Medicare Overview

Medicare is a federal health insurance program for most people age 65 or older, people who are certified disabled, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant). The Centers for Medicare and Medicaid Services (CMS) determines who is eligible for Medicare. Medicare eligibility usually begins the month a person turns age 65. People who have been certified disabled by the Social Security Administration (SSA) and are receiving Social Security Disability Insurance (SSDI) have a 24 month wait before Medicare coverage can start.

Medicare has four parts:

• Part A is hospitalization insurance. Most people are entitled to premium-free Medicare Part A if they or their spouse has the required work history. Adult children with a disability may be eligible based on their parent’s work history. People who do not have required work history can pay a premium for Medicare Part A.
• Part B is medical insurance. Medicare Part B has a monthly premium.
• Part C is Medicare Advantage. Most Medicare beneficiaries can choose to participate in Medicare Advantage plans, which combine Part A, Part B, and, sometimes, Part D coverage. Private insurance companies approved by CMS manage Medicare Advantage plans. Many Medicare Advantage plans only charge the monthly Part B premium, others have higher monthly premiums and offer additional benefits.
• Part D is prescription drug coverage. Medicare Part D is available to people entitled to premium-free Medicare Part A or enrolled in Medicare Part B. Enrollment in Medicare Part D is voluntary, but premium penalties apply for late enrollment by people without other drug coverage. People have a wide variety of Medicare-approved plans from which to choose. Some Part D beneficiaries who have limited income and assets are eligible for premium and cost sharing subsidies. These subsidies are referred to as Extra Help or Low-Income Subsidy (LIS).

A person can be on all, some, or one of the Medicare parts at a time.

See the Types of MSP policy for information about how MSPs help people keep their Medicare coverage by paying some Medicare expenses.