Medicare
Key Takeaways
- Medicare is a federal health insurance program for people aged 65+ and certain younger individuals with disabilities
- It consists of four parts: A (hospital), B (medical), C (Medicare Advantage), and D (prescription drugs)
- Most people don't pay a premium for Part A if they've worked enough quarters
- Part B has a monthly premium based on income
- Use our Health Insurance Calculator to plan for Medicare costs
What is Medicare?
Medicare is a US federal health insurance program that provides coverage for people aged 65 and older, as well as certain younger individuals with disabilities or end-stage renal disease. It was established in 1965 as part of the Social Security Act.
Medicare is funded by payroll taxes, premiums paid by beneficiaries, and general revenue from the federal government.
How Medicare Works
Funding Sources
Medicare is funded by three main sources:
- Payroll Taxes: Paid by employees and employers
- Beneficiary Premiums: Paid by Medicare recipients for Parts B and D
- General Revenue: From the federal government
Enrollment
You're automatically enrolled in Medicare Parts A and B when you turn 65 if you're already receiving Social Security benefits. Otherwise, you need to sign up during your Initial Enrollment Period, which starts three months before your 65th birthday.
Medicare Parts
Eligibility
You may be eligible for Medicare if you meet one of these criteria:
- Age 65+: Individuals who are US citizens or permanent residents
- Under 65 with Disabilities: Individuals receiving Social Security Disability Insurance for 24 months
- End-Stage Renal Disease: Individuals with permanent kidney failure requiring dialysis or transplant
- Lou Gehrig's Disease: Individuals with ALS automatically eligible
Medicare vs. Medicaid
Medicare is a federal program primarily for seniors and disabled individuals, while Medicaid is a joint federal-state program for low-income individuals and families. Some people qualify for both programs (dual eligibility).
Estimate Your Medicare Costs
Planning for Medicare expenses? Try our Health Insurance Calculator to understand your potential premiums, deductibles, and out-of-pocket costs.
Frequently Asked Questions (FAQ)
Q: When should I sign up for Medicare?
A: Your Initial Enrollment Period starts three months before your 65th birthday and ends three months after. If you miss this window, you may face late enrollment penalties.
Q: Do I need Medicare if I have employer-sponsored insurance?
A: It depends on your situation. If you're still working and have group health coverage, you may be able to delay Medicare enrollment without penalty.
Q: What's the difference between Original Medicare and Medicare Advantage?
A: Original Medicare (Parts A and B) is run by the government. Medicare Advantage (Part C) is offered by private insurance companies and often includes extra benefits like dental, vision, and prescription drug coverage.
Q: Does Medicare cover long-term care?
A: Medicare covers limited skilled nursing facility care and home health care, but generally does not cover custodial care or long-term nursing home stays.
Authority Sources
- Medicare.gov - Official U.S. government Medicare website
- Centers for Medicare & Medicaid Services (CMS)
- U.S. Department of Health and Human Services (HHS)
- Social Security Administration
Related Terms
This content is for informational and educational purposes only and should not be construed as legal, financial, or medical advice. Insurance policies and coverage details vary by provider and state. Always review your policy documents carefully and consult with a licensed insurance professional before making decisions about your health coverage.