The idea of health insurance changes once you hit a certain age. Once you get to 65 years, you become eligible for the U.S. federal health insurance program called Medicare.
Understanding the basics
Medicare has four parts A, B, and D. Parts A and B make up the ‘Original Medicare’ plan which you can expect to cover close to 50% of your total health care expenses. Coverage starts with Part A or hospital insurance which is usually free for most people who have spent their working years paying into Medicare.
Part B incurs a monthly premium and covers additional services and supplies you might need to prevent or treat a number of medical conditions.
While A&B can handle medically necessary services and preventative services, you still have co-pays, deductibles, and coinsurance costs in addition to prescription expenses.
This is where Medicare Parts C and D come in and offer added coverage at a set price. Part C also known as the Medicare Advantage Plan or Medicare Health Plan is private insurance.
It includes Medicare Parts A and B, but can also include prescription drug coverage (Part D). Medicare Advantage plans can cover extra services like vision, dental, and hearing. Besides depending on your needs, it can cost much less than other options if you don’t need frequent care.
Who is eligible?
If you have entered and lived in the US legally for at least five years, and are over 65 you are eligible for Medicare. Though, it also applies to people of any age with permanent kidney failure or those with disabilities who might be under 65 as well.
What does it cost?
Most people become automatically entitled to free Part A Medicare due to payment of Medicare taxes across 40 or more quarters of Medicare-supported employment. But you can also opt-in for Part A by paying a premium. Medicare Part B and D premiums are means-tested so if your income exceeds these a certain limit you will need to pay a higher premium. Premiums for Part C vary. Based on a few fields that you will have to fill in, Medicare’s online tool to find out what the estimated premiums and benefits are for you.