For most Americans, Medicare is on the distant horizon. But as you approach retirement age, knowing about Medicare and what it can or cannot do for you could be important to your physical and financial well-being.
You'll be automatically enrolled in the program if you're already collecting Social Security or receiving benefits from the Railroad Retirement Board when you turn 65 -- or if you've been collecting disability for more than two years. But if you're working and not collecting government pension benefits, you need to sign up three months before your 65th birthday.
The Medicare program isn't exactly "free"
government-sponsored health care. You'll have to pay
deductibles and co-payments out of pocket, and certain
services aren't covered at all.
What you'll ultimately pay for your future medical care will depend on the type of Medicare plan you choose, whether you'll have additional health insurance coverage from a former employer, whether you've purchased "supplemental coverage" and how often you make use of the medical services offered by your doctor or hospital.
|You have several options, and they're not cut-and-dry. Here's what you need to know to make intelligent decisions about your insurance coverage.
|The ins and outs of Medicare
"Unfortunately, answering what Medicare
does and does not cover ... well, to do that fully and
accurately would lead to a very broad and wide-ranging
discussion," says Peter Ashkenaz, a spokesman for
the Centers for Medicare and Medicaid Services. "So
what we recommend is that people access the Medicare
site and download and read the 'Medicare & You
However, if you're not willing to wade
through 120 pages of government-issue text just yet,
here's a synopsis of what you need to know.
The original Medicare plan: parts A & B
The original Medicare plan is designed to help pay
for certain medical services and supplies provided
in hospitals, doctors' offices and other health care
settings. Medicare Part A focuses on hospital insurance
while Part B is the program's medical insurance component.
All U.S. citizens and legal residents of the United
States who have paid Medicare payroll taxes for a
minimum of 10 years will be eligible for Part
A and Part B coverage upon reaching age 65.
Part A basically helps people better
absorb the costs associated with inpatient care in
hospitals (including inpatient rehabilitation facilities),
inpatient stays in a skilled nursing facility (but
not custodial or long-term care), inpatient mental
health care in a psychiatric hospital (limited to
190 days in a lifetime), as well as hospice care services
and home health care services. Some of the costs associated
with these services and procedures will be covered
completely by Medicare Part A. Others will require
out-of-pocket co-payments or the satisfaction of annual
Part B coverage helps pay for "medically necessary" services such as doctors' services,
outpatient care and other medical services not covered
by Part A. Part B also helps pay for some preventive
care services that are designed to prevent or detect
illness at an early stage, when treatment is likely
to work best. (For a list, see pages 18 to 25 of the