Medicare & Its Benefits

Medicare – Overview

Medicare is a federal government program that provides health care coverage (insurance) to people aged 65 and older, those under 65 who have been receiving Social Security Disability Insurance (SSDI) for a specified period of time, and those under 65 who have End-Stage Renal Disease (ESRD). Medicare is administered by the Centers for Medicare & Medicaid Services (CMS), a federal agency. The program is partially funded by the Social Security and Medicare taxes you pay on your income, partially by the Medicare premiums you pay, and partially by the federal budget.

Once you become eligible for Medicare and enroll, you have the option of receiving your benefits through Original Medicare, the traditional fee-for-service program administered directly by the federal government, or through a Medicare Advantage Plan, a type of private insurance offered through companies that contract with Medicare (the federal government). Original Medicare entails the following:

Part A (hospital/inpatient coverage)
Part B (Medical/outpatient coverage)
If you wish to enroll in a stand-alone Medicare private drug plan (Part D) in addition to Original Medicare, you must generally actively choose and join a stand-alone Medicare private drug plan (PDP).

If you enroll in a Medicare Advantage Plan, you retain Medicare coverage. This means that you will continue to be responsible for a monthly Part B premium (and your Part A premium, if you have one). Each Medicare Advantage Plan is required to cover all Part A and Part B services covered by Original Medicare, but does so under its own set of rules, prices, and limits that may change how and when you receive care. Part D coverage is also available through Medicare Advantage Plans. Keep in mind that if you have health coverage through a union or current or past employer at the time you become eligible for Medicare, you may be automatically enrolled in one of their Medicare Advantage Plans. You have the option of remaining enrolled in this plan, switching to Original Medicare, or enrolling in another Medicare Advantage Plan, but you should consult with your employer/union prior to making any changes.

It is critical to understand your Medicare coverage options and to make prudent coverage selections. How you obtain benefits and from whom you obtain them can have an effect on your out-of-pocket payments and where you can receive care. For example, Original Medicare covers visits to practically all physicians and hospitals in the country. On the other hand, Medicare Advantage Plans typically include network restrictions, limiting your access to doctors and hospitals. However, Medicare Advantage Plans may offer extra benefits not covered by Original Medicare, such as routine vision and dental care.

Medicare is distinct from Medicaid, another government-run health insurance program. Medicaid is funded and administered by the federal government in collaboration with states to provide coverage for persons with low incomes. Medicaid may be provided to those with incomes below a particular level who meet certain requirements (e.g., age, handicap status, or pregnancy), or it may be available to all people with incomes below a certain level. Bear in mind that, unlike Medicaid, Medicare eligibility is not income-based. Additionally, those who are eligible for both Medicare and Medicaid are referred to as dual eligibles.

Each Medicare beneficiary is issued a red, white, and blue Original Medicare card. If you prefer to be covered by Original Medicare, you will provide this card when seeking services. If you elect to get your Medicare benefits through a Medicare Advantage Plan, you will continue to receive an Original Medicare card but will need to provide your Medicare Advantage Plan card while receiving services. Provide your Medicare number solely to your doctors and health care providers, regardless of how you obtain your Medicare health benefits.