Medicare Health Insurance for Senior Citizens

Medicare is a government program that provides health insurance coverage for senior citizens age 65 years and older, the disabled of any age, and to anyone suffering from end-stage renal disease.

Medicare is divided into four parts, which are known as Medicare Part-A, B, C, and D.

What is Medicare Part-A?

Part-A is hospital insurance, which helps cover inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities (but does not cover custodial or long-term care). Medicare Part-A also helps cover hospice care and some home health care, but you must meet certain conditions to get these benefits.

Cost of Medicare Part-A: Most people don't have to pay a monthly premium for Part-A, because they or a spouse paid Medicare taxes while working for a certain number of calendar quarters during their lifetime.

If you don't get premium-free Part-A you may be able to buy it if you or your spouse aren't entitled to Social Security because you didn't work or didn't pay enough Medicare taxes while you worked and are age 65 or older, or you are disabled but no longer get free Part-A because you returned to work.

In most cases, if you buy Part-A coverage, you must also enroll in Part-B and pay the Part-B premium too. If you have limited income and resources, your state may help you pay for Part-A and/or Part-B.

What Services Does Medicare Part-A Cover?

Medicare Part-A pays for medically necessary services including:

Hospital Stays - Semi-private room, meals, general nursing, drugs, and other hospital services and supplies. This includes inpatient care you get in critical access hospitals and mental health care. This doesn't include private-duty nursing or a television or telephone in your room. It also doesn't include a private room, unless medically necessary. Inpatient mental health care in a psychiatric hospital is limited to 190 days in a lifetime.

Skilled Nursing Facility Care - Semi-private room, meals, skilled nursing and rehabilitative services, and other services and supplies (only after a three-day inpatient hospital stay for a related illness or injury) for up to 100 days in a benefit period.

Note: Medicare does not cover long-term care. See our Guide to Long Term Care for complete information about your long term care options and financial aid programs that can help pay for long term care.

Home Health Services - Limited to reasonable and necessary part-time or intermittent skilled nursing care and home health aide services, and physical therapy, occupational therapy, and speech-language pathology ordered by your doctor and provided by a Medicare-certified home health agency. Also includes medical social services, other services, durable medical equipment (such as wheelchairs, hospital beds, oxygen, and walkers), and medical supplies for use at home.

Hospice Care - For people with a terminal illness (less than six months to live). Includes drugs for symptom control and pain relief, medical and support services from a Medicare-approved hospice, and other services not otherwise covered by Medicare (like grief counseling). Hospice care is usually given in your home (may include a nursing facility if this is your home). However, Medicare covers some short-term hospital and inpatient respite care (care given to a hospice patient so that the usual caregiver can rest).

What is Medicare Part-B?

Part-B is medical insurance, which covers most common medical services, when they are medically necessary, including doctors' services, outpatient care, laboratory and diagnostic services, and other medical services that Part-A doesn't cover.

You are not required to join Medicare Part-B if you do not want to, but the vast majority of Medicare beneficiaries choose to enroll, because the premium is relatively low for the amount of health insurance benefits that it provides.

Medicare Part-B and TRICARE Coverage - If you have TRICARE, you must have Medicare Part-B to keep this coverage. However, if you are an active duty service member, or the spouse or dependent child of an active duty service member, you may not have to get Medicare Part-B right away. You can get Part-B during Special Enrollment period, and in most cases you won't have to pay a late enrollment penalty.

Cost of Medicare Part B - You have to pay a premium for Part-B every month, which varies depending on your yearly income. The standard monthly premium in 2012 is $99.90 per month. The Part-B premium is higher for individuals with incomes above $85,000 per year, and for couples with incomes above $170,000 per year.

You also pay a Part-B deductible every year before Medicare starts to pay for its share of your medical expenses. You may be able to get help from your state to pay this premium and deductible.

If you don't take Part-B when you are first eligible, the cost of your Part-B premiums will go up 10% for each full 12-month period that you could have had Part-B but didn't sign up for it, except in special cases. You may have to pay this penalty as long as you have Part-B.

If you didn't sign up for Part-B when you first became eligible, call Social Security at 1-800-772-1213 to see when you can apply. TTY users should call 1-800-325-0778. If you get benefits from the Railroad Retirement Board, call your local RRB office.

Copayments - You have to pay the coinsurance or copayment for each service you receive. In general, Part-B pays 80% of the Medicare-approved amount for each service, and you have to pay the remaining 20% for the service.

