What is a Medicare Policy?

A Medicare policy is a federally funded health insurance policy available to United States residents. To receive Medicare, individuals must be 65 years of age or older, disabled and on Social Security benefits, or have a form of kidney disease known as end-stage renal disease, which requires dialysis or a kidney transplant.

Additionally, to obtain a Medicare policy, individuals must have worked for at least ten years. These years of work do not be consecutive. The Medicare program is open to all individuals who meet these requirements, regardless of income.

Developed in 1965, the Medicare program consists of four types of policies. The first, known as Part A, is hospital insurance and provides coverage for hospitalization. The Part A policy covers all hospital expenses such as food, tests, doctor’s fees, and in-patient hospital stays. Private rooms, however, are not covered under the Part A Medicare policy unless deemed medically necessary.

Part B Medicare provides standard medical insurance to eligible recipients, covering expenses such as doctor’s appointments, outpatient surgery, diagnostic tests, and medical equipment. Other than an initial exam, the Part B policy does not cover routine checkups or yearly physicals. To receive these benefits, recipients must meet a yearly deductible and also pay a monthly premium.

Also known as an Advantage plan, the Part C plan allows users to customize their Medicare policy based on their needs. Similar to private health insurance, the Advantage plan allows users to choose either a Health Maintenance Organization (HMO) plan or a Preferred Provider Organization (PPO) plan. Whereas an HMO plan requires users to select a doctor who works within the plan’s network of physicians, the PPO plan allows them to select a doctor outside the network, if they agree to pay more for those services.

The prescription drug plan, or Part D Medicare, helps recipients pay for their prescribed medications. The policy is administered by private insurance companies who meet certain criteria set forth by the U.S. government. Like private insurance plans, prices vary from company to company, so users must compare plans and prices to find the one that is right for their budget.

To enroll in any of the four Medicare policies, individuals must submit an application through their local Social Security office. Applicants should also apply during the open enrollment period, which begins three months before the applicant turns 65, and ends four months after his or her birthday. Individuals currently receiving Social Security benefits are not required to apply for a Medicare policy, however, since they are automatically enrolled in parts A and B when they reach the age of 65.