Medicare, passed in the US in 1965, is a Federal government program that provides health care to the elderly (over 65), disabled (two years after first finding of disability), and those with End Stage Renal Disease (ESRD) that is dialysis-dependent. Contrary to those Americans who want “the government to keep their hands off my Medicare”, it is most definitely a government entitlement program that is run by the Federal Centers for Medicare and Medicaid Services (CMS), a part of the Department of Health and Human Services.
This section of the web site attempts to briefly and simply answer some of the most common Medicare questions. Some items are covered in much greater detail in other sections.
Medicare is funded by payroll tax contributions from employers and employees and by general tax revenues.
Medicare original consisted of Part A, hospital insurance, and Part B, medical insurance. This combination is now called “Original Medicare.”
The program has been amended over the years and now includes, in addition to Parts A and B, Part C, Medicare Advantage Plans, and Part D, Prescription Drug Coverage. Part C is an alternative to Parts A and B and some Part C plans include prescription drug benefits. For the full spectrum of coverage, one needs Parts A and B and C, or Part C or (depending on the Part C plan selected) Part D.
Who Is Eligible for Medicare?
United States Citizens and lawfully admitted permanent residents are eligible for Medicare, provided that they have worked enough quarters in covered occupations to quality. Those who have fewer than 40 quarters of coverage can obtain Part A by paying a monthly premium of $274 if they have between 30 and 39 quarters and $499 per month if they have fewer than 30.
If you are eligible for Part A, you are eligible for Part B. The Part B premium in 2022 for the vast majority of people is $170.10. (Some higher-income earners pay more.)
How Can One Enroll in Medicare?
If you are receiving Social Security, you are automatically enrolled when you turn 65. If not, you can apply online at www.medicare.gov. If you are automatically enrolled, you will be enrolled in Part A (hospital insurance) and Part B (medical insurance) at the same time. If you do not want Part B, you will have to contact Medicare to refuse it. To have Part C, one must also enroll in Part B. It is not necessary to enroll in Part B in order to have Part D.
Does Medicare Have an Out-of-Pocket Limit?
Original Medicare does not, and this is one of its biggest defects. Medicare Advantage Plans do have an out-of-pocket limit, which is set at no more than $7,550, although plans are allowed to offer lower limits.
It is important to understand that in dealing with Medicare, the only way to definitely control one’s out-of-pocket costs is to enroll in a Medicare Advantage Plan. Original Medicare and Medigap plans simply do not have out-of-pocket limits.
Does Medicare Cover Care Outside the US?
Sadly, no. Your Medigap plan or Medicare Advantage Plans may, but are not required to. So you cannot get your care in Mexico and expect Medicare to pay for it.
Can One Have Medicare and Medicaid?
The answer is “yes.” People who have both programs are called “dual eligibles.” For them, Medicaid pays some of the costs of Medicare, and Medicare pays some of the costs of Medicaid. Dual eligible can enroll in Medicare Advantage Plans.
Because Medicare is a Federal program and Medicaid is a state/Federal partnership program, the relationship can get complicated, and is highly dependent on one’s state of residence.