Medicare is a national health insurance for people 65 years of age and older, certain younger disabled people and people with kidney failure. Part A helps pay for care in a hospital, skilled nursing facility and for home health and hospice care. Part B helps pay doctor bills, outpatient hospital care and various other medical services not covered by Part A. A program of alternative medical care choices called Medicare Advantage is sometimes called Part C and the prescription drug benefit program is called Part D.
Federal employees in both the CSRS/CSRS Offset and FERS retirement systems pay 1.45 percent of salary and become eligible for benefits under the same rules as other working Americans.
You are eligible if you or your spouse worked for at least 10 years in Medicare-covered employment, you are 65 years old and a citizen or permanent resident of the United States. You might also qualify for coverage if you are a younger person with a disability or a chronic kidney disease. Here are the basic guidelines:
You can get Part A at age 65 without having to pay premiums if:
- you are already receiving retirement benefits from Social Security or the Railroad Retirement Board;
- you could receive Social Security or Railroad Retirement benefits but have not filed for them; or
- you or your spouse had Medicare-covered government employment.
If you are under 65, you can get Part A without having to pay premiums if:
- you have received Social Security or Railroad Retirement Board disability benefits for 24 months; or
- You are a kidney dialysis or kidney transplant patient.
While you do not have to pay a premium for Part A if you meet one of those conditions, you must pay for Part B if you want it. The standard Part B monthly premium is $174.70 (in 2024). There is a surcharge for high-income retirees which phases up by income level. The premium is deducted from Social Security or civil service retirement payments.
Part B also requires an annual deductible, $240 in 2024.
Note: Those who qualified for Medicare only due to a kidney transplant and who would lose full Medicare eligibility 36 months after the transplant can elect to continue Part B coverage of immunosuppressive drugs by paying a monthly premium. That is $103 in 2024 for most but higher for higher-income enrollees.
If you have questions about your eligibility for Medicare Part A or Part B or if you want to apply for Medicare, call the Social Security Administration at (800) 772-1213, or go online at www.medicare.gov. You can also get information about buying Part A, as well as Part B, if you do not qualify for premium-free Part A.
If you are already getting Social Security or Railroad Retirement benefits when you turn 65, you do not have to apply. You are enrolled automatically in both Part A and Part B and your Medicare card is mailed to you about three months before your 65th birthday. If you do not want Part B, follow the instructions that come with the card.
If you are disabled, you will automatically get a Medicare card in the mail after you have received Social Security or Railroad Retirement Board disability benefits for 24 months.
If you are not receiving Social Security or Railroad Retirement benefits three months before you turn 65, you need to apply for Medicare. You apply by contacting any Social Security Administration office or, if you or your spouse worked for the railroad, the Railroad Retirement Board. Apply three months before you turn 65.
That’s the beginning of your seven-month initial enrollment period. By applying early you’ll avoid a possible delay in the start of your Part B coverage. If you do not enroll during this seven-month period, you’ll have to wait to enroll during the next general enrollment period. General enrollment periods are held January 1 to March 31 of each year and Part B coverage starts the following July.
Don’t put off enrolling. If you wait 12 or more months to sign up, your premiums generally will be higher.
Part B premiums go up 10 percent for each 12 months that you could have been enrolled but were not. The increase in the Part A premiums (if you have to pay a premium) is 10 percent no matter how late you enroll for coverage.
Under certain circumstances, however, you can delay your Part B enrollment without having to pay higher premiums. If you are age 65 or over and have group health insurance based on your own or your spouse’s current employment, or if you are disabled and have group health insurance based on your current employment or the current employment of any family member you have a choice:
- you may enroll at any time while you are covered by the group health plan; or
- you can enroll during a special eight-month enrollment period that begins the month employment ends or the month you are no longer covered under the employer’s plan, whichever comes first.
If you do not enroll by the end of the eight-month period, you’ll have to wait until the next general enrollment period, which begins January 1 of the next year.
Even if you continue to work after you turn 65, you should at least sign up for Part A of Medicare. Part A may help pay some costs not covered by your employer’s plan. It may not, however, be advisable to sign up for Part B at the same time. You would have to pay the monthly Part B premium and the Part B benefits would be of limited value as long as the employer plan was the primary payer of your medical bills. Moreover, you would trigger your six-month Medigap open enrollment period.
Medicare Treatment Options
One important decision you may have to make is how you will receive your Medicare hospital and medical benefits. In addition to the Original Medicare fee-for-service structure, Medicare-eligible persons may choose from a broader mix of health plans under Medicare Advantage (also called Medicare Part C), including preferred provider organizations, provider sponsored organizations, private fee-for-service plans and medical savings accounts.
The Original Medicare Plan
This health care plan is also known as “fee-for-service.” It is offered by the federal government and is available nationwide. You are usually charged a fee for each health care service or supply you get. To help cover the costs the original plan does not cover, you may buy a Medigap policy (supplemental insurance). A Medigap policy fills gaps in the original Medicare plan coverage; for federal retirees, FEHB essentially fulfills this role.
