Medicare 101: the basics

People often confuse Medicare with Medicaid – two programs which sound very much alike, and which often serve the same people, but are different. So what is Medicare?

Medicare is health insurance for people ages 65 and older, and for people under age 65 with certain disabilities or health conditions. In short, eligibility for Medicare is based on age, and/or certain health conditions.

Medicaid helps pay medical costs for persons of any age who have limited income and resources. Medicaid is funded jointly by the federal and state governments, but is administered by the state, which determines eligibility based on the income and resources limits it sets. A person who is eligible for Medicare may also be eligible for Medicaid, based on income.

Medicare has four main parts, Parts A,B, C and D. Each part covers specific services and benefits, or provides different options for coverage. Here is a brief summary of the Medicare “alphabet soup”:

• Part A (hospital insurance) helps cover inpatient care in hospitals, skilled nursing facilities, hospice and home health care.

• Part B (medical insurance) helps cover services from doctors and other providers, outpatient care, home health care, durable medical equipment and some preventive services.

• Part C (Medicare advantage) is run by Medicare-approved private insurers, and includes all benefits and services covered under Parts A and B, and usually Part D; it may also include extra benefits at additional cost.

• Part D (prescription drug coverage) is run by Medicare-approved private insurers and helps cover the cost of prescription drugs.

As with most health insurance, there are monthly premiums, annual deductibles and copayments or co-insurance associated with Medicare. Medicare Part A is premium-free if you have worked and paid taxes for at least 40 quarters (the equivalent of 10 years), but you are responsible for meeting a deductible for each benefit period, $1,184 in 2013, and paying co-insurance for Medicare-covered care. A benefit period begins the day you are admitted as an inpatient and ends when you haven’t received any inpatient care for 60 day in a row.

For Part B, the monthly premium for 2013 for most beneficiaries is $104.90, the annual deductible is $147 and you generally pay 20 percent of Medicare-covered services. For Parts C and D, in addition to paying the monthly Part B premium, you also pay monthly premiums in addition to deductibles and co-insurance, all of which vary by plan.

You become eligible for Medicare upon reaching age 65, or, if you are under age 65 and disabled, you become eligible 24 months after you start receiving Social Security Disability Insurance (SSDI), or certain disability benefits from the Railroad Retirement Board (RRB). Also, if you have End State Renal Disease (ESRD) or ALS (Lou Gehrig’s disease), you become eligible the month your disability benefits begin.

There is a lot to know and think about when it comes to Medicare, and how to make the most of its many benefits. Fortunately, there is a lot of good information and help available at your fingertips and in your community. Resources include the “Medicare & You” handbook, mailed to all Medicare beneficiaries; the Medicare website (medicare.gov); 800-MEDICARE (800-633-4227; for TTY users, 877-486-2048); the Social Security website (socialsecurity.gov), and toll-free number (800-772-1213; TTY users call 800-325-0778). In addition, VICAP, the Virginia State Health Insurance Program, can provide personalized help in your community; in Virginia, you can call 800-552-3402 to get the help you need.

Nancy B. O’Connor is the Medicare regional administrator for Delaware, Maryland, Pennsylvania, Virginia, West Virginia and the District of Columbia.