- You can qualify for Medicare by turning 65 years old or if you have a disability or diagnosis of end stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS).
- Your costs for Medicare depend on your income, work history, and other factors.
- You can get help paying for Part B and Part D if you have a limited income; on the other hand, you’ll pay more if you have a higher income.
- Each service that Medicare covers has guidelines to follow to get coverage.
Your costs and eligibility for Medicare depend on several factors. You can qualify through your age or through a diagnosed condition or disability if you receive Social Security Disability Insurance (SSDI).
No matter how you qualify, your work history and income can play a role in your costs for Medicare.
Once you’re enrolled, you’ll have coverage for a wide range of services. However, each covered service has its own guidelines you’ll need to meet before Medicare will pay.
Medicare is a federally funded health insurance program for people ages 65 and over and those who have certain medical conditions or disabilities. Medicare helps cover the costs of staying healthy and treating any conditions you might have.
The rules for enrolling in Medicare are different depending on how you become eligible. You can become eligible in these ways:
- Age. You’ll become eligible for Medicare when you turn 65 years old. You can enroll starting 3 months before your birth month. Your enrollment period lasts until 3 months after your birth month. If you miss this window, you may need to pay a late enrollment penalty.
- Disability. You’ll be automatically enrolled in Medicare once you’ve received 24 months of SSDI at any age. You’ll need to have a disability that meets Social Security’s criteria. Generally, this means it must prevent you from working and be expected to last for at least another year.
- ESRD or ALS. You’ll also be automatically enrolled in Medicare if you have a diagnosis of ESRD or ALS at any age. If you qualify due to these conditions, there’s no 24-month waiting period.
What are the different parts of Medicare?
Medicare is divided into a few parts. Each part of Medicare covers different healthcare needs. Currently, the parts of Medicare include:
- Medicare Part A. Medicare Part A is hospital insurance. It covers you during short-term inpatient stays in hospitals and for services like hospice. It also provides limited coverage for skilled nursing facility care and select in-home healthcare services.
- Medicare Part B. Medicare Part B is medical insurance that covers everyday care needs like doctor’s appointments, preventive services, mental health services, medical equipment, and urgent care visits.
- Medicare Part C. Medicare Part C is also called Medicare Advantage. These plans combine the coverage of parts A and B into a single plan. Medicare Advantage plans are offered by private insurance companies and are overseen by Medicare.
- Medicare Part D. Medicare Part D is prescription drug coverage. Part D plans are stand-alone plans that cover only prescriptions. These plans are also provided through private insurance companies.
- Medigap. Medigap is also known as Medicare supplement insurance. Medigap plans help cover the out-of-pocket costs of Medicare, like deductibles, copayments, and coinsurance.
Your income, work history, and other factors can play a big role in your costs for Medicare.
Medicare is funded by taxpayer contributions to Social Security. When you work and pay into Social Security, you earn what is known as a Social Security work credit. Social Security work credits determine your eligibility for services like SSDI and premium-free Medicare Part A.
You earn up to 4 work credits for each year you work. You’ll qualify for premium-free Part A if you’ve earned at least 40 work credits during your lifetime. This means most people are eligible for premium-free Part A after 10 years of work.
You can check how many work credits you have and what programs you’re eligible for by creating an account on the Social Security website.
You’re still eligible for Medicare if you’ve earned fewer than 40 credits, but you’ll need to pay a monthly premium for Part A.
How are Part B costs determined?
An IRMAA is a surcharge that’s added to your monthly premium amount. Depending on your income level, your total premium amount can range from $202.40 to $491.60.
If you have a limited income, you might qualify to pay less for Part B. Medicare offers a few different programs that can help you pay the cost of your Part B premium.
Each program has different eligibility rules, but if you earn less than $1,426 per month as an individual, you might qualify for a reduced Part B premium or even premium-free Part B.
How are Part C costs determined?
Medicare Part C plans, also known as Medicare Advantage plans, are offered by private companies that contract with Medicare. These plans are required to cover all the same services as original Medicare (parts A and B), and many plans cover additional services as well.
The cost of your Medicare Advantage plan will depend on multiple factors including:
- where you live
- the company offering the plan
- how comprehensive the plan is
- the plan’s network
You can search for plans in your area to compare costs and coverage using Medicare’s plan comparison tool.
How are Part D costs determined?
Medicare Part D plans are also offered by private companies. Costs set by these companies are affected by the same factors as Medicare Advantage.
Paying for Part D works a lot like Part B. Most people will pay the standard amount they see when they go to purchase a plan.
