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Medicare Basic Benefits

Medicare is a health insurance program offered to senior citizens and others with certain disabilities by the federal government. It is administered by the Centers for Medicare and Medicaid Services, an agency of the Department of Health and Human Services. The Social Security Administration determines Medicare eligibility and processes the premium payments. Medicare consists of four types of services, referred to as Part A, Part B, Part C and Part D. Each part has specific coverage and rules.

  1. Background

    • Medicare is a government health insurance program for people 65 and older, those who are younger than 65 but who have certain disabilities and anyone who has end-stage renal disease. Medicare is partially funded through payroll taxes, which is a tax of 1.45 percent of every wage earner's income with a matching 1.45 percent paid by the employer.

    Medicare Part A

    • Medicare Part A is the first and most basic benefit offered by Medicare. Part A is also called hospital insurance, since it helps to pay for the costs of inpatient care at hospital facilities. This includes critical access hospitals, inpatient rehabilitation facilities and long-term care hospitals. You do not need to pay monthly premiums to receive Medicare Part A benefits because they are funded by the taxes you have paid. When you reach 65 years of age, the government automatically enrolls you if you have paid your taxes.

    Medicare Part B

    • Part B is also called medical insurance, since it helps pay for medical costs, such as doctor services and fees and preventive services. You will pay a monthly premium to receive Part B benefits. For this reason, enrollment in Part B is voluntary. When you reach 65, you will receive your Medicare card. If you do not wish to be enrolled in Part B, follow the instructions on your card and send it back. If you decide to enroll after you first become eligible at age 65, you may have to pay a late enrollment penalty.

    Medicare Part C

    • Medicare Part C offers the option to receive Medicare benefits through private companies that are approved by and under contract with Medicare, referred to as "Medicare Advantage Plans." Enrollment is voluntary. Medicare Advantage Plans provide all of the coverage from Part A and Part B, plus any additional benefits that a particular plan might have, such as vision, dental or health and wellness programs. Most include Medicare prescription drug coverage. You will pay a monthly premium to the company you choose.

    Medicare Part D

    • Medicare Part D is also voluntary and it helps pay for prescription drug costs. There are two types of plans--Medicare prescription drug plans and drug coverage offered under a Medical Advantage Plan. There is a monthly premium associated with Part D. Prices and types of drugs covered vary according to the plan or company chosen.

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