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Medicare: what does it cover and who is eligible?

Created in 1965, Medicare is a government program that provides health insurance coverage to millions of Americans. The program is open to those older than age 65 as well as younger individuals who have certain disabilities. Those with End-Stage Renal Disease are also eligible for Medicare coverage.

Who is eligible for Medicare?

To be eligible for Medicare, senior citizens must meet the following criteria:

  1. Have worked in Medicare-covered employment for at least 10 years or have a spouse who meets this requirement
  2. Be a permanent resident or citizen of the United States
  3. Be age 65 or older

Individuals with disabilities generally must first apply for Social Security Disability Insurance benefits. Once an individual is approved for disability benefits, there is a 24-month waiting period before Medicare coverage begins. However, this waiting period is waived for those who have ALS, also known as Lou Gehrig's disease. Individuals receiving disability benefits from the Railroad Retirement Board may also be eligible for Medicare.

Individuals who have End-Stage Renal Disease are also eligible for Medicare coverage. In most cases, Medicare benefits for these individuals begin four months after a patient starts dialysis treatment. Individuals who receive a kidney transplant can begin receiving benefits the month of the transplant. Eligibility generally ends 12 months after the last dialysis treatment or 36 months after a kidney transplant.

Understanding Medicare's many parts

Although often referred to as a single entity, Medicare actually contains four parts. Medicare beneficiaries can enroll in one or more of the parts depending on their needs.

Part A: As a part of the original Medicare program, Part A coverage provides hospital insurance that pays for inpatient care as well as home health care, skilled nursing care and hospice care. Most Medicare beneficiaries do not pay premiums for this insurance since that cost is covered by the Medicare taxes they paid while working.

Part B: The second part of original Medicare is Medicare Part B. This coverage provides medical insurance for doctor's visits, outpatient care, durable medical equipment and home health care. Some preventive services are also covered under Part B. While rates can vary, the standard premium for Medicare Part B in 2012 is $99.90.

Part C: Medicare Part C is also known as Medicare Advantage. While original Medicare provides benefits directly from the government, Medicare Part C plans are offered by private health insurance companies. They must include all the benefits included in Medicare Part A and Part B and may have additional coverage for prescription drugs, vision, dental or other services. Premium payments for Medicare Part C are set by the health insurance company offering the plan and can vary significantly depending on the type of additional coverage provided.

Part D: The most recent addition to Medicare is Part D, which provides prescription drug coverage. Like Medicare Part C, Part D plans are offered by private health insurance companies that set premiums within the guidelines issued by the government. Individuals with original Medicare or those with Medicare Part C plans that do not cover prescription drugs are eligible to buy Part D plans.

Individuals who choose to enroll in the original Medicare program may also add supplemental insurance, or Medigap. Individuals in the Medicare Advantage Plan -- Part C -- are not eligible for Medigap, but according to the federal government, they should not need the additional coverage.

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