Medicare has the following parts:
• Part A helps pay for inpatient hospital stays but also helps cover skilled nursing
care, home health care, and hospice care.
• Part B helps cover medically necessary services like doctors visits and outpatient care. Part B also covers some preventive services including screening tests and shots, diagnostic tests, some therapies,
and durable medical equipment like wheelchairs and walkers.
• Part C is another way to get your Medicare Benefits. It combines Parts A and B, and
sometimes Part D (prescription drug coverage). Medicare Advantage Plans are managed
by private insurance companies approved by Medicare. These plans must cover medically
necessary services. However, plans can charge different copayments, coinsurance, or
deductibles for these services.
• Part D Medicare drug coverage helps pay for outpatient prescription drugs.
Most people don’t have to pay a monthly payment (premium) for Medicare Part A because they or their spouse paid Medicare or FICA taxes while they were working. (FICA stands for “Federal Insurance Contributions Act.” This is the tax withheld from your salary, or that you pay from your selfemployment income, that funds the Social Security and Medicare programs.) When
people pay these taxes on their earnings, it is called “Medicare-covered employment.”
If a person and his or her spouse did not pay Medicare taxes while they were working, or
did not work long enough (10 years in most cases) to qualify for premium-free Part A, he
or she may still be able to get Medicare Part A by paying a monthly premium. In 2009, the
Part A premium is $244 (for a person who has worked 30-39 quarters) or $443 (for a person
who has worked less than 30 quarters) in Medicare-covered employment.
For information on Part A entitlement, enrollment, or premiums, call the Social Security
Administration at 1-800-772-1213 or 1-800-325-0778 for TTY users.
People can choose whether or not to enroll in Part B (Medical Insurance). Those who enroll are responsible for a monthly premium for Medicare Part B, which is $96.40 in 2009.
Since January 1, 2007, some people with higher annual incomes pay a higher Part B premium. In 2009, people with annual incomes over $85,000 if you file an individual tax return or over $170,000 if you are married filing jointly, pay these higher premiums. These amounts change each year. Most people
still pay the standard Part B premium.)
People can sign up for Part B any time during a 7-month period that begins 3 months
before the month they become eligible for Medicare. This is called the Initial Enrollment
Period (IEP).
People who don’t take Part B when they are first eligible may have to wait to sign up
during a General Enrollment Period (GEP). This period runs from January 1 through March
31 of each year, with coverage effective July 1 of that year.
Most people who don’t take Part B when they are first eligible will also have to pay a
premium penalty of 10% for each full 12-month period they could have had Part B but
didn’t sign up for it, except in special situations. In most cases, they will have to pay this
penalty for as long as they have Part B
Most people covered by a group health plan based on current employment (their own or their spouse’s) can delay enrolling in Part B without a penalty.
These people get a Special Enrollment Period. They can enroll in Part B anytime they are still covered by the employer or union group health plan based on current employment, or during the 8 months following the month the employment ends or the group health plan coverage ends, whichever is first.
Most people who sign up for Part B during a Special Enrollment Period don’t pay higher premiums
Let’s look at an example.
Marie turned 65 on June 25, 2009, and plans to retire on December 31, 2009. She has group health plan coverage from her employer.
Her Initial Enrollment Period began March 1, 3 months before the month of her birthday,
and ends 3 months after her birthday month, at the end of September.
Her Special Enrollment Period begins the following month and continues for the 8 months
after she loses her coverage based on current employment.
The General Enrollment Period, for all people with Medicare, runs from January 1 through
March 31 of every year.