Original MedicareUnderstanding The Basics

Original Medicare is a government program that offers health insurance to people age 65 or older, those who are younger than 65 with a qualifying disability, and anyone at any age with End-Stage Renal Disease (ESRD) or ALS. Benefits and coverage with Original Medicare are the same across the country.

Original Medicare Parts A & B

Original Medicare consists of two broad types of coverage, Part A and Part B:

  • Part A for hospital services (mainly for inpatient care and related services)
  • Part B for doctor’s office visits and emergency care (mainly for outpatient care and related services)

While Original Medicare covers many health care expenses, it is typically not enough for most people’s needs. Medicare was never designed to pay 100% of all health care costs, and does not cover most prescription drugs, which places significant financial responsibility on you to pay for the rest. You can choose to purchase additional insurance plans from private insurance companies on the Alight Retiree Health Exchange. More information can be found in Building Complete Coverage

What does Part A cover?

  • Hospitalization (including room, board, tests, procedures) for up to 90 days per year
  • Skilled nursing facility care for up to 60 days per year
  • Home health care services
  • Hospice care

Premium: There is no premium if you or your spouse made payroll contributions to Social Security for at least 10 years.

Deductible: Part A deductibles are charged by the benefit period (begins the day you are admitted to the hospital and ends when you’ve been out of the hospital 60 days in a row).

Copay: Copays for Part A apply once you stay in a hospital for more than 60 days in a single benefit period. In a skilled nursing facility, copays begin after the first 20 days.

Coinsurance: Home hospice patients may pay a small coinsurance amount for inpatient respite care so the patient’s caregiver can rest or have time off.

What isn’t covered by Part A: Custodial care (care that helps with daily life activities like eating and bathing); long-term care; most care outside of the United States; days spent in a psychiatric hospital beyond certain set limits; and hospital stays beyond certain set limits.

What does Part B cover?

  • Doctors’ office visits
  • Lab tests
  • Outpatient hospital care
  • Home health care not covered by Part A
  • Durable medical equipment and supplies
  • Orthotics and Prosthetics
  • Mental health care
  • Ambulance services
  • Preventive services

Premium: There is a standard monthly premium which may be higher based on your income.

Deductible: There is an annual deductible.

Coinsurance: You generally pay 20% of the Medicare-approved amount for the covered services you use, with no annual out-of-pocket maximum. Medicare pays the remaining 80%.

Accepting Assignment: Be sure that your healthcare providers take Medicare and “accept assignment.” These providers agree to accept the amount that Medicare will pay for a visit or service as payment in full — so you would only pay the 20% coinsurance. Providers who do not accept assignment can charge you more.

What isn’t covered by Part B: Eye exams, eyeglasses or contact lenses; hearing tests or hearing aids; dental exams, cleanings, X-rays or routine dental care; and most prescription drugs.

What additional insurance can do for you

It’s important to think about buying additional insurance that:

  • Completes your coverage
  • Fills most of the gaps between your actual costs and the amount Original Medicare pays
  • Protects your financial security and peace of mind

This additional health insurance — Medicare Advantage (Part C or MA), Prescription Drug Coverage (Part D), and Medicare Supplement (also known as Med Supp or Medigap) — is designed to pay costs that Original Medicare doesn’t. You must be enrolled in Part A and Part B before you can purchase this additional insurance. The combination of Original Medicare and these coverage options may help with the cost of medical care and possibly provide financial security. Your options for additional coverage are detailed in Building Complete Coverage

Enrolling in Original Medicare

Most people enroll in Original Medicare as soon as they become eligible at age 65.

When can you enroll?

Initial Enrollment: You have a 7-month period during initial enrollment. You can join 3 months before the month you turn 65, the month you turn 65, and up to 3 months after the month you turn 65.

General Enrollment: If you didn’t sign up for Part A and/or Part B during Initial Enrollment, and you aren’t eligible for a Special Enrollment (see below), you can sign up between January 1 - March 31 each year. You may have to pay a higher Part A and or Part B premium for late enrollment.

Special Enrollment: Once your Initial Enrollment Period ends, you may have the chance to sign up for Medicare during Special Enrollment. If you didn’t sign up for Part A and/or Part B when you were first eligible because you were covered under a group health plan based on current employment, you can sign up:

  • Anytime you’re still covered by the group health plan
  • During the 8-month period that begins the month after the employment ends or the coverage ends, whichever happens first.

How to enroll:

Contact Social Security (not Medicare) to enroll for the first time in Original Medicare. There are 3 ways to enroll:

During initial enrollment, Part A (Hospital insurance) is automatic, because there’s no premium; Part B (Medical insurance) is optional, because it requires a monthly premium.

If you choose NOT to enroll in Part B during your initial enrollment, you may have to pay a late enrollment penalty if you change your mind later. The longer you delay, the higher the penalty.