Each Part of Medicare and What It Covers
- Learn what you need to know about Medicare benefits and policies. Find out how the program works, what services are covered or not covered and how to sign up.
Medicare is the federal health insurance program for eligible beneficiaries in the United States. Originally enacted in 1965, the program is currently administered by the Social Security Administration, an independent agency of the federal government.
Seniors in the United States generally become eligible for Medicare benefits at age 65, or when they are diagnosed with a long-term disability at a younger age. As a rule, beneficiaries must be U.S. citizens or legal permanent residents with a minimum work history to receive benefits.
Medicare is paid for mainly by the Social Security Administration, but its benefits are delivered in several ways, depending on beneficiaries' needs.
You don't need a copy of Medicare for Dummies to understand Medicare. The basic division of Medicare is into two main plan options: publicly funded and administered Original Medicare (Medicare Part A and Part B) and privately sold Medicare Advantage (Medicare Part C).
Until 2006, Original Medicare consisted only of Parts A and B. Part C was introduced in 2006 as an alternative to traditional Medicare provided by private insurance companies.
From 2006 on, Medicare also offers a prescription drug benefit called Medicare Part D. Part D Prescription Drug Plans (PDP) are sold by private insurance companies.
Part A is the first component of Original Medicare. This benefit pays for much of the cost of hospitalization and inpatient care.
What does Part A cover?
Medicare Part A plans include coverage for most inpatient services, including:
- Inpatient care in a hospital
- Skilled nursing facility care
- Short-term care in a post-acute nursing home facility, but not long-term care or assisted living
- Hospice services
- Home health care
Part A can cover hospitalization costs if you're admitted to a hospital on a doctor's order, the hospital accepts Original Medicare and the hospital administration approves your stay.
For benefits purposes, Medicare counts all of these facilities as inpatient hospitals that are generally eligible for payment:
- Acute-care hospitals
- Long-term care hospitals
- Critical-access hospitals
- Inpatient rehabilitation facilities
- Inpatient psychiatric facilities
- Inpatient care delivered as part of an approved clinical study
During your stay in a qualifying facility, Part A benefits include the daily charge for inpatient care, plus the assorted extra costs of care while you are a patient. These include:
- Shared and semi-private rooms
- Meal service, including special diet meals and snacks
- Registered nursing services
- Drugs administered as part of your regular treatments
- Medical services, supplies and other miscellaneous costs incurred as part of your stay
How much does Part A cost?
Most Medicare beneficiaries can get Part A benefits without paying a monthly premium, provided they have reached age 65 and paid into the Social Security system for at least 40 quarters, or 10 years, before becoming eligible for Medicare.
If you didn’t work long enough to qualify for premium-free Part A, your Part A premium could be $252 or $458 per month, depending on how long you worked and paid Medicare taxes.
While Part A does not charge a monthly premium for most of its beneficiaries, there are many costs left uncovered by the plan. Part A beneficiaries generally carry a deductible for each benefit period that in 2020 costs $1,408.
The Part A deductible is not annual, and you could potentially face more than one benefit period in a calendar year. The benefit period that the Part A deductible applies to starts when you are admitted for inpatient care, and it ends once you have been discharged and stopped receiving inpatient care for 60 consecutive days.
For example, consider you are admitted for inpatient hospital care on June 1 and are released on June 8, and you are then readmitted for inpatient care again on June 15. Because you are still in the same benefit period, you wouldn’t need to hit your Part A deductible again before your benefits kick in.
If you are discharged on June 8 and are readmitted for inpatient care in October of the same year, you would be in a new Part A benefit period. This means you would have to meet your Part A deductible again, even if you reached your deductible during your June hospital stay.
In addition to the deductible, Part A benefits carry a coinsurance requirement.
- During the first 60 days of treatment, the coinsurance amount charged is $0.
- During days 61 through 90, the cost rises to $352 each day for the benefit period in 2020.
- On day 91 and beyond, the cost is $704 a day for up to 60 lifetime reserve days.
Beneficiaries are allotted a maximum of 60 lifetime reserve days that may be used after the 90-day allowance per benefit period. These 60 days are added to a Part A account when the beneficiary enrolls, and they are never replaced. Once the lifetime reserve days are exhausted, beneficiaries are responsible for the entire daily cost of hospitalization.
