Medicare is a health insurance program funded by the federal government. It is available to all U.S. citizens aged 65 and older. Medicare is even available to persons younger than 65 with certain health conditions. Medicare can be a huge financial relief to those struggling with the rising costs of healthcare. But it is important to understand how the program works to maximize the benefits your loved one receives.
Medicare benefits are paid for through a combination of payroll taxes and Social Security premiums. These benefits are divided into four different parts:
- Part A is hospital insurance. It helps with the cost of hospitalization, care at a skilled nursing facility, home health care, and some hospice fees. If your loved one or their spouse paid Medicare tax during their employment, they shouldn’t need to pay for Part A. Otherwise, coverage can be purchased for a monthly premium. It is important to note that Medicare typically does not cover the costs of long-term care.
- Part B is medical insurance. It helps with the cost of medical appointments and other outpatient care, such as lab work. It also provides coverage for the costs of home health care and necessary medical equipment. A monthly premium applies. Your loved one does not need to enroll in Part B if they don’t need it. They will be able to opt out of enrollment when they apply for Medicare.
- Part C is called Medicare Advantage. It includes coverage for Parts A and B. It also provides optional prescription drug coverage and coverage for costs that basic Medicare won’t cover. For example, it may help with the costs associated with vision and dental care. Costs are covered through private insurance companies pre-approved by Medicare. A monthly premium applies.
- Part D is prescription drug coverage. It is also run by approved private insurance companies. You’ll need to choose a coverage plan based on the prescriptions your loved one needs, since different plans cover different drugs. You can then change your plan each year, as your loved one’s needs change. A co-pay set by the insurance company applies to each prescription. Note that if your loved one has a limited income, they may qualify for extra aid for prescription drugs.
The Social Security Administration recommends applying for Medicare three months before your 65th birthday, even if you are not yet receiving retirement benefits. Your loved one can apply for Medicare over the phone or by appointment at a local Social Security office. If Dad is computer savvy, he can even apply online. It takes just a few minutes and he will be able to track the status of his application right from home. After he has enrolled, he will be able to access and manage some of his Medicare benefits online.