Medicare Advantage Plans
Available in many areas, Medicare Advantage Plans include:
- Medicare Managed Care Plans: In most managed care plans, you can only go to doctors, specialists, or hospitals on the plan’s list except in an emergency. Plans must cover all Medicare Part A and Part B health care. Some managed care plans cover extra benefits, like extra days in the hospital. Your costs may be lower than in the Original Medicare Plan.
- Medicare Preferred Provider Organization Plans (PPO): A type of plan in which you use doctors, hospitals, and providers that belong to the network. You can use doctors, hospitals, and providers outside of the network for an additional cost.
- Medicare Private Fee-for-Service Plans: A type plan in which you may go to any Medicare-approved doctor or hospital that accepts the plan’s payment. The insurance plan, rather than the Medicare program, decides how much it will pay and what you pay for the services you get. You may pay more or less for covered benefits. You may have extra benefits the Original Medicare Plan doesn’t cover.
- Medicare Specialty Plans: A type of plan that provides more focused health care for some people. These plans give you all your Medicare health care as well as more focused care to manage a disease or condition such as congestive heart failure, diabetes, or End-Stage Renal Disease.
If you decide to join a Medicare Advantage Plan, then you will use the health care card that you get from your Medicare Advantage Plan (provider) for your health care. These plans often give you more choices and, sometimes, extra benefits, like extra days in the hospital.
If you’re in a Medicare Advantage Plan, you don’t need a Medigap policy because Medicare Advantage Plans generally cover many of the same benefits that a Medigap policy would cover, like extra days in the hospital after you used the number of days that Medicare pays for.
No matter how you get your Medicare benefits, you are still in the Medicare program. In every Medicare health plan you pay the monthly Medicare Part B premium and you get all the Medicare Part A and Part B covered services.
To help Medicare beneficiaries decide from this array of choices, the government has posted plan-by-plan comparisons at www.medicare.gov.
Medicare Part A Benefits
When all program requirements are met, Medicare Part A helps pay for:
- care in a hospital;
- care in a skilled nursing facility following a hospital stay;
- home health care;
- hospice care; and
- blood, after the first three pints.
Coverage for care in hospitals and skilled nursing facilities is measured in “benefit periods.” In each benefit period you are limited as to the number of days Medicare will help pay for inpatient hospital and skilled nursing facility care. Exceed the limit and you are responsible for all charges for each additional day of care.
A benefit period begins the day you are admitted to a hospital. It ends when you have been out of a hospital or skilled nursing facility for 60 straight days. It also ends if you are in a skilled nursing facility but have not received skilled care there for 60 straight days.
The next time you are admitted to a hospital, a new benefit period begins and your hospital and skilled nursing facility benefits are renewed. There is no limit to the number of benefit periods you can have.
If you need inpatient hospital care, Medicare Part A helps pay for up to 90 days of medically necessary care in a Medicare-certified hospital in a benefit period.
During the first 60 days Medicare pays all covered costs except for the hospital deductible of $1,556. You only pay the deductible once during a benefit period no matter how many times you go to the hospital.
For the 61st through the 90th day in a benefit period, Medicare pays all covered costs except for coinsurance ($389 per day). Beyond the 90th day the coinsurance amount is $778 per day. You are responsible for paying the coinsurance.
Medicare Part B Benefits
Medicare Part B picks up where Part A leaves off. It pays for a wide range of medical services and supplies, but perhaps most important, it helps pay doctor bills. The medically necessary services of a doctor are covered no matter where you receive them — at home, in the doctor’s office, in a clinic, in a nursing home or in a hospital.
Part B also helps pay for: outpatient hospital services, X-rays and laboratory tests, ambulance transportation, breast prostheses following a mastectomy, services of certain specially qualified practitioners who are not doctors, physical and occupational therapy, speech language pathology services, home health care, if you do not have Part A of Medicare, blood, after the first three pints, flu, pneumonia and hepatitis B shots, pap smears for the detection of cervical cancer; mammograms to screen for breast cancer, outpatient mental health services, artificial limbs and eyes, arm, leg, back and neck braces, durable medical equipment, including wheelchairs, walkers, hospital beds and oxygen equipment prescribed by a doctor for home use, kidney dialysis and kidney transplants. (Under limited circumstances, heart and liver transplants in a Medicare-approved facility, medical supplies and items such as colostomy bags, surgical dressings, and splints and casts.)
When you use your Part B benefits, you are responsible for paying Part B annual deductible ($233 in 2022) plus monthly premiums, as described in Medicare Eligibility, above.
After the deductible is met, Medicare pays 80 percent of the Medicare approved amount for most services. You are responsible for the remaining 20 percent. This is called coinsurance. Sometimes your share of the bill is more than 20 percent of the approved amount. If you receive outpatient services at a hospital, you are responsible for paying 20 percent of whatever the hospital charges, not 20 percent of an approved amount. If you receive outpatient mental health services, your share is 50 percent of the Medicare approved amount.
Besides having to pay deductibles and coinsurance, you are responsible for all charges for services and supplies you receive that are not covered by Medicare.