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A Medicare complete guide can be hard to find. Medicare can be complicated, and we’ve compiled this guide to explain the different types of coverage that are available, how to get coverage, and what to do if you can’t afford coverage.
Medicare is a federal government program that provides health coverage to individuals over 65 years of age and those who have a severe disability. It doesn’t matter how high or low your income is. Everyone pays a tax on the money they make throughout their lives to cover the cost of this program.
Sometimes Medicare is confused with Medicaid, which is a separate government healthcare program for low income individuals and families. A breakdown of the differences between these two programs can be found here.
What types of Medicare Programs are available?
There are two main types of Medicare:
Original Medicare is made up of Medicare Part A (hospital insurance) and Medicare Part B (outpatient medical insurance). You will have Original Medicare unless you enroll in a Medicare Advantage plan.
Some people also choose to add Medicare Part D, which covers the cost of prescription drugs. Adding Medicare Part D comes at an additional cost. The cost varies depending on the plan you choose, your income, your location, and whether you are covered by another health insurance plan by an employer or union.
Original Medicare usually covers about 80% of a person’s medical coverage. You can purchase a supplementary plan through private insurers to help cover costs that Medicare doesn’t pay for. These plans are called Medigap plans. The cost of these plans varies depending on where you live, what insurance company you purchase the plan from, and the level of coverage you need. Individuals are responsible for the full cost of Medigap plan premiums.
Medicare Advantage, also called Medicare Part C, is a government program that bundles Medicare Part A (hospital insurance), Medicare Part B (outpatient medical insurance), and Medicare Part D (prescription drug insurance) into one plan. Medicare Advantage plans are administered through private companies that have been approved by the government.
Which is better: Original Medicare or Medicare Advantage?
When it comes to the two types of Medicare, the best plan is the one that meets your individual needs. Neither type of Medicare is inherently better than the other.
One of the upsides to Original Medicare is that it is accepted by any doctor or hospital that takes Medicare plans, all across the U.S. A downside is that your out-of-pocket costs may be higher than they would be with a Medicare Advantage plan.
Medicare Advantage plans often mean that your out-of-pocket costs may be lower, but you will be limited to visiting doctors and hospitals who are in-network with the private company administering the plan.
How much does Original Medicare cost?
The cost of Medicare varies from person to person, and depends on a number of factors. Most people do not have to pay for Medicare Part A because they paid Medicare taxes for many years. Most people still pay about $148.50 per month for Medicare Part B. If you’ve opted to add prescription drug coverage (Medicare Part D), you will pay an additional premium, which varies widely depending on which plan you choose and where you live.
How much does Medicare Advantage cost?
The cost of Medicare Advantage also varies depending on the level of medical care you require, the insurance company administering it, your geographic location, and other factors. Monthly premiums for Medicare Advantage plans can be as low as $25 – $45, and some do not have a monthly premium at all. Just keep in mind, this does not account for other out-of-pocket costs like deductibles and coinsurance.
What if I can’t afford Medicare?
There are four government programs that help pay Medicare premiums and out-of-pocket costs for low-income individuals.
In order to apply for these programs or ask questions about whether you qualify, you should call your State Medicare Program.
If you qualify for any of the programs listed below, it is likely that you also qualify for extra help paying for your prescription drugs. More information on help with prescription drug costs is available here.
Qualified Medicare Beneficiary Program (QMB Program)
This program helps pay for Medicare Part A premiums, Medicare Part B premiums, deductibles, coinsurance, and copayments. You may pay a small fee for prescription drugs.
To qualify, an individual’s monthly income must be $1,094 or lower ($1,472 for married couples). An individual must have no more than $7,970 in resources (i.e. money in a savings account, stocks, bonds). The limit rises to $11,960 for a married couple. If your income is higher due to income earned by working, you might still qualify for help. Please note that the way your income and resources are counted may be different from state to state. Hawaii and Alaska in particular have slightly higher income limits.
Specified Low-Income Medicare Beneficiary (SLMB) Program
The SLMB Program is a state program that helps pay Part B premiums. To qualify, an individual’s monthly income must be $1,308 or lower ($1,762 for married couples). An individual must have no more than $7,970 in resources (i.e. money in a savings account, stocks, bonds). The limit rises to $11,960 for a married couple. If your income is higher due to income earned by working, you might still qualify for help.
Qualifying Individual Program
The QI Program is another state program that helps pay Part B premiums. To qualify, an individual’s monthly income must be $1,469 or lower ($1,980 for a married couple). An individual must have no more than $7,970 in resources (i.e. money in a savings account, stocks, bonds). The limit rises to $11,960 for a married couple. If your income is higher due to income earned by working, you might still qualify for help.
Qualified Disabled and Working Individuals (QDWI) Program
QDWI is a federal program helps pay the Part A premium for:
- Working disabled individuals under the age of 65
- Those who lost Social Security disability benefits and premium-free Part A due to a return to work
- Those who do not receive medical assistance through their state
- Those who meet the income and resource limits set by their state.
To qualify, an individual’s monthly income must be $4,379 or lower ($5,892 for a married couple). An individual must have no more than $4,000 in resources (i.e. money in a savings account, stocks, bonds). The limit rises to $6,000 for a married couple.If your income is higher due to income earned by working, you might still qualify for help.
While this guide answers many common questions and concerns about Medicare, you may still have questions based on your individual circumstances. For additional information about Medicare, check out the U.S. government’s official Medicare Handbook Medicare & You 2021.