If your provider participates in Medicare but does not accept Medicare assignment, then the provider could charge up to 115% of the Medicare-approved amount for the service. In that case, Medicare would still pay only 80% of the approved amount, and you would have to pay 35% of the approved amount to cover the balance. As you can see, your out-of-pocket expense could be substantially higher if you use a provider that does not accept Medicare assignment.

What is Medicare Part-C?

Medicare Part-C allows Medicare beneficiaries to buy government-subsidized health insurance policies from private insurance companies, to replace their coverage under Medicare Part-A and Part-B. 

What is Medicare Part-D Medicare Prescription Drug Coverage?

Medicare offers prescription drug coverage for everyone with Medicare. This is called Part-D. This coverage may help lower prescription drug costs and help protect against higher costs in the future. It can give you greater access to drugs that you can use to prevent complications of diseases and stay well.

Joining a Medicare Drug Plan (Medicare Part-D) is optional. If you decide to join a Medicare drug plan, you usually have to pay a monthly premium.  If you decide not to enroll in a Medicare drug plan when you are first eligible, you may pay a penalty if you choose to join later. These plans are run by insurance companies and other private companies approved by Medicare.

There are two different ways to get Medicare prescription drug coverage:

1) You can join a stand-alone Medicare prescription drug plan that simply adds drug coverage to the original Medicare Plan, some Medicare Cost Plans, some Medicare Private Fee-for-Service Plans, and Medicare Medical Savings Account Plans.

2) You can join a Medicare Advantage plan (such as an HMO or PPO) that includes prescription drug coverage as part of the plan. You will get all of your Medicare coverage through these plans, including prescription drugs.

Medicare also offers help to employers and unions to help pay for prescription drug coverage for their employees or members. If you have employer or union drug coverage, joining a Part-D plan could end the retiree health benefits you and your family get, so you should always consult with your benefits administrator before you join a Part-D plan.

What is a Medigap Policy?

A Medigap policy is an insurance policy that you can buy from a private insurance company, which supplements original Medicare Part-A and Part-B coverage and pays the Medicare coinsurance, copayments and deductibles for covered medical services that you would otherwise have to pay for out-of-pocket if you didn't have a Medigap policy.

You must have Medicare Part-A and Part-B to be eligible to buy a Medigap policy. You have to pay a premium for Medigap insurance and you also must continue to pay your premium for Medicare Part-B. Medigap premiums vary from one insurance company to another and usually increase as you get older.

You can buy a Medigap policy during the six month period that begins on the first day of the month in which you turn 65. If you do not buy a Medigap policy during this enrollment period, your ability to buy one at another time may be restricted and your premiums could be higher.

However, there is a special rule that allows you to buy a Medigap policy if you leave original Medicare for the first time to join a Medicare Advantage plan but decide to return to original Medicare within the first year because you are dissatisfied with the Advantage Plan.

There are several different types of Medigap policies, such as a "Type M" policy or a "Type A" policy, and each type of policy has a set of standardized benefits that are identical regardless of the insurance company that you purchase your policy from. However, different insurance companies can charge different premiums for identical policies, so you should always shop around for the best price once you decide which type of policy is best for you.

Medicare Coverage Exclusions - What Is Not Covered by Medicare Part-A and Part-B?

Medicare doesn’t cover everything. The following list gives examples of some items and services that aren’t covered by Medicare Part-A or Part-B.

• Acupuncture
• Chiropractic services (with a few limited exceptions)
• Cosmetic surgery
• Custodial care (help with bathing, dressing, using the bathroom, and eating) at home or in a nursing home
• Deductibles, coinsurance, or copayments when you get certain health care services. People with limited income or resources may get help paying these costs.
• Dental care and dentures (with only a few exceptions)
• Diabetic supplies (some, like syringes or insulin, unless the insulin is used with an insulin pump or unless you get Medicare coverage for prescription drugs [Part-D])
• Eye care (routine exam), eye refractions and most eyeglasses
• Foot care (routine) such as cutting of corns or calluses (with only a few exceptions)
• Hearing aids and hearing exams for the purpose of fitting a hearing aid
• Hearing tests that haven’t been ordered by your doctor
• Laboratory tests (screening) with some limited exceptions
• Long-term care, such as custodial care in a nursing home
• Orthopedic shoes (with only a few exceptions)
• Physical exams (routine or yearly) (Medicare will cover a one-time physical exam within the first six months you have Part-B
• Prescription drugs - except for hospice care and inpatient hospitalization, most prescription drugs aren’t covered by original Medicare Part-A or Part-B.
• Shots (preventive vaccinations) except those listed in covered items
• Tests (screening) except as listed in covered items
• Travel (Health care you get while traveling outside of the United States, except as listed in covered items