Anyone age 65 or over is eligible for Medicare. Most people age 65 and over are covered under Medicare Part A for free, based on their work records or on their spouse's work records.
People over 65 who are not eligible for free Medicare Part A coverage can enroll in it and pay a monthly fee for the same coverage. The premium base rate depends on the number of work credits you've earned. If you pay for Part A hospital insurance, you must also enroll in Part B medical insurance, for which you pay an additional monthly premium.
Read more about Medicare Part A.
All rules about how much Medicare Part A pays depend on how many days of inpatient care you have during what is called a "benefit period," or spell of illness. The benefit period begins the day you enter the hospital or skilled nursing facility as an inpatient and continues until you have been out for 60 consecutive days. If you are in and out of the hospital or nursing facility several times but have not stayed out completely for 60 consecutive days, all of your inpatient bills for that time will be figured as part of the same benefit period.
Medicare Part A pays only certain amounts of a hospital bill for any one benefit period—and the rules are slightly different depending on whether the care facility is a hospital, psychiatric hospital, or skilled nursing facility, or whether care is received at home or through a hospice.
All people covered by Medicare Part A must pay an initial amount before Medicare will pay anything. This is called the hospital insurance deductible. The deductible is increased every January 1.
You can get all the details in our article on Part A medical coverage.
For gaps in what Medicare Part A covers, including deductibles and co-insurance amounts, see Nolo's article Medigap: Covering the Gaps in Medicare.
For 2018 Part A premiums and deductibles, see Nolo's 2018 Medicare cost update.
The rules of eligibility for Part B medical insurance are simpler than for Part A: If you are age 65 or over and are either a U.S. citizen or a permanent resident who has been here lawfully for five consecutive years, you are eligible to enroll in Medicare Part B medical insurance. This is true whether or not you are eligible for Part A hospital insurance.
Read more about Medicare Part B.
Part B medical insurance is intended to cover basic medical services provided by doctors, clinics, and laboratories. However, the lists of services specifically covered and not covered are long, and do not always make a lot of sense.
Making the effort to learn what is and is not covered can be important, because you may get the most benefits by fitting your medical treatments into the covered categories whenever possible.
Part B insurance pays for:
When all of your medical bills are added up, you will see that Medicare pays, on average, only about half the total. There are three major reasons why it pays so little.
First, Medicare does not cover a number of major medical expenses, such as glasses, hearing aids, dental work, dentures, and a number of other costly medical services.
Second, Medicare pays only a portion of what it decides is the proper amount—called the approved charges—for medical services. When Medicare decides that a particular service is covered, it determines the approved charges for it. Part B medical insurance then usually pays only 80% of those approved charges; you are responsible for the remaining 20%.
Third, the approved amount may seem reasonable to Medicare, but it is often considerably less than what doctors actually charge. If your doctor or other medical provider does not accept assignment of the Medicare charges, you are personally responsible for the difference, up to a certain maximum.
Note that there are now several types of treatments and medical providers for which Medicare Part B pays 100% of the approved charges rather than the usual 80%. These categories of care include home health care, clinical laboratory services, and flu and pneumonia vaccines.
For details, see our article on what Medicare Part B will pay.
Anyone entitled to Medicare Part A (whether actually enrolled or not) or who is currently enrolled in Medicare Part B may join Medicare Part D to get help paying prescription drug costs. Enrollment is voluntary except for people who also receive benefits from Medicaid (Medi-Cal in California). If you qualify for Medicaid, the government automatically enrolls you in a Medicare Part D plan through which you will receive your prescription drug coverage. For more information about Part D, see Medicare Part D Prescription Drug Coverage: The Basics. For help choosing a Part D plan, see Medicare Part D: Choosing a Prescription Drug Plan.
There are four types of costs associated with Medicare Part D prescription drug coverage: premiums, deductibles, copayments, and a coverage gap during which period you must pay the full cost of your medications. People with low incomes may apply for a subsidy from the Social Security Administration to reduce these costs.
Part D premiums range from $10-$100 per month (depending on the plans available in your area and on the particular plan you choose). The maximum deductible—the amount you must pay out-of-pocket before Medicare will contribute to your prescription costs—in 2018 is $405. After you meet the deductible, Medicare will pay roughly 75% of your prescription costs.
After you and your plan together pay a certain amount for covered prescription drugs ($3,750 in 2018), your plan stops paying and you must pay the full cost of the prescription. The plan begins to pay again—and pays 95% of all further costs—when total expenditures reach a "catastrophic" level ($5,000 in 2018).
However, you will receive a discount on the cost of your medications while you are in the coverage gap.
For more information, see our article on Medicare Part D basics.
Low-income Medicare beneficiaries may qualify for a subsidy to help pay costs associated with Part D plans. This subsidy is called Extra Help. Also, under certain circumstances, the copayment for prescriptions may be waived or reduced.
You may qualify for a low-income Part D subsidy if:
In addition to low-income subsidies, circumstances exist in which a Part D plan enrollee may not have to pay the normal copayment for a covered drug. These include:
Find out more in Nolo's article on Extra Help for Part D.
Medicare is a federal government program that helps older folks and some disabled people pay their medical bills and prescription drug costs. The program is divided into four parts: Part A, Part B, Part C, and Part D.
People who are turning age 65 have an initial enrollment period that lasts until three months after their 65th birthday. If you don't sign up during that period, you'll have to wait for a general enrollment period or a special enrollment period (if you delayed signing up because you had an employer group health plan). Coverage start dates depend on what type of period you signed up in. Find out more in Nolo's article on Medicare enrollment periods and coverage start dates.