An Explanation of Medicare & Supplemental Insurance at Age 65

Medicare is a health insurance program offered mainly to people aged 65 or older. It is possible to get Medicare if you are younger than 65 with certain health conditions or disabilities, but the vast majority of beneficiaries are senior citizens. Original Medicare comes in two parts, A and B, which offer different benefits. There is also Part C, usually called Medicare Advantage, and Part D prescription coverage. Medicare beneficiaries can purchase supplemental Medicare policies, too.

Enrollment

• Unless you are already receiving Social Security benefits, you will have to enroll yourself in Medicare. You can enroll in original Medicare during your birthday month, or the three months before and after your birthday month. You are not required to enroll in both A and B, but if you initially turn down Part B and want to sign up for it later, you will have to pay late enrollment penalties.

Parts A and B

• Original Medicare's two parts offer different benefits. Part A is often premium-free and covers hospice care, home health services and inpatient hospitalization. Part B has a low monthly premium and has benefits for more preventive services, such as wellness programs, health screenings, outpatient hospital care and doctor visits. The monthly premium for Part B Medicare is $115.40 for new beneficiaries as of 2011.

Medicare Advantage

• Private insurance companies, rather than the government, provide Medicare Part C, usually called Medicare Advantage. MA plans bundle all the benefits of original Medicare, except for hospice, with additional benefits such as vision, dental and prescription medications. The exact costs, rules and benefits depend on the company where you buy your plan. Insurers offer MA plans in several different ways, such as HMOs, PPOs, special needs plans and plans to work with medical savings accounts.

Part D

• While some Medicare Advantage plans provide prescription drug coverage, you can also get them as part of a stand-alone policy if you have either Part A or Part B Medicare. Companies sell Part D plans according to area; they do not offer all plans in all states or counties.

Medigap

• If you want to purchase more health insurance benefits, you can buy one of the standard Medicare supplemental policies, often referred to as Medigap. Companies do not offer all plans in all states, but Medigap benefits include coinsurance and copays for Parts A and B. They also cover the costs of the first three pints of blood per year, deductibles and foreign travel emergency coverage. No Medigap plan includes prescription medication benefits.