In addition to these services, your doctor may prescribe treatments that are not automatically covered by your Medicare benefits. This is especially likely during a hospital stay, when you may not be fully aware of all that is being done for you.
To the fullest extent possible, try to discuss prescribed treatments with your doctor to make sure your benefits cover the likely cost.
Part B is the second main component of Original Medicare.
Part B coverage is geared toward outpatient and medical services. Medical office visits, home visits and ambulance services usually fall under Part B plan coverage.
What does Part B cover?
Part B typically covers costs for:
- Medically necessary services and supplies needed to diagnose or to treat a medical condition. This includes diagnostic testing in many cases, as well as durable medical equipment (DME) and some other medical supplies.
- Preventive services, including routine checkups and diagnostic office visits. In most cases, preventive care is free at the point of service if the provider accepts Medicare assignment.
- Limited outpatient drugs. These include some vaccinations, IV antibiotics and other prescription medications that are typically dispensed in a clinical setting. Part B does not pay for retail drugs you pick up at a pharmacy.
- Limited mental health care, including non-residential drug and alcohol rehabilitation services and outpatient clinical observation.
- Both emergency and non-emergency medical transportation, provided the non-emergency transportation is provided by a BLS/ALS/Critical Care ambulance service that accepts Medicare, and the ride has been authorized by a physician as medically necessary.
- Some clinical research, such as experimental drug trials and disease research. This can include Alzheimer's research and some experimental therapies for dementia.
How much does Part B cost?
Part B coverage comes at a monthly cost for beneficiaries. Congress adjusts the premiums, deductibles and copayment amounts charged under Medicare Part B each year as part of its annual adjustment of the Social Security Act.
In 2020, the standard monthly premium for Part B is $144.60. This is an increase of $9.10 a month over the 2019 figure.
Since 2007, Part B premiums have been adjusted upward for beneficiaries who earn income significantly higher than the national average. This is called the income-related monthly adjustment amount (IRMAA).
Single seniors who receive Medicare Part B coverage and earn $87,000 or less a year, or $176,000 for married couples, pay the standard premium of $144.60 a month. Above that level, beneficiaries' premiums rise with income to a maximum monthly cost of $491.60 for those who earn more than $500,000 a year as single income tax filers, or $750,000 a year as married couples.
Part B premiums are often deducted from seniors' pension checks. If you receive retirement benefits from Social Security, the Railroad Retirement Board or the Office of Personnel Management, your Part B premiums are likely deducted in this way.
For beneficiaries who don’t receive retirement income from these sources, the Social Security Administration may send a monthly bill for Part B premium costs.
In addition to the premium beneficiaries must pay, the annual Part B deductible in 2020 is $198, which is $13 more than in 2019.
After the annual deductible is reached, beneficiaries generally pay 20% of their service costs, with the other 80% paid for by Medicare.
Part C is not part of Original Medicare, but an alternative method of delivering services.1
Part C, which is also known as Medicare Advantage, is provided by private insurance providers who are authorized to bill the Social Security Administration on behalf of beneficiaries.
Medicare Advantage plans essentially replace a beneficiary’s Original Medicare coverage with a plan provided by a private insurance company who is reimbursed by the federal Medicare program for covering the beneficiary.
What does Part C cover?
By law, all authorized Part C plans must include the same benefits as Medicare Parts A and B, though many plans include extra coverage for services not traditionally covered by Medicare, such as dental and vision care.
In addition to Part A and B services, Part C plans can add extra coverage to expand seniors' care options. Most Medicare Advantage plans also include prescription drug coverage, though details vary considerably between companies, states and sometimes geographic areas of states.
How much does Part C cost?
Medicare beneficiaries who opt into Part C pay a single premium for both parts of their coverage, inpatient and outpatient, which streamlines delivery of care and helps to reduce the confusion of paying multiple premiums.
Beneficiaries in some parts of the country pay $0 premiums for their Medicare Advantage plan, though they are still required to pay their monthly Part B premiums.
What types of Medicare Advantage plans are available?
Part C plans are also diverse in the way they deliver care.
Though details of each plan vary, Medicare Advantage plan benefits generally are delivered in one of four ways:
Most Medicare Advantage plans are organized as health maintenance organizations, or HMOs.2 HMOs provide both insurance coverage and the services the coverage pays for via a wholly owned healthcare system.
