Medicare can be confusing. To understand your options and find coverage that’s appropriate for you, there are some basics that are helpful to know.
Medicare is a government health insurance program. To be eligible, you must: be 65+ years old; have collected Social Security Disability Insurance (SSDI) for more than 24 months; or have been diagnosed with end-stage renal disease (ESRD) or ALS.
Medicare coverage is broken down into 4 parts:
Part A and Part B are referred to as Original Medicare. For more details about the parts of Medicare coverage, read the Quick Guide to Medicare.
There are two Medicare payment systems when you receive health care.
These are health insurance terms that you should understand:
Then there are costs that you have to pay when you get medical care, often called “out-of-pocket” costs. The specific amount of those costs will depend on your Medicare plan.
A Medigap plan is a supplemental insurance plan for those who choose Original Medicare (Parts A and B) that will help pay for “out-of-pocket” costs such as deductibles, co-payments, and co-insurance amounts. Plans are labeled A through N, and each plan with the same letter must offer the same basic benefits. The premiums and deductibles vary with each plan. If you choose Original Medicare, there is a 20% co-insurance amount for Part B, so a Medigap plan can help pay for that expense. If you buy a Part C plan, you are not eligible to buy a Medigap plan. For details, read Triage Cancer's Quick Guide to Medigap.
There are a few key things to consider when picking a Medicare plan:
When comparing plans, it can be tempting to just choose the one with the lowest monthly premium. But, to figure out the total cost for the year, including your out-of-pocket expenses, you have to do some math:
(Plan’s monthly premium x 12 months) + Plan’s out-of-pocket maximum = Total annual cost
Jamie: Jamie is nearly 65 years old and is about to begin 1 year of IV chemotherapy treatments, which will cost $10,000 a month. Because the IV treatment will be provided in the doctor’s office, it will be covered under Medicare Part B. What would be her out-of-pocket costs?
For more information on how to pick your Medicare plans, including Part C, Part D, and Medigap plans, visit: Medicare.gov/plan-compare
There are different types of pharmacies that may be covered by your plan:
Last updated: 12/2023
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