Have you noticed the literal bombardment of medicare commercials that pop up on the television toward the end of each year? If you’re over 50, you’re probably taking notice, and that’s because you know that you’re closer to retirement than you are to the beginning of your career. In fact, retirement is a topic you start repeatedly getting asked about at cocktail parties and family reunions: How much longer do you have?
While you are about to be freed from the daily grind of working, you also need to be prepared for that freedom (which doesn’t come with a monthly paycheck). This is often why people brighten when they think about no longer working, then scowl when they think about the loss of income. And that’s where Medicare sometimes enters the conversation.
So if you are starting to hear the word “Medicare” more frequently in conversations or ads that the universe puts in front of you, whether on TV or your social media feeds, it’s probably time that you made sure you understand at least the basics of what Medicare is and what you can expect it to do for you. Here are a few basic, frequently asked questions about Medicare.
Q: What exactly is Medicare?
A: Simply stated, Medicare is a government-provided (federal) health insurance program for people age 65 and older. One caveat: Medicare may also be available for people under the age of 65 who are living with certain illnesses or disabilities.
Q: What is the main benefit of Medicare?
A: This may surprise you, but Medicare doesn’t pay for everything; it does, however, help you keep your medical expenses down after you retire and as you age.
Q: What are all the “parts” of Medicare that I hear advertised?
A: There are four parts to Medicare A, B, C, and D. Each part is designed for a specific area of coverage. The four parts of Medicare and what they cover:
- Part A: Hospital-related expenses and care (hospital insurance)
- Part B: Outpatient care and doctor appointments (medical insurance)
- Part C: Same as Parts A and B, but offered by private insurance companies (also called Medicare Advantage)
- Part D: Prescription drugs
Q: Does everyone pay the same premiums and co-pays with Medicare?
A: No, premiums vary among the different Medicare parts, as do deductibles. Factors that affect those costs to you are income and when you sign up. Don’t forget: Medicare offsets your healthcare costs, it doesn’t eliminate them entirely.
Q: If I qualify for Medicare, why do I need long-term care insurance?
A: Medicare Part A covers hospital or skilled nursing facility stays, but not long-term stays. For example, Medicare would pay a portion of your expenses while you are recuperating in a hospital or skilled nursing facility following an accident or temporary illness, but it would not cover all of your expenses for living permanently in a facility, or permanent home health care. This is why many people opt for separate long-term care coverage.
Q: What is Medigap?
A: Medigap, also called Medicare Supplement Insurance, is a separate (additional) health insurance policy offered by private insurers. Purchasing Medigap insurance can help you pay for costs that are not covered by Medicare Parts A and B.
One last point to keep in mind: If you aren’t eligible for Social Security benefits, you must sign up for Medicare. For those who are eligible to draw Social Security, you will automatically be enrolled in Medicare upon turning 65.