However, just like with Part B, if you earn more than $87,000 as an individual, you’ll pay an IRMAA. Again, the IRMAA will add a set cost to whatever your monthly premium is.
For example, if you earn between $87,000 and $109,000 as an individual, you’ll pay an additional $12.20 each month.
You can also get help paying your Part D costs if you have limited income. Medicare’s Extra Help program can help you pay your Part D premium, copayments, and other costs.
Medicare covers a wide range of services. You’ll need to meet the guidelines of each service to get coverage. The sections below will go over some common services you might be wondering about.
Hospice is covered under Medicare Part A. You can get complete coverage for hospice services if you meet these conditions:
- Your doctor must certify that you have a life expectancy of 6 months or less.
- You need to sign a waiver agreeing to stop treatments seeking to cure your condition.
- You must agree to comfort-focused end-of-life care.
- You’ll sign a hospice agreement.
You won’t pay anything for hospice care if you meet these conditions. The only cost to you might be a $5 monthly charge for any prescriptions you’re still taking.
Skilled nursing facility guidelines
Medicare Part A covers limited skilled nursing facility stays. Just like with hospice care, you’ll need to meet a few conditions:
- You need to have received at least 3 days of inpatient hospital care in the last 30 days; this is called a qualifying hospital stay.
- Your stay in a skilled nursing facility must be ordered by a doctor who’s enrolled in Medicare.
- You must require “skilled service,” which is a healthcare service that only a professional, like a registered nurse or physical therapist, can provide.
Part A will pay for up to 100 days of skilled care in each benefit period.
On days 1 through 20, your stay will be completely covered with no copayment. On days 21 through 100, you’ll pay a coinsurance amount of $176 a day in 2020.
If you’ve used more than 100 days, you’ll pay the full cost.
Physical therapy guidelines
Medicare will pay for medically necessary physical therapy under Part B coverage.
The services need to be ordered by your doctor to treat a condition or prevent a condition from getting worse — for example, physical therapy to reduce pain or to help you regain mobility following a stroke.
Medicare doesn’t limit the number of physical therapy sessions you can have, as long as the therapy remains medically necessary.
You’ll pay a coinsurance cost of 20 percent of the Medicare-approved amount for each approved visit.
Your costs might differ if you’re using a Medicare Advantage plan. Check with your plan provider ahead of time so you know what costs to expect.
Inpatient rehab guidelines
You can get coverage for inpatient rehab through Part A. Your doctor will need to order your stay in an inpatient rehabilitation center and certify that your condition needs treatment.
If you haven’t paid your Part A deductible yet, you’ll need to meet it before coverage will begin.
You have 60 total lifetime reserve days. These are a set amount of days to use over your lifetime — they don’t renew each year. Every time you use some of them, you’ll have fewer extra days to use in the future.
Once you’ve used up all your lifetime reserve days, you’ll pay the full price of the costs for your services.
Home health aide guidelines
Medicare pays for home health aides only as part of qualified home health services. You’ll need to meet some guidelines to qualify:
- Your doctor must certify that you need skilled home health services. Just like a stay at a skilled nursing facility, skilled care includes the services of registered nurses, therapists, and other professionals.
- Your doctor must have a plan of care for you that includes how the home health aide will help you meet your health goals.
- Your doctor must certify that you’re homebound. Medicare considers you homebound if you have trouble leaving your home independently.
Medicare doesn’t pay for long-term home healthcare. It also won’t pay if you need only the custodial services of home health aides. However, home health aides are generally part of the services you receive as part of a home healthcare plan.
You won’t pay anything for home healthcare if you qualify. The only costs to you will be for any medical equipment needed for your home healthcare. You’ll be responsible for 20 percent of the Medicare-approved amount for any equipment.
If you still have questions…
For additional help understanding how you can qualify for Medicare benefits, you can use these resources:
- Call Medicare directly at 800-MEDICARE (TTY: 800-633-4227).
- Get help from trained, impartial counselors through your local State Health Insurance Assistance Program (SHIP).
- Look for programs that can help you pay Medicare costs through state Medicare savings programs.
- Find a Medigap policy to help you pay coinsurance and deductibles using Medicare’s policy finder tool.
- You can become eligible for Medicare through age or disability.
- Your costs for Medicare depend on your work history, income, and other factors.
- You’ll pay more for Part B and Part D if you earn over $87,000 as individual each year.
- Medicare pays for a wide range of services, but you’ll need to meet the guidelines for each service to get coverage.