Under an HMO plan, beneficiaries get most of their care from the same company. Most beneficiaries have one primary care physician who can direct their care and whose referral is usually needed for specialist visits or special diagnostic tests.
Going outside of the HMO provider network for medical care can be done, but plan participants may have to pay a large fraction of their costs, or they may wind up paying 100% of the price for out-of-network care.
Preferred provider organizations3 (PPO) are in some ways similar to HMOs, but they have much more flexibility built into them. PPO plans operate as networks of medical providers, who have all agreed to be bound by the plan's terms and price structure.
Beneficiaries are generally free to seek out practitioners they are comfortable with within this network of independent providers. Specialist visits and extra testing can often be arranged without prior approval, and it can be marginally easier to get care outside of the preferred network.
Many PPOs pay some or all of the cost of emergency care, regardless of where it is obtained, and plans generally have a provision for beneficiaries who need non-emergency care while traveling in an area not served by the network. Out-of-network care typically costs more than care received in the plan network.
Private fee-for-service (PFFS) plans4 are designed to be as flexible as possible.
With PFFS coverage, beneficiaries are free to find their own providers, though the policy only pays hospitals and practitioners who accept the policy rates.
For care delivered by an approved provider, point-of-service costs are paid as with any other health insurance. For services performed by a non-plan practitioner, seniors may have to pay some or even all of the costs they incur.
Special needs plans (SNP)5 are Medicare Advantage programs that have been tailored to meet the needs of specific beneficiaries, such as people with chronic conditions who require specialized care or beneficiaries who qualify for both Medicare and Medicaid.
Flexibility is minimal for most SNPs, which frequently lock in specific providers to deliver care. Specialist care for seniors with diabetes, HIV, limitations caused by stroke or other disabilities can be very expensive for many seniors, but the tailored care a typical SNP pays for can make those costs lower than a more general care plan is likely to provide.
One exception to the SNP model is late-stage renal failure. By law, all Medicare beneficiaries with this condition are covered directly under Original Medicare Part A regardless of age.
Beneficiaries who are eligible for both Medicare and Medicaid are considered “dual eligible.” These beneficiaries may have the opportunity to enroll in a type of SNP called a D-SNP.
Part D is an optional Medicare prescription drug benefit.6 Part D plans offer Medicare prescription drug coverage, which helps seniors maintain their regular medication schedules and deal with the sudden cost of new prescriptions.
With few exceptions, Medicare Part D plans are provided via an approved network of insurance providers that are authorized to offer prescription drug benefits for Medicare beneficiaries.
Providers are allowed to build some flexibility into the coverage they offer, though all authorized providers must meet certain minimum standards for cost, care and coverage.
How much does Part D cost?
Prescription drug benefits provided under Part D are divided into tiers for pricing and tracking purposes. Which drugs are available, what they cost and how they are paid for changes depending on the tier the specific drug is assigned to.
These tiers are part of a Part D plan formulary, which is the list of drugs covered by the plan. Drug formularies can change from one Medicare Part D to the next.
Generally, the Part D tiers are:
- Tier 1: This is the lowest tier of covered prescriptions. Drugs in this category include most generic prescription medications, and they carry the lowest copayment among covered drugs.
- Tier 2: Preferred brand-name prescription drugs are classed as tier 2. The copayments for these drugs tend to be higher than for tier 1 generics, but prices are still intended to be easily manageable for most seniors.
- Tier 3: Tier 3 is for non-preferred brand name drugs that have less coverage than the two previous tiers. Drugs in this category incur significant out-of-pocket costs, and it is generally worthwhile to ask about a generic or preferred alternative.
- Specialty tier: Prescription drugs in the specialty tiers tend to be very expensive at the point of delivery. Some of the newest and most effective drugs are in this category, where copayments are highest. Many experimental drugs are classified as specialty tier by Medicare.
Many Part C Medicare Advantage plans include a prescription drug benefit as part of their regular coverage. It is very important that beneficiaries check whether their Part C plan has this coverage. Beneficiaries who are enrolled in Medicare Advantage plans that lack prescription coverage may be able to add a Part D plan to their health insurance package, as long as they sign up during specific Medicare enrollment periods.
Costs for Part D plans vary by location and by the plan carrier, but all are constrained by a maximum limit for the annual deductible. In 2020, this limit is $435 a year.7 Authorized Part D plans are allowed to charge less than this amount as a deductible, and some carry no deductible at all.
