This handbook chapter provides an overview of Medicare. For more in-depth information or subjects not covered in this chapter please go to the website for Centers for Medicare and Medicaid (CMS): www.cms.hhs.gov or www.medicare.gov.
Medicare is a federally-funded health insurance program for:
An individual age 65 or older.
An individual under age 65 who has received Social Security Disability Insurance (SSDI) benefits for 24 months (except for individuals with Amyotrophic Lateral Sclerosis or Lou Gehrig’s Disease (ALS) who get Medicare as soon as SSDI cash benefits begin).
An individual of any age with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant).
An individual who meets the qualifications described above must also have paid into Social Security for at least 10 years (40 quarters) or is eligible to receive Social Security benefits on a spouse’s (or former spouse’s) earnings.
NOTE: If an individual has not paid into Social Security for at least 10 years, Medicare Part A (hospital insurance) can be purchased by paying a monthly premium if a citizen or a lawfully admitted non-citizen with five years of residency in the United States.
The Medicare Program is administered by the Centers for Medicare and Medicaid Services (CMS). There are four components to Medicare:
Part A is Hospital Insurance (see Section 337.2)
Part B is Medical Insurance (see Section 337.3)
Part C is Medicare Advantage Plans (see Section 337.4)
Part D is Prescription Drug Coverage (see Section 337.5)
There are two ways to get Medicare:
Original Medicare (Part A and Part B).
Medicare Advantage (Part C).
NOTE: Medicare Part A and Part B coverage is the same throughout the U.S. Medicare Advantage Plans are offered by private companies and are often available only in a specific county, state or region. An individual who moves may need to change plans.
The following terms are helpful with the understanding of how costs are shared with an individual and Medicare coverage:
Premium: A fixed amount that must be paid by an individual to receive health care coverage.
Deductible: A pre-set amount that an individual must pay first before Medicare or a private insurance coverage begins to help with the cost of health care services received.
Co-Payment: A fixed amount that an individual must pay to receive a service or product. This is often referred to as a co-pay.
Co-Insurance: Co-insurance is splitting health care costs with the plan on a percentage basis. For example, an individual pays 20 percent and the health care plan pays the remaining 80 percent.
Updated February 14, 2012, Replacing March 3, 2011