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Learn the Facts About Medicare Coverage

October 6, 2016

Medicare is a federal program affecting millions of people. It may be overwhelming, and many people share information about it – not all of it accurate. This article explains several Medicare myths and helps you understand the Medicare facts.

Myth 1: Medicare coverage is free of charge.

Although some aspects of the Medicare program may be offered “premium-free,” Medicare beneficiaries are expected to cover certain expenses on their own.

For example, Part A (hospital insurance) has no premium attached if you’ve worked at least 40 quarters, or in other words, paid Medicare taxes for 10 years while working. If you don’t meet this criteria, you may still be eligible to enroll in Part A, but generally you will pay a monthly premium,   However, in 2017 Medicare Part B (medical insurance) has a standard premium of $134 (or higher depending on your income). Medicare Part D Prescription Drug Plans also have a monthly premium, which varies by plan.

In addition to premiums, Medicare beneficiaries are responsible for deductibles and out-of-pocket costs. There are no annual out-of-pocket limits with Original Medicare, meaning that Medicare beneficiaries with Original Medicare Part A and Part B are often responsible for about 20% of their medical expenses. You pay nothing for some services, such as flu shots (generally one per flu season) and annual wellness exams when delivered by a provider who accepts Medicare assignment.

Myth 2: Medicare covers all my medical expenses.

Original Medicare generally doesn’t cover prescription drugs except during an inpatient hospital stay or in some instances, medications administered by a doctor in an outpatient setting, hearing aids, routine vision care and eye ware, routine foot care, long-term care, medical care received while traveling abroad, or most dental services. You have other Medicare plan choices that can offer more coverage; if you like, you could choose either of these options:

  • You can enroll in a Medicare Advantage (Medicare Part C) plan. Medicare Advantage plans must provide the same coverage as Original Medicare (except hospice care, which is still covered under Part A).Many Medicare Advantage plans cover more services, like prescription drugs, routine vision care, and routine dental care. Under Medicare Advantage, you continue paying your Part B premium along with any premium or costs your plan has.
  • You may be able to add onto your Original Medicare (Part A and Part B) coverage by enrolling in a Medicare Supplement (Medigap) plan, a standalone Medicare Part D prescription drug plan, or both.

Myth 3: Medicare won’t cover me if I have a serious health condition.

Medicare can’t reject you for a pre-existing condition or other serious ailment. In fact, you can qualify for Original Medicare, Part A and Part B, before you turn 65 if you’re disabled or have certain diseases as explained under Myth 4 below.

If you apply for a Medicare Supplement (Medigap) plan outside the Medigap Open Enrollment Period, you could be subject to medical underwriting (a medical exam), and the plan doesn’t have to accept you or can charge you more if you have health issues. However, if you apply for this coverage during the Medigap Open Enrollment Period (the six-month period that begins when you’re both aged 65 or older and enrolled in Medicare Part B), you can sign up for any Medicare Supplement plan the private insurance company offers in your state regardless of your health status, without being charged differently for health problems. In some cases a waiting period may apply. For more information, see guaranteed issue rights.

Myth 4: Medicare is only for people aged 65 and over.

You could be eligible for Medicare benefits if you’re under the age of 65 and you’re disabled or have end-stage renal disease (ESRD). You may be eligible for Medicare if your circumstances fit into one of these categories:

  • If you’ve been collecting disability benefits from the Social Security Administration or the Railroad Retirement Board for at least 24 months, you’ll be automatically enrolled in Medicare.
  • If you have end stage renal disease (ESRD), you’re not automatically enrolled in Original Medicare, but you may be eligible to sign up. However, you might not be able to enroll in a Medicare Advantage plan. In some states, you might not be able to sign up for a Medicare Supplement (Medigap) plan until you’re age 65.
  • If you have Lou Gehrig’s disease (amyotrophic lateral sclerosis or ALS), you’re automatically enrolled in Medicare the month that your disability benefits start.

Myth 5: Medicare and Medicaid are basically the same.

Medicare and Medicaid are both government programs, but they’re quite different. Medicare is health insurance and has costs associated with it for most beneficiaries. Medicaid is a joint federal and state program with rules about who is eligible for Medicaid that vary by state. Medicaid helps pay medical and other costs for low-income or no-income beneficiaries. One area where Medicare and Medicaid overlap, however, is the Extra Help program, which helps pay Medicare prescription drug costs of beneficiaries who qualify for Medicaid. You can be enrolled in Medicare and Medicaid at the same time as long as you are eligible for both programs.

Myth 6: You can sign up for Medicare anytime.

There are specific enrollment periods when you can enroll in the different parts of Medicare. Outside these time windows, you generally can’t sign up for Medicare or switch Medicare plans offered by private insurance companies.

If you’ve chosen to file for Social Security benefits before turning age 65, usually you’ll be automatically enrolled in Medicare Part A and Part B. You’ll still need to enroll in Part D on your own.  However, if you have not filed for Social Security benefits or if you or your spouse have not contributed to Social Security and paid Medicare taxes for at least 10 working years, you will not be automatically enrolled in Medicare. You will have to remember to enroll. The period when most people are first eligible to enroll in Medicare is called the Initial Enrollment Period (IEP) and spans seven months: the three months before your 65th birthday month, your birthday month, and the three months following that month.

The IEP is usually the best time to enroll in Original Medicare (if you’re not automatically enrolled) or in other Medicare plans. If you also want to enroll in a Medicare Supplement plan, the Medigap Open Enrollment Period (the six-month period that begins when you’re both aged 65 or older and enrolled in Medicare Part B) is usually the only time you’re guaranteed acceptance into the plan. See Enrollment Periods for Medicare Insurance Plans.

In some special cases, you can add Medicare coverage or change from one plan to another. Your opportunity to make these changes is called a Special Election Period (SEP). There are different SEPs for different kinds of Medicare plans. See Medicare Enrollment Periods for Medicare Advantage and prescription drug plan SEPs. See When can I buy Medigap? for information on Medigap enrollment periods.

Feel free to use the no-obligation plan finder tool on this page to compare Medicare Advantage plans and Medicare Part D Prescription Drug Plans offered by Medicare–approved private insurance companies in your area as well as Medicare Supplement plans offered by private insurers.  You can also compare plans at Medicare.gov or by calling 1-800-MEDICARE (1-800-633-4227) (TTY users 1-877-486-2048), 24 hours a day, seven days a week.

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