Prior to 2020, Medicare Part D plans had a gap in coverage known as the "donut hole," as a result of the non-overlapping levels of insurance they offered. The donut hole officially closed in 2020, but beneficiaries may still have to pay a somewhat higher copayment for certain drug costs when they reach that phase of drug coverage.
Part D coverage amounts fall into three main baskets: initial coverage, the donut hole and catastrophic coverage.
Part D initial coverage starts at the $0 mark and rises to $4,020 in total costs for prescriptions in a single year.8 In this window, your copayment and deductible varies according to the plan you have, but copays are generally low.
Above the initial coverage limit, beneficiaries must pay a fraction of the cost of drugs.
Once the initial coverage limit for a benefit period is reached, beneficiaries must pay their normal copayment amount for all filled prescriptions, plus an additional 25% of the base cost of generic and brand name drugs.
After that, Part D steps in to pay the remaining 75%. This continues until a catastrophic care threshold is reached for the benefit period.
Catastrophic coverage9 begins when a Part D beneficiary spends more than $6,350 out of pocket in a single benefit period.
Note that this is the amount a beneficiary personally pays, not the total cost of medications paid by all parties together. Above the catastrophic threshold, beneficiaries pay only a small copayment or coinsurance amount for all prescriptions thereafter.
Seniors who meet certain income and asset limitations (which are roughly in line with the standards for receiving SNAP and Medicaid benefits ) may qualify for prescription cost assistance through Medicare Extra Help.10
Extra Help, also known as the Part D Low-Income Subsidy (LIS), is a federally funded assistance program that kicks in at the initial coverage threshold to prevent a coverage gap. Beneficiaries enrolled in Extra Help pay no additional costs inside of the donut hole.
Medicare Supplement Insurance (Medigap)
Original Medicare beneficiaries may find themselves falling short on the expenses their coverage doesn't pay. Medicare has some gaps in coverage such as copays, coinsurance, deductibles and more.
Many Medicare beneficiaries choose to plug some of those gaps with a Medicare Supplement plan, also known as Medigap. Medigap policies help pay for many of the remaining costs Original Medicare leaves unpaid.
What types of Medicare Supplement plans are available?
There are 10 federally standardized Medicare Supplement plans available in most states. Wisconsin, Massachusetts and Minnesota standardize their plans differently. The 10 standardized plans have lettered plan names.
|Medicare Supplement Benefits||A||B||C1||D||F1||G||K||L||M||N|
|Part A coinsurance and hospital costs||✓||✓||✓||✓||✓||✓||✓||✓||✓||✓|
|Part B coinsurance or copayment||✓||✓||✓||✓||✓||✓||50%||75%||✓||✓|
|First 3 pints of blood||✓||✓||✓||✓||✓||✓||50%||75%||✓||✓|
|Part A hospice care co-insurance or co-payment||✓||✓||✓||✓||✓||✓||50%||75%||✓||✓|
|Co-insurance for skilled nursing facility||✓||✓||✓||✓||50%||75%||✓||✓|
|Medicare Part A deductible||✓||✓||✓||✓||✓||50%||75%||50%||✓|
|Medicare Part B deductible||✓||✓|
|Medicare Part B excess charges||✓||✓|
|Foreign travel emergency||80%||80%||80%||80%||80%||80%|
|1. Plans C and F are not available to new beneficiaries who became eligible for Medicare on or after January 1, 2020.
2. Plans F and G also offer a high deductible plan which has an annual deductible of $2,370 in 2021. Once the annual deductible is met, the plan pays 100% of covered services for the rest of the year. The high deductible Plan F is not available to new beneficiaries who became eligible for Medicare on or after January 1, 2020.
3. Plan K has an out-of-pocket yearly limit of $6,220 in 2021. Plan L has an out-of-pocket yearly limit of $3,110 in 2021.
4. Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to $50 for emergency room visits that don’t result in an inpatient admission.
View an image version of this table.
Medicare supplemental plans are offered by authorized private insurance companies. Each provider is licensed on a state level to offer designated Medigap11 policies.
Laws for what's included in a Medigap policy, what it costs and how the member pool is managed vary enough between states that it can difficult to generalize about them.
