Medicare is a federal health insurance program for people 65 or older, younger people with disabilities, and people of any age with End-Stage Renal Disease (such as kidney transplant or permanent kidney failure requiring dialysis.) The Medicare program pays a portion of hospital and other medical bills.
The Medicare program is run by the Centers for Medicare and Medicaid Services (CMS). CMS is a federal government agency.
The Social Security Administration (SSA) cooperates with CMS by enrolling people in Medicare and collecting the premiums. CMS also hires private insurance companies to process and pay Medicare claims.
In order to receive Medicare coverage, your medical services must come from one of the following:
- Hospital, or
- Other health service provided enrolled in Medicare
Most doctors and medical providers participate in Medicare.
Types of Medicare
There are 4 parts to Medicare: A, B, C, and D.
Medicare A: Hospital insurance and Medicare B: Medical insurance
Under Medicare, the federal government provides coverage under Part A and Part B. You have your choice of doctors, hospitals, and other providers. Generally, you or any supplemental insurance you buy will pay the deductibles and coinsurance. You usually pay a monthly premium for Part B.
Medicare Part A covers:
- Inpatient hospital care
- Skilled nursing home care
- Hospice care
- Home health care
Medicare Part B covers:
- Medically necessary doctors' services and supplies
- Outpatient care
- Home health care
- Durable medical equipment
- Certain preventive services to maintain health and prevent certain illnesses
Medicare C: Managed care
A Medicare Advantage Plan (like an HMO or PPO) is another Medicare health plan choice you may have as a part of Medicare. Medicare Advantage Plans, sometimes called Part C, are offered by private companies that are approved by Medicare.
Medicare pays the same amount for your care every month to the companies offering Medicare Advantage Plans. These companies must follow rules set by Medicare.
If you join a Medicare Advantage Plan, the plan will provide all of your Part A (hospital insurance) and Part B (medical insurance) coverage, although it does not need to cover hospice care.
Learn more about Medicare Part C.
Medicare D: Prescription drug coverage
Medicare Part D plans will help pay for certain prescription drugs. Medicare Part D is run by private insurance companies approved by Medicare. These private insurance companies follow the rules set by Medicare. Eligible people can choose to join a prescription drug plan.
Most people will have to pay premiums, a deductible and copayments. But there is extra help from the government to pay some or all of these costs for certain low-income persons. The plans will vary in coverage and cost. You can choose from different plans.
Learn more about Medicare Part D (prescription drugs).
You can decide if you want to get extra insurance coverage that fills gaps in the original Medicare coverage and your special needs. This is called Medigap or Medicare Supplment Insurance Policies. You can choose to buy a Medigap policy from a private company. Costs vary by policy and company. Some employers or unions may offer similar coverage.
Learn more about Medigap.
Note: If you join a Medicare Advantage Plan, you don't need a Medigap policy. If you already have a Medigap policy, you can't use it to pay for out-of-pocket costs you have under the Medicare Advantage Plan. If you already have a Medicare Advantage Plan, you can't be sold a Medigap policy.
More Medicare information
For general information about Medicare or to obtain Medicare publications, call 800-633-4227 (toll free) or 800-820-1202 (TTY) or visit Medicare's website.
These are some good internet resources to help you learn more about Medicare:
- The American Association of Retired Persons: This portion of AARP’s website provides a guide to Medicare, focusing on traditional Medicare coverage, Medicare prescription drug coverage, and Medigap plans.
- Centers for Medicare and Medicaid Services: The website of the Centers for Medicare and Medicaid Services (CMS) describes the programs and activities of CMS, the federal agency that administers Medicare, Medicaid and the State Children’s Health Insurance Program (SCHIP), with links to information on all of these programs.
- Medicare Rights Center: The Medicare Rights Center (MRC) provides free counseling services to ensure that older adults, people with disabilities, and Medicare beneficiaries have access to good, affordable health care. This site provides basic information about Medicare, covering frequently asked prescription drug coverage. A glossary of Medicare terms and a chart that compares Medicare plan options are included.