Medicare Savings Programs

4.2.1.4 Medicare Overview

Medicare is a federal health insurance program for most people age 65 or older, people who are certified disabled, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant). The Centers for Medicare and Medicaid Services (CMS) determines who is eligible for Medicare. Medicare eligibility usually begins the month a person turns age 65. People who have been certified disabled by the Social Security Administration (SSA) and are receiving Social Security Disability Insurance (SSDI) have a 24 month wait before Medicare coverage can start.

Medicare has four parts:

Part A is hospitalization insurance. Most people are entitled to premium-free Medicare Part A if they or their spouse has the required work history. Adult children with a disability may be eligible based on their parent’s work history. People who do not have required work history can pay a premium for Medicare Part A.
Part B is medical insurance. Medicare Part B has a monthly premium.
Part C is Medicare Advantage. Most Medicare beneficiaries can choose to participate in Medicare Advantage plans, which combine Part A, Part B, and, sometimes, Part D coverage. Private insurance companies approved by CMS manage Medicare Advantage plans. Many Medicare Advantage plans only charge the monthly Part B premium, others have higher monthly premiums and offer additional benefits.
Part D is prescription drug coverage. Medicare Part D is available to people entitled to premium-free Medicare Part A or enrolled in Medicare Part B. Enrollment in Medicare Part D is voluntary, but premium penalties apply for late enrollment by people without other drug coverage. People have a wide variety of Medicare-approved plans from which to choose. Some Part D beneficiaries who have limited income and assets are eligible for premium and cost sharing subsidies. These subsidies are referred to as Extra Help or Low-Income Subsidy (LIS).

A person can be on all, some, or one of the Medicare parts at a time.

See the Types of MSP policy for information about how MSPs help people keep their Medicare coverage by paying some Medicare expenses.

Legal Citations

United States Code, title 42, section 1395c

United States Code, title 42, section 1395j

United States Code, title 42, section 1395w