As a rule, applicants join a Medigap pool that is open only to eligible beneficiaries in their state, or their region of a large state. Plans are geared toward the providers available in the area, so costs and coverage limits vary.
What are guaranteed issue rights?
By law, no senior who is eligible for Medicare may be refused coverage by a Medigap policy because of a preexisting condition, as long as they apply for a plan during a period in which they have a guaranteed issue right.
Guaranteed issue rights may be granted for a number of situations such as:
- You lose your previous Medigap coverage through no fault of your own, such as the plan no longer being offered in your area
- You move to a new area where your current Medigap plan is no longer offered
The most common guaranteed issue right is when you apply for a Medigap plan during your Medigap Open Enrollment Period.
How do you enroll in aMedicare Supplement plan?
Your open enrollment period begins as soon as you are eligible for Medicare and lasts for six months. During this period, a Medicare Supplement Insurance company cannot deny you coverage or charge you more for a Medigap policy due to your health.
If you apply for a Medigap policy during a time when you don’t have guaranteed issue rights, the insurance company may require you to undergo medical underwriting. This means that the company could charge you more for your policy – or deny you coverage altogether – based on your health.
What happened to Plan F and Plan C in 2020?
Two Medigap plans, Plan F and Plan C, are no longer available to new Medicare beneficiaries who became eligible for Medicare after January 1, 2020.
Beneficiaries who were eligible for Medicare before that date can still apply for either plan if the plan is available where they live. Beneficiaries who were already enrolled in Plan F or Plan C can keep their plan.
Seniors who buy into a Medigap plan after this date must pay the Part B deductible out of pocket for outpatient services before Medigap coverage begins covering their Part B copay/coinsurance costs.
In addition, plan beneficiaries must pay a separate Medigap premium on top of the Part B premium they are already paying. Medigap premiums are not automatically withheld from Social Security payments like Medicare premiums can be.
Who is eligible for Medicare Supplement Insurance?
To qualify for a Medigap policy, you must be enrolled in both Original Medicare Parts A and B. You must not be enrolled in a Medicare Advantage plan (Part C), since it is illegal to sell you both a Part C plan and a Medigap plan unless you are switching from one to the other.
Unlike Medicare, a Medigap policy only covers one named person. If your spouse also needs coverage, they must apply for their own policy.
Fortunately, all standardized Medigap policies are guaranteed renewable, meaning that your policy coverage must be renewed as long as you continue paying your premiums, regardless of changes to your health or other factors. Bear in mind that this protection expires if your Medigap coverage is allowed to lapse.
Medigap plans sold prior to 2006 sometimes included a prescription drug benefit to help beneficiaries pay for their medication. Since then, no authorized Medigap plan has been allowed to offer this to new members.
Beneficiaries who need prescription assistance must enroll in a Part D plan.
Shopping for a Medigap plan can get complicated. Because of the diversity of companies and plan options, and the variation in laws from one state to another, many seniors can feel lost trying to navigate all of the different offerings on the market.
For help finding a Medigap policy that works for you, contact your state's Health Insurance Assistance Program,12 where knowledgeable workers can walk you through what's available in your area.
Who is Eligible for Medicare?
Medicare benefits are administered through the Social Security Administration, and they are made available as an entitlement to all beneficiaries who have met the program’s eligibility criteria.
To sign up for Original Medicare, applicants must be U.S. citizens or permanent legal residents aged 64 and over.13 If they are under 65, they may be eligible for Medicare if they have a qualifying disability or condition, such as Lou Gehrig’s Disease (ALS) or End-Stage Renal Disease (ESRD).
Though applications may be submitted up to 3 months prior to a beneficiary’s 65th birthday, benefits generally begin on the first day of the first month of eligibility.
All seniors who have reached the minimum age and who meet the other eligibility criteria are eligible for coverage, though they may be asked to pay a premium for Part A coverage. That premium is waived entirely for beneficiaries with sufficient work history.
Over 90% of Part A beneficiaries pay no monthly premium because they have worked for at least 10 years, or 40 quarters, and paid into the Social Security system with payroll withholding deductions.
Medicare beneficiaries may apply for Part D coverage up to 3 months before their Medicare eligibility begins to allow for the slower processing of this coverage and to prevent gaps in care.14
All beneficiaries who have enrolled in Original Medicare may apply for a Medigap policy during their Medigap Open Enrollment Period, though they may be charged a higher monthly premium if they apply outside of the their Medigap Open Enrollment Period.
