Medicare, the nation’s largest health insurance program is available for people aged 65 or older, persons suffering from some disability even if they are under age 65, and for people of all ages with End-Stage Renal Disease (permanent kidney failure treated with dialysis or a transplant). Medicare is administered by the Centers for Medicare & Medicaid Services (CMS). Today, Medicare covers nearly 40 million Americans.
U.S. citizens or permanent residents of the United States are eligible for Medicare benefits if they have worked for at least ten years in a job that has paid money into the Medicare system. Most companies show Medicare tax as a separate line item or they combine it with Social Security taxes.
Medicare Part A deals with hospital insurance. This insurance helps a person pay for hospital care, skilled nursing facilities, home health care and hospice care. Most people are eligible to receive Medicare Part A at age 65, and will receive this benefit without having to pay any monthly premiums if:
- The person gets retirement benefits from Social Security or the Railroad Retirement Board.
- The person is eligible to get Social Security or Railroad benefits but have not yet filed for them.
- The person or spouse had Medicare-covered government employment.
A person under 65 years of age can also get Part A coverage without having to pay premiums if he/she has:
- Received Social Security or Railroad Retirement Board disability benefits for 24 months.
- Suffers from End-Stage Renal Disease or suffers from other disabilities that meet the requirement for coverage.
If you pass the eligibility rules for Medicare Part A, then you are also eligible for Medicare Part B (medical insurance). However, while a person does not have to pay a premium for Part A if the person meets the conditions for coverage, he/she will have to pay for Part B coverage. This coverage under Part B of the Medicare program is for doctor services, outpatient care, and some other medical services that are not covered under Part A. The eligibility rule also applies to spouses, and so, if either you or your spouse worked for ten or more years and paid money into the Medicare system, then both are covered.
Medicare Part B coverage, unlike Part A, requires payment of a monthly insurance premium and if a person does not choose Part B insurance when he/she first becomes eligible, then the cost of Part B insurance may be higher if the person tries to enroll later. As a rule, the cost of Medicare Part B can go up to 10% for each year that a person could have enrolled in Part B, but chose not to enroll. The 10% increase to the monthly premium is paid as long as the person is enrolled in Medicare Part B – which may be for life.
All persons qualifying for Medicare benefits are also eligible for Medicare Part D, which is a plan that provides for prescription drug coverage. The intention of this program is to protect individuals from today’s high cost of prescription drugs as well as future costs.
Medicare Part D is provided by private insurance companies and beneficiaries need to choose or enroll in a drug plan and pay a monthly premium to the insurance provider they select. Like any other insurance, if a participant decides to delay enrollment in a drug plan when they first become eligible, they may wind up paying more for coverage later on.