New to Medicare? Learn How the Seniors Health Care Plan Works

Medicare may sound like a mess of letters to most seniors about to join the nation's largest health care plan, but all those letters are important if you want the best and most affordable senior care.

Congress created the Medicare program in 1965 to provide health insurance to people age 65 and older, regardless of income or past medical history. The program has expanded several times since then, which isn't surprising considering the advancements in science and medicine, and the increase in life expectancy for Americans.

Although the idea of radically changing Medicare is often talked about in political circles, it probably isn't going anywhere.

"I think that Medicare will be an increasingly large component of how health care benefits are delivered in the future," says Robert Hartwig, past president of the Insurance Information Institute. "I think it’s an indispensable and irrevocable part of the contract America has with its citizens."

Enrollment is open to seniors starting three months before their 65th birthday and ends four months after their birthday. That should be ample time to figure out the basics, but, just in case, we'll break down the components for you.

Part A of Medicare

Consider this your "hospital insurance" because that's what it covers -- hospital or skilled nursing facility stays. It can also cover hospice care.

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Part A won't cover stays at a nursing home if all that is required is custodial care, such as assistance bathing, eating or using the bathroom.

Part A is free for most people who have paid Medicare taxes for at least a decade. Premiums vary between $200 and $400 a month for those who haven't paid enough into the system.

Part B of Medicare

Medicare Part B covers doctor visits, surgical procedures and lab tests. This part even takes care of medical devices prescribed by your physician, such as a wheelchair.

Every senior on Medicare pays a premium for Part B. You can find out how much you'll need to pay by visiting the Medicare website, but you can expect it to be around $100 a month.

It's also important to remember what's not covered in Parts A and B, such as eye exams, hearing aids and trips to the dentist. Those are almost always are excluded.


Part C of Medicare

Private health insurance companies take center stage for Medicare Part C, which also goes by the name Medicare Advantage Plans.

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By design, Part C plans must cover what traditional Medicare covers. You may, however, tack on more coverage for an additional cost to your premiums. It pays to shop around for these programs because the costs can vary greatly.

"As Medicare consumers shop for what's right for them, that causes benefits, quality and premiums to continue to improve," says the Centers for Medicare and Medicaid Services Acting Administrator Andy Slavitt. "Value in Medicare plans and Prescription Drug plans is better than ever."

Part D of Medicare

Medicare Part D will pay for prescription drugs. That includes the medications you take at home, as well as what you may take at a hospital.

This, too, will cost all seniors a premium, but it should be less than $40 a month.

Now that you're armed with some basic information, it's time to enroll. The normal open enrollment period runs Oct. 15 to Dec. 7.