Medicare basics

Traditional Medicare (Parts A and B) provides basic health services but with some costs born by beneficiaries through premiums and co-payments. And unlike most private health insurance plans, Medicare has no overall limit on out-of-pocket expenses-which means you face risk in cases of the most serious, care-intensive illness. The basic program also doesn’t cover dental expenses, and over-the-counter medicines.

Enrollment in basic Medicare is automatic at age 65 if you already receive Social Security benefits–your Medicare card will be mailed to you about three months before your eligible date. Otherwise, you’ll need to enroll. Visit your local Social Security office, or call the Social Security Administration at 1-800-772-1213. You can apply online in most cases at the Social Security Administration website.

Note well: If you’re not receiving Social Security at age 65, contact the Social Security Administration three months before your 65th birthday to get the process started. This is important for ensuring that you won’t experience gaps or delays in coverage–and to avoid a possible permanent 10 percent increase in your annual premium for enrolling late. Also, if you stop working and want to switch from your former employer’s plan to Medicare, you must sign up within eight months, or you’ll need to wait until the next general enrollment period, which runs from January 1 to March 31 each year.

Part A

Medicare Part A covers stays at participating hospitals, including skilled nursing facilities. When Medicare beneficiaries are hospitalized, they pay a deductible that covers an initial period of care, with co-payments after that period.

 

Part B

Medicare Part B generally covers outpatient services, including physician and nursing services, tests, vaccinations, and a variety of therapies and other services. Medicare publishes a schedule of approved provider charges for various services, and pays 80 percent of those rates. Patients pay the other 20 percent plus an annual deductible. You can go to any health provider that accepts Medicare. Doctors are permitted to charge more than the scheduled rates under certain circumstances, but beneficiaries can’t be charged more than 15 percent higher than the scheduled prices-although many physicians accept the Medicare reimbursement rate as payment in full.

Click here for a summary of 2014 Medicare premiums and deductibles.

Resources

Medicare and You Handbook. The U.S. Department of Health and Human Services publishes an annual guide to the program containing everything you’d every want to know about Medicare. A copy is mailed every fall to current recipients, but the 2012 edition also can be downloaded at no charge here: www.medicare.gov/publications/pubs/pdf/10050.pdf.

Medicare Rights Center. (Non-profit group provides free advice and counseling on Medicare issues, including selection of Part D, Advantage and Medigap plans. 1-800-333-4114.

Comparing Medicare options. The Medicare website offers an online tool that lets you compare traditional Medicare with Advantage, Medigap and Part D plans.

Track your benefits. Current beneficiaries can view claim status, order forms and cards, view eligibility information and more online at the official Medicare website.

Coordinating Medicare and private benefits. This Medicare-produced guide explains how Medicare works with other kinds of insurance or coverage and who should pay your bills first. The guide can be very helpful for those with retiree coverage, COBRA or other private insurance that must be coordinated with Medicare. Click here to download a PDF of Medicare and Other Health Benefits: Who Pays First.

National Medicare Hotline. Medicare will answer questions about the basic program, prescription drug benefits and Medicare Advantage plans at its national hnotline, 1-800-MEDICARE.

The Henry J. Kaiser Family Foundation’s website maintains a well-respected online guide to Medicare.

AARP’s Daily Bulletin has a useful Medicare Guide for Boomers that covers enrollment schedules, what Medicare does and doesn’t pay for and links to further resources.