Medicare FAQ

(Frequently Asked Questions)

By Scott Kerby
Medicare Specialist

Who is eligible for Medicare?

You’re generally eligible for Medicare if you’re 65 or older, under 65 with a qualifying disability, or any age with End-Stage Renal Disease (ESRD – permanent kidney failure requiring dialysis or a kidney transplant).

What does Medicare Cover?

Medicare covers the following:

Medicare Part A (Hospital Insurance)

  • Inpatient care in hospitals
  • Skilled nursing facility care
  • Hospice care
  • Home health care

Medicare Part B (Medical Insurance)

  • Services from doctors and other health care providers
  • Outpatient care
  • Home health care
  • Durable medical equipment
  • Some preventive services

Medicare Part C (Medicare Advantage)

  • Includes all benefits and services covered under Part A and Part B
  • Usually includes Medicare prescription drug coverage (Part D) as part of the plan
  • Run by Medicare-approved private insurance companies
  • May include extra benefits and services for an additional cost

Medicare Part D (Medicare prescription drug coverage)

  • Helps cover the cost of prescription drugs
  • Run by Medicare-approved private insurance companies
  • May help lower you prescription drug costs and help protect against higher costs in the future
What is Medicare Part A?

Medicare Part A is hospital insurance and covers the following:

  • Inpatient care in hospitals
  • Skilled nursing facility care
  • Hospice care
  • Home health care
What is Medicare Part B?

Medicare Part B is medical insurance and covers the following:

  • Services from doctors and other health care providers
  • Outpatient care
  • Home health care
  • Durable medical equipment
  • Some preventive services
What is Medicare Part C?

Medicare Part C is Medicare Advantage and provides the following:

  • Includes all benefits and services covered under Part A and Part B
  • Usually includes Medicare prescription drug coverage (Part D) as part of the plan
  • Run by Medicare-approved private insurance companies
  • May include extra benefits and services for an additional cost
What is Medicare Part D?

Medicare Part D is prescription drug coverage and provides the following:

  • Helps cover the cost of prescription drugs
  • Run by Medicare-approved private insurance companies
  • May help lower you prescription drug costs and help protect against higher costs in the future
What is Medicare Advantage?

Medicare Advantage is an optional way to get your Medicare coverage. It consists of plans that operate like HMOs or PPOs. These plans are provided by Medicare-approved private companies.

If you join a Medicare Advantage Plan, you’ll still have Medicare but you’ll get your Medicare Part A (hospital insurance) ans Part B (medical insurance) coverage from the Medicare Advantage Plan, not original Medicare.

What is Medigap?

Medigap is another name for Medicare Supplement Insurance.

Original Medicare pays for many healthcare services and supplies, but not all of them. These gaps in coverage are where the term ‘medigap’ comes from.

Medicare Supplement Insurance policies are sold by private companies and can help pay for some of the healthcare costs that Medicare doesn’t cover like copayments, coinsurance and deductibles.

Medigap policies are identified by letters like A, C, F, and G. They offer varying degrees of coverage for corresponding monthly premiums.

You can learn more about the Arizona versions of these Medigap plans here.

What is Medicare Tax?

Medicare tax is part of the FICA tax that’s withheld from your paychecks over the course of your working life. If you’re self employed, your Medicare tax is part of your self-employment tax.

The Medicare tax is roughly 2.9% of your earnings. Half of that is paid by your employer.

The Affordable Care Act, also known as Obamacare, imposed a 0.9% Additional Medicare Tax on salaries over $200,000 per year. The Additional Medicare Tax is paid by your employer.

When to apply for Medicare

If you’re already receiving Social Security, you’ll automatically get enrolled in Medicare Part A and Part B starting the first day of the month you turn 65. If your birthday is on the first day of the month, Part A and Part B will start the first day of the prior month.

If you’re close to 65 and not yet getting Social Security, you’ll need to sign up. Contact Social Security 3 months before you turn 65.

IMPORTANT: If you don’t sign up for Part B when you’re first eligible, you may have to pay a late enrollment penalty for as long as you have Part B.

When does Medicare start?

If you’re already receiving Social Security, you’ll automatically get enrolled in Medicare Part A and Part B starting the first day of the month you turn 65. If your birthday is on the first day of the month, Part A and Part B will start the first day of the prior month.

If you’re close to 65 and not yet getting Social Security, you’ll need to sign up. Contact Social Security 3 months before you turn 65.

IMPORTANT: If you don’t sign up for Part B when you’re first eligible, you may have to pay a late enrollment penalty for as long as you have Part B.

How to sign up for Medicare

If you’re already receiving Social Security, you’ll automatically get enrolled in Medicare Part A and Part B starting the first day of the month you turn 65. If your birthday is on the first day of the month, Part A and Part B will start the first day of the prior month.

If you’re close to 65 and not yet getting Social Security, you’ll need to sign up. Contact Social Security 3 months before you turn 65.

IMPORTANT: If you don’t sign up for Part B when you’re first eligible, you may have to pay a late enrollment penalty for as long as you have Part B.

How much does Medicare cost?

Medicare Part A

You won’t have to pay a premium for Part A if you or your spouse paid Medicare taxes while working. If you aren’t eligible for premium-free Part A, you can buy Part A coverage under certain conditions. In 2015, people who had to but Part A paid premiums up to $407 each month.

Medicare Part B

You are responsible for paying the Part B premium each month. It is usually deducted from your monthly Social Security payment. In 2015 the standard premium was $105.

Medicare Part C (Medicare Advantage) and Medicare Supplement Insurance

The monthly cost of these plans varies by the amount of coverage you select. Arizona residents can get an online quote by using the free tool here.

Medicare Part D (Prescription Drugs)

Your drug plan costs will vary based on:

  • Your prescriptions and whether they’re on your plan’s drug list
  • The plan you choose. Plan costs can change every year, so be sure to compare your plan options during open enrollment each year.
  • The pharmacy you use
How does Medicare work?

Medicare is socialized medical care for senior citizens in the United States. It is managed by the federal government.

During your working life, you and your employers contribute a small percentage of your wages to Medicare. When you turn 65 (or become eligible through certain other conditions), you can enroll in Medicare and begin receiving healthcare benefits.

Some Medicare benefits, such as hospital coverage, will be available at no additional cost to you. Other benefits, such as medical coverage and prescription drug coverage, will be available for a monthly premium.

You’ll also have the option of purchasing additional healthcare coverage that Medicare doesn’t provide. These coverage plans are available through Medicare-approved private companies.

You can get free online quotes from some of these companies here.