantage Plans (like an HMO or PPO)
    • These plans are other Medicare health plans that offer Medicare prescription drug coverage. You get all of your Part A and Part B coverage and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called ''MA-PDs.''

Who Can Get Medicare Drug Coverage?


You must have Medicare Part A or Part B. To join a Medicare Advantage Plan, you must have Part A and Part B. You must also live in the service area of the Medicare drug plan you want to join.

If you have employer or union coverage, call your benefits administrator before you make any changes, to before you sign up for any other coverage. If you drop your employer or union coverage, you may not be able to get it back.

You also may not be able to drop your employer or union drug coverage without also dropping your employer or union health (doctor and hospital) coverage. If you drop coverage for yourself, you may also have to drop coverage for your spouse and dependants.

How Do You Join?


Once you choose a Medicare drug plan, you may be able to join by completing a paper application, calling the plan, or enrolling on the plan's website. You can also enroll by calling 1 (800) MEDICARE (1 (800) 633-4227). TTY users should call 1 (877) 486-2048.

hen you join a Medicare drug plan, you will have to provide your Medicare number and the date your Part A and/or Part B coverage started. This information is on your Medicare card.

Note: Medicare drug plans aren't allowed to call you to enroll you in a plan. Call 1 (800) MEDICARE to report a plan that does this.

To learn more:
  • Visit Medicare.gov or call 1 (800) MEDICARE (1 (800) 663-4227)
  • Call SHIBA at (253) 596-0918
  • Call the Aging & Disability Resource Center at (253) 798-4600 or (800) 562-0332

Medicare Supplement Insurance


Medicare supplements are also known as Medigap policies. They are one and the same. It is health insurance sold by private insurance companies to fill the ''gaps'' in Original Medicare Plan coverage. Medigap policies help pay some of the health care costs that the Original Medicare Plan doesn't cover.

If you are in the Original Medicare Plan and have a Medigap policy, then Medicare and your Medigap policy will work together to pay for covered health care costs. You cannot have a Medicare Supplement if you are have a Medicare Advantage Plan.

Insurance companies can only sell you a ''standardized'' Medigap policy. These Medigap policies must all have specific benefits so you can compare them easily.
Medigap policies must follow federal and state laws. These laws protect you. A Medigap policy must be clearly identified on the cover as ''Medicare Supplement Insurance.'' Each plan has a different set of basic and extra benefits.

It's important to compare Medigap policies because costs can vary. The benefits in any Medigap Plan A through L are the same for any insurance company. Each insurance company decides which Medigap policies it wants to sell.

Generally, when you buy a Medigap policy you must have Medicare Part A and Part B. You will have to pay the monthly Medicare Part B premium. In addition, you will have to pay a premium to the Medigap insurance company.

You and your spouse must each buy separate Medigap policies. Your Medigap policy won't cover any health care costs for your spouse.

For additional information on Medigap policies, including why you would want to buy a Medigap policy and information about what Medigap policies cover, please read Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare.

To learn more:
  • Visit Medicare.gov or call 1 (800) MEDICARE (1 (800) 663-4227)
  • Call SHIBA at (253) 596-0918
  • Call the Aging & Disability Resource Center at (253) 798-4600 or (800) 562-0332