What is Medicare and How Can It Benefit You?

If you grew up in the United States and had a job where you paid taxes, chances are you noticed something called a Medicare tax. This is a federally required tax that is automatically deducted by your employer, by law, but it benefits you because when you are eligible for Medicare, you are automatically qualified to receive this important insurance.

Although Medicare has gone through many changes and reforms since its initial implementation in 1965, it still has the same foundation behind it: it is meant to be a health insurance program for the elderly and those who qualify under certain other circumstances.

To understand more about this federal program and how it benefits you, here is a short explanation of how it works.

Medicare in a Nutshell

When you retire or are determined no longer physically able to work, Medicare steps in to become your health insurance. It’s not an automatic, magic program that takes effect when you turn 65. You do have to enroll, and there are monthly premiums. There are also penalties if you don’t follow the rules and enroll within a certain timeframe.

Here’s a breakdown of what to expect when you qualify for Medicare:

  • Once you turn 65, or if you have certain disabilities, you generally qualify for Medicare Part B, or medical coverage. Part A is hospital coverage and is a separate insurance, with its own costs and coverages, but similar qualifications.
  • You have a 7-month initial enrollment period the first time you qualify for Medicare, starting 3 months before you turn 65 and ending 3 months afterward. If you don’t enroll for Part B coverage during this time, you may be subject to a late enrollment penalty when you do enroll.
  • After your initial enrollment, there is an annual Medicare enrollment period, or Medicare Open Enrollment, beginning in October and ending in December on specified dates. During this time, you are free to choose a different plan without needing a Medicare Special Enrollment Period.
  • You can choose whether you prefer a separate Part A, B, and D plan, which includes prescription medication coverage as well, or an all-inclusive Medicare Advantage plan.
  • Medicare itself does not pay for dental, vision, or certain other procedures, but these may be covered under an Advantage plan.
  • It is possible to qualify for Medicare and Medicaid at the same time. This special circumstance is called “dual enrollment,” and millions of people are eligible for these benefits.
  • You can retire, receive your Medicare benefits, and still work, as long as you only make up to a certain income. (Retirement age is now considered to be 66.) Once you pass that income level, you may receive reduced benefits.

With all of the changes to Medicare, it is recommended, but not required, to speak to a qualified representative before you choose a plan so you know your options.

Medicare is Waiting for You

If you qualify for coverage, it’s there for you when you are ready. There are guidelines, stipulations, and rules that you’ll need to follow, so start preparing early! But it’s a federal health insurance that is set in place to help you, so take advantage of the many options available to you when it’s your time!