Medicare Qualifications & Rules

The Medicare program was created in the Social Security Act of 1965 as part of President Lyndon B. Johnson's Great Society. Original Medicare comprised only two parts : Part A and Part B. In the ensuing years Part C and Part D were added.

Eligibility

• The majority of people cannot enroll in Medicare until three months before their 65th birthday. You may qualify if you are under age 65 if you have end-stage renal disease requiring dialysis, have been receiving Social Security disability benefits for at least 24 months or are receiving Social Security disability benefits for Lou Gehrig's disease.

Premiums

• Medicare Part A is free of monthly premiums for anyone who has paid Medicare taxes for 40 quarters (ten years). Part B Medicare always requires a premium. In 2011, new Medicare enrollees will pay $115.40 per month for Part B. Medicare Advantage premiums are set by the insurance companies offering the plans. You may be able to find premium-free MA plans in your area, but these often have higher copayments. Part D's premiums also depend on the insurance company you buy the coverage from. Some MA plans include prescription benefits.

Deductibles and Copayments

• In addition to monthly premiums, you will be responsible for deductibles and copayments for certain services. The typical copay for Part B services is 20 percent of the Medicare-approved amount over the deductible. Part A hospital services are subject to a deductible, but no copay, for the first 60 days, after which per day copays apply. Preventive health screenings and one wellness visit per year are not subject to a copay. However, other office visits that include preventive care, like a flu shot, will be subject to the deductible.

Health Care Providers

• If you want to use Medicare, you have to get your services from a health care provider that accepts Medicare. If you purchase a Medicare Advantage HMO or PPO policy, you will also have to get all your services through your insurance company's approved provider network or pay higher copays.

Part D Donut Hole

• Medicare Part D prescription drug benefits come with what is called the "donut hole." Insurance covers a portion of your medication costs until you meet an initial coverage limit. After that, you pay all prescription drug costs yourself until you reach the catastrophic coverage threshold, when benefits kick in again. In 2011, new rules for Part D went into effect that allowed users who had gone in the hole to buy both name-brand and prescription drugs at a discount until they reach the catastrophic phase.