Medicare

Medicare is a federal health insurance program that provides coverage to people who are 65 years or older, as well as to some younger individuals with disabilities or certain medical conditions. The program is administered by the Centers for Medicare & Medicaid Services (CMS) and is funded by payroll taxes, premiums paid by beneficiaries and general tax revenues.

Medicare is divided into four main parts: Part A, Part B, Part C, and Part D.

• Part A of Medicare covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care services. Most people do not have to pay a premium for Part A if they or their spouse paid Medicare taxes while working.

• Part B of Medicare covers outpatient care, doctor visits, preventative services, and medical equipment. Part B requires a monthly premium, which is based on income.

• Part C, also known as Medicare Advantage, is an alternative to traditional Medicare. It is offered by private insurance companies and provides all the benefits of Parts A and B, as well as additional benefits like vision, dental, and hearing services.

• Part D of Medicare covers prescription drug costs. Private insurance companies also offer it and require a monthly premium, which varies based on the specific plan and the individual’s income.

Although Medicare provides extensive coverage, some services and items aren’t covered, such as long-term care, most dental care, hearing aids, routine foot care and cosmetic surgery. Additionally, Medicare has limitations on the amount of coverage for certain services, such as physical therapy and mental health services. Some individuals purchase private supplemental insurance, known as Medigap, to fill these coverage gaps.