Medicare beneficiaries are eligible for Medicare Part C, or Medicare Advantage, if they are already eligible for and enrolled in Original Medicare, as long as they don’t have End-Stage Renal Disease. If you have ESRD, you may be eligible for a Medicare Special Needs Plan.
How Do I Enroll in Medicare?
Part A and Part B
Some people are automatically eligible for Medicare and do not have to do anything to enroll in Original Medicare Part A and Part B. Most U.S. citizens who meet the program’s eligibility guidelines are automatically enrolled at age 65.
Beneficiaries who are automatically enrolled in Part A and Part B, their Medicare coverage will start will start at a time according to how they became eligible:
- On the first day of the month they turn 65
- After they’ve received qualified disability benefits from Social Security or the Railroad Retirement Board (RBB) for 24 months
- The month their disability benefits begin if they have Lou Gehrig’s disease (ALS)
Eligible individuals can also call Social Security at 1-800-772-1213 (TTY: 1-800-325-0778) or call the RRB at 1-877-772-5772 if they worked for a railroad.
You can only enroll in Medicare during specific enrollment periods, which you can learn more about below.
Part C and Part D
Original Medicare beneficiaries who choose to sign up for a Part C Medicare Advantage plan or a standalone Part D Prescription Drug Plan must first enroll in Part A and Part B following the steps listed above.
To sign up for Medicare Advantage or a standalone Medicare drug plan, find a local insurance carrier that is authorized to sell Part C plans in your state and sign up. You can also use the Medicare Plan Finder or call Medicare directly at 1-800-MEDICARE (1-800-633-4227).
Most Medicare Advantage plans include prescription drug coverage. If you choose to enroll in a Medicare Advantage plan with drug coverage, you do not also need to enroll in a separate Part D plan, because your Part D benefits are included in your Medicare Advantage plan.
Medicare Enrollment Periods
Medicare Parts A, B, C, and D offer a wide initial enrollment period16 for new beneficiaries, and it may be difficult to sign up for comprehensive coverage after the window closes.
Your Initial Enrollment Period (IEP)
A beneficiary’s seven-month Initial Enrollment Period (IEP) begins on the first day of the month, three months before the beneficiary's 65th birthday. It closes on the last day of the third month after their birth month.
For example, a senior who turns 65 and becomes eligible for Medicare on June 15 may enroll in a Part A and/or Part B (if they aren’t automatically enrolled) plan during their Initial Enrollment Period at any time from March 1 to September 30 of that year.
If they want to enroll in Part C and/or Part D, they could also do so during their Initial Enrollment Period.
Beneficiaries who enroll in a Part D plan outside of their IEP and who don’t have other creditable drug coverage may be required to pay a late enrollment penalty premium rate once they do enroll in Medicare drug coverage, which likely applies for as long as the coverage is maintained.
Fortunately, eligible seniors have the option to sign up or change their coverage details during additional enrollment periods.
Medicare Fall Open Enrollment Period for Medicare Advantage and Prescription Drug Plans
One of these enrollment periods is the annual open enrollment window that starts every year on October 15 and ends on December 7. This period is also called the Annual Election Period (AEP) or the Annual Enrollment Period.
During this period, beneficiaries with:
- Medicare Parts A and/or B can switch to a Part C plan
- Medicare Part C can switch back to Parts A and/or B
- Medicare Parts A or B can opt into, out of or switch a Part D prescription plan
- An existing Medicare Part C plan can switch to another Part C plan without penalty
Special Enrollment Periods (SEP)
In addition to the initial and annual enrollment periods, some beneficiaries qualify for penalty-free signups during special enrollment periods (SEPs). An SEP may start at any time, and it begins when you meet certain eligibility criteria.
You may qualify for an SEP enrollment if:
- You lose creditable coverage through no fault of your own, such as when an employer-paid insurance plan shuts down and leaves you without coverage
- You have been the victim of fraud and now lack insurance coverage
- Your spouse had insurance that covered you, but you have lost coverage due to closure, bankruptcy of the provider, retirement, unemployment or divorce
- You were overseas during your last open enrollment period and could not sign up for a plan
- You are recently released from a federal institution, such as a prison or inpatient hospital where you were incapacitated
Many Medicare beneficiaries operate on a fixed income and need help paying for the uncovered costs of Medicare. Fortunately, several resources exist to help beneficiaries with premium costs, deductibles and copayments.
