How does Medicare work?
Watch this introduction to Medicare, and you’ll get the big picture as well as important details.
We understand that there’s a lot to learn about Medicare. We can help you understand the basics and feel confident in the choices you make.
Original Medicare: Parts A and B
Medicare Parts A and B are referred to as Original Medicare, the federal programs that most people mean when they say “Medicare."
Medicare Part A covers:
- Inpatient care in
- Skilled nursing facilities
- Hospice care
- Home healthcare
Most people don’t need to pay a Part A monthly premium because they contributed into Social Security.
Medicare Part B covers:
- Doctors’ services
- Other outpatient care
You pay a monthly premium for Part B based on income. The purchase of Part B is optional, but you may face a late enrollment penalty if you do not sign up when you are first eligible for Medicare.
It’s important to know what Medicare Parts A and B do not cover:
Custodial care (help with bathing, dressing, eating, and using the bathroom) unless it is part of skilled nursing or hospice care
- Long-term care
- Orthopedic shoes
- Most prescription drugs
- Syringes or insulin, except insulin used with an insulin pump
- Care you receive while traveling outside the United States
Medicare Advantage: Part C
Medicare Part C, also known as Medicare Advantage, allows you to obtain Medicare coverage through a private insurer. For example, BCBSRI offers BlueCHiP for Medicare plans. Medicare Advantage plans may:
- Simplify your coverage, with only one benefit plan and one membership card
- Offer more benefits than Original Medicare covers
- Have different cost-sharing (for example, copays and coinsurance) than Original Medicare
- Offer out-of-pocket cost limits on some services
- Provide Part D prescription drug coverage (see below)
- Use provider networks, which means that you will generally have lower costs if you use doctors and hospitals within the plan’s network
- Charge a monthly premium in addition to the Part B premium
Prescription Drug Coverage: Part D
Medicare Part D is optional coverage offered by private insurers for prescription drugs not covered under Medicare Parts A or B. The purchase of Part D is optional, but you may face a late enrollment penalty if you do not sign up when you are first eligible for Medicare. There are two ways to get Part D coverage:
- As a stand-alone Medicare prescription drug plan
- As part of a Medicare Advantage plan
Medicare Supplement Plans (Medigap)
Medicare Supplement plans offer coverage that fills the gaps in Original Medicare (Parts A and B). These Medigap plans are offered through private insurers. BCBSRI offers Plan 65 plans. Depending on the policy, Medigap plans cover part or all of the deductibles, copays, and coinsurance under Original Medicare. They offer the flexibility of being able to go to any Medicare participating provider. With Medigap plans, you:
- Must have Original Medicare (Parts A and B)
- Must continue to pay the Part B monthly premium
- Cannot be enrolled in a Medicare Advantage plan
- Can enroll in a Medicare Part D prescription drug plan separately
You're not alone. Everybody learning about Medicare has similar questions.
Is Original Medicare free?
There is no cost for Medicare Part A, which is hospital coverage, if you contributed to Social Security for at least 40 quarters. If you haven’t, you can purchase Medicare Part A. You do have to pay a premium for Medicare Part B, which is medical coverage. Your premium cost depends on your income.
Do I have to enroll?
It depends on your situation.
Generally, when you turn 65, as long as you are receiving health insurance that includes credible drug coverage through you or your spouse’s employer, you do not have to enroll in Medicare Parts A and B until you stop working or lose credible drug coverage. You then have a certain amount of time, a special enrollment period, when you can enroll. But it’s important to check with your employer. They may require you to sign up for Medicare even if you are still employed.
If you are not working when you turn 65, or when you retire at any age and lose your health insurance through your employer, you need to enroll, especially in Part B. If you don’t sign up for Part B when you are first eligible, you could face a penalty.
When can I enroll?
Start thinking about Medicare before you are eligible. You will want to give yourself time to understand your options, ask questions, and feel confident about your choices before the deadline.
12 months before you turn 65...
- Now is the time to start looking into your Medicare plan options.
- Contact Social Security to find out about eligibility and enrollment.
6 months before…
- Contact Medicare for more information, including specific benefits and costs. (Or call BCBSRI. We’re happy to help.)
- Talk with family, friends, and doctors about your options, but remember that their situations may not be the same as yours.
- Talk with your employer about available group coverage.
- Attend an educational seminar. BCBSRI offers Medicare 101 sessions.
- Start comparing plans and narrow your choices.
- Check the various plans to see if the networks include your doctors and pharmacy.
- Make sure plans will cover you if you travel frequently or spend significant time outside Rhode Island.
- Compare out-of-pocket costs between plans.
3 months before…
Congratulations! Now you can apply for Medicare benefits through the Social Security Administration.
- You can also apply for additional coverage now. Learn about the options and easy enrollment through BCBSRI.
- Let your employer know about your decisions to ensure a smooth transition from group coverage to Medicare/retiree coverage.
- If your spouse or dependents were covered under your employer’s plan, make arrangements for them to have coverage after you have Medicare.
Happy birthday! Now that you have enrolled, it’s time to make sure everything is in place:
- Check that you have your Red, White and Blue Medicare card.
- Make sure you have your BCBSRI member ID card and cards for any additional coverage you enrolled in.
- Tell your doctors and pharmacy about your new coverage.