Medicare
Medicare is the federal health insurance program for people aged 65 and older, along with certain younger people with long-term disabilities or end-stage renal disease. It is organized into four parts covering hospital care, medical services, private plan alternatives, and prescription drugs.
Medicare is administered by the federal government and funded primarily through payroll taxes, premiums, and general revenue. Enrollment is available at age 65 to citizens and qualifying long-term residents; having enough quarters of covered employment — the person's own or a spouse's — is what makes Part A premium-free rather than what creates eligibility, and someone short of those quarters may still enroll by paying a Part A premium. Coverage also extends to people under 65 who have received Social Security disability benefits for a qualifying period, and to people with end-stage renal disease or amyotrophic lateral sclerosis regardless of age.
The program has four parts. Part A covers inpatient hospital stays, skilled nursing facility care following a qualifying hospital stay, hospice, and some home health care; most beneficiaries pay no premium for it because they paid into the system while working. Part B covers physician services, outpatient care, diagnostic tests, and durable medical equipment, and requires a monthly premium. Part C, called Medicare Advantage, lets a beneficiary receive Part A and Part B benefits — usually with drug coverage included — through a private plan approved by Medicare. Part D provides outpatient prescription drug coverage through private insurers.
Original Medicare leaves gaps: deductibles, coinsurance, and services it does not cover at all. Long-term custodial care is the most significant exclusion, and routine dental, vision, and hearing care are generally not covered either. Medicare supplement policies, known as Medigap, are standardized private plans sold to fill the cost-sharing gaps in Parts A and B. Medicaid is a separate program, jointly funded by federal and state governments and based on financial need rather than age; some people qualify for both.
Medicare is heavily tested on life and health insurance licensing exams, where candidates must distinguish the four parts, identify eligibility triggers, and separate Medicare from Medigap and Medicaid. It also appears on the CCMA exam from the billing side, since correctly identifying a patient's government coverage drives how a claim is coded and submitted.
Key takeaways
- Medicare covers people 65 and older, plus younger people with qualifying long-term disabilities, ESRD, or ALS.
- Part A covers hospital and inpatient care and is usually premium-free; Part B covers outpatient and physician services for a monthly premium.
- Part C (Medicare Advantage) delivers Part A and B benefits through private plans; Part D covers prescription drugs.
- Long-term custodial care and routine dental, vision, and hearing care are generally excluded.
- Medigap fills cost-sharing gaps in Original Medicare, while Medicaid is a separate needs-based program.