One of these is Medicaid, which is the joint federal-state health insurance program for low-income citizens. If you have a medical need for health coverage and meet your state’s income and asset limits, you may be able to sign up for Medicaid as a supplement to your Medicare coverage at a local Human Services office.
Beneficiaries who qualify for Medicare and Medicaid generally do not also need a separate Medigap policy, as Medicaid mostly performs this role for beneficiaries. People with both Medicare and Medicaid are sometimes known as “dual-eligibles,” and you may be able to locate a Part C plan in your state that offers an SNP specifically for your insurance situation, called a D-SNP.
Medicare Savings Programs (MSPs)17 are another way to get help paying for Original Medicare’s monthly premiums. MSPs are state-administered saving plans that offer four different levels of assistance for seniors in need.
If you have income from working, you may still qualify for the following four programs even if your income level is higher than the listed income limits.
Qualified Medicare Beneficiary (QMB) Program
The QMB program helps pay for deductibles, copayments and monthly premiums (if any) on beneficiaries’ Original Medicare Parts A and B programs.
In 2020, applicants’ income is limited to $1,084 a month for single adults living in the lower 48 states, and $1,457 a month for couples. The asset limit is set at $7,860 for individuals and $11,800 for couples.
Income and asset limits are somewhat higher in Alaska and Hawaii.
Specified Low-Income Medicare Beneficiary (SLMB) Program
Seniors who only need help with Part B premiums may apply for the SLMB program.
Income and asset limits for this plan are higher than they are for QMB. For individuals in the lower 48 states, monthly income is capped at $1,276 and assets must not exceed $7,860. Married couples may earn up to $1,744 a month and have up to $11,800 in countable assets.
Qualifying Individual (QI) Program
Part A beneficiaries who need help paying for Part B, but who do not qualify for Medicaid coverage, may apply for the QI program.
This plan accepts individuals on a first-come, first-served basis, with priority given to previous years’ enrollees. You must enroll each year to continue your QI assistance.
Income limits are set at $1,456 for single adults, and $1,960 for married couples. QI has the same asset limitations as the other MSPs.
Qualified Disabled and Working Individuals (QDWI) Program
You might qualify for assistance with Part A premiums through the QDWI program if you are currently under age 65 and disabled but continue to work. You might also qualify if you have lost your premium-free Part A coverage by going back to work, or if you are not getting any medical assistance from your state.
The QDWI program only pays Part A premiums. Individuals applying for a QDWI MSP must earn less than $4,339 a month from all sources of income combined. Married couples are capped at $5,833 a month. Individual applicants must meet the asset limit of $4,000, or $6,000 for couples.
Again, these limits are somewhat higher in Alaska and Hawaii.
Medicare is complex and can be a real challenge for beneficiaries to understand. It is helpful to have professional advice and help locating Medicare benefits and signing up for coverage that meets your needs.
Here are several resources you can use to learn more about Medicare, or to get help signing up for the benefits you've become eligible for:
Medicare Plan Finder
The Medicare online Plan Finder tool18 requires registration and some personal information, but it can be a helpful tool for finding Original Medicare, Medicare Advantage and Part D plans in your area that can meet your needs.
This resource is provided by the Social Security Administration and offers impartial and unbiased information.
Medicare & You
Medicare & You19 is an extremely helpful and informative pamphlet printed by the Social Security Administration that contains a wealth of information about plan coverage and benefits. Information includes dates for open enrollment and current-year costs for premiums and deductibles.
You can order a paper copy of this brochure from the SSA website, or you can download a digital copy20 online.
Medicare Rights and Fraud Reporting
Medicare operates an online resource hub for learning about your rights as a Medicare beneficiary,21 and for reporting suspected cases of Medicare fraud22 in a confidential setting.
Submissions made to the fraud reporting system are kept private, and you cannot legally be identified or retaliated against for making a good-faith report.
Find Out What’s Covered
Medicare.gov offers beneficiaries access to a downloadable mobile app called What's Covered.23
Through this app, which is available for Apple, Windows and Google systems, Medicare beneficiaries can stay up to date on changing laws, policies and prices. App users can also use their mobile device to check on the spot whether a device, drug, service or other medical need is covered by their Medicare plan.