Medicare is a federal health insurance program designed for people who are elderly, or those who have certain disabilities or medical conditions. Most people qualify for this type of coverage when they meet the required minimum age, but it is also possible to qualify earlier if you have a health condition or disability that makes you eligible.

Medicare benefits are funded from several different sources, including taxes you pay on your income, the federal budget and premiums that you pay for your coverage. You may qualify for certain parts of Medicare insurance at no cost if you have worked and paid taxes for enough years. However, other types of coverage will require paying a premium and other fees. Below, learn more about this health insurance option, including what you need to know before starting your coverage.

What is Medicare, and how does it operate?

This insurance program is run by the Centers for Medicare & Medicaid Services (CMS). Originally, it was created in 1965 in order to provide health insurance for older Americans after retirement. It was then expanded several years later in order to include younger individuals who had qualifying disabilities or medical conditions. Through this program, health insurance was made available for millions of individuals who had no other option for coverage.

Originally, the Medicare health insurance program only included hospital insurance and medical insurance. However, in 2003 the program began allowing approved private health insurance plans in addition to the original types of coverage offered. A few years later, the program was expanded again to include prescription drug coverage as well

Who can get Medicare insurance?

Although there have been expansions and changes throughout the program’s history, it is important to understand that Medicare health coverage has always been an entitlement program, meaning that you are guaranteed benefits as long as you meet the eligibility criteria for the program. Your income is not generally a factor in determining whether you can get coverage. However, it may affect how much you pay for your premiums.

Similarly, as long as you meet the Medicare age requirements, your health conditions do not affect your eligibility either. Keep in mind that if you do not meet the minimum age requirement, you must have a qualifying health condition or disability in order to sign up for coverage.

Overall, Medicare benefits are available only to U.S. citizens and permanent residents of the U.S. as well as Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands and American Samoa. However, certain services and resources are only offered in the states, and are not available to residents of these territories.

About Medicare Plans

Medicare insurance works in a similar way to traditional health insurance coverage, in that it helps you pay for certain medical needs. However, it is important to understand that there are four parts of the program, and each one works in a different way. The following list describes the options available:

• Part A, also known as hospital insurance, pays for inpatient care, hospice care and other essential services.
• Part B, also known as medical insurance, covers outpatient care, certain types of medical equipment and doctor’s visits.
• Part C, also referred to as “Medicare Advantage,” is a comprehensive, private insurance plan that usually combines the benefits of Part A, B and D into one plan.
• Part D, also known as prescription drug coverage, simply helps you pay for prescription drugs.

Medicare insurance coverage can work alone or in conjunction with other types of insurance if you are still receiving benefits from a different plan. In some cases, Medicare will pay for your health care needs first, while your secondary coverage covers any remaining costs.

If you are currently working or still receiving benefits from an employer, it is in your best interest to ask how your insurance will be affected. Your employer can help you understand all of the Medicare information that applies to your individual situation. Find out more about the different plans available when you download our complete Medicare assistance guide.

How to Choose the Right Medicare Benefits

Different Medicare plans may be combined in order to get the type of coverage that you need. For example, it is common to choose both Part A and Part B if you want to cover inpatient and outpatient care, as well as doctor’s visits.

The term “Original Medicare” is used to describe a plan that includes both Part A and Part B. People who obtain this type of coverage will sometimes add Part D insurance for even greater coverage. As an alternative, it is also common to choose a Part C plan, which usually includes benefits from all the other Parts in one plan, in addition to other health care services that are not included with basic coverage.

Ultimately, the Medicare insurance benefits you choose will depend on your eligibility, health needs, budget and personal preferences. Some types of coverage are provided at no cost as long as you meet the eligibility requirements, such as paying income taxes for enough years. Other benefits will require paying a premium no matter what.

Note: Medicare insurance is not accepted by all doctors. When choosing a plan, be sure to think about which medical needs you want to cover, then consider the doctors and health care networks that you will be allowed to use. There are various tools available that will help you choose the correct type of coverage and find health care providers that you can use with your insurance.

What other Medicare information do I need to know?

One of the most important things to understand about Medicare is how enrollment works. In some cases, you will automatically begin receiving coverage as soon as you are eligible. Other times, it is your responsibility to make sure you sign up on time. Failing to meet the enrollment deadline can result in penalties such as fees and higher premiums. Therefore, it is important to be aware of your own eligibility for coverage so that you are prepared once you qualify.

As your health needs change, it is likely that your insurance needs will change as well. If you are unsure of when to sign up and what Medicare plan to choose, keep in mind that you have the option of changing your coverage during certain enrollment periods in the future. To learn more about coverage with this program, download our comprehensive Medicare guide.