This article provides a comprehensive guideline of the working of the medicare insurance program and delineates the medicare qualification criteria.
Medicare is a health insurance coverage program administered by the government. This health coverage program offers a variety of medical services depending on the medicare plan that you can acquire. Typically there are four different medicare plans and each one offers different services. The Medicare insurance program is usually eligible for people with the age of 65 years or above, and also for the youngsters below 65 but with certain disabilities or fatal diseases such as renal problems etc. In this article, we have provided a complete guideline of the medicare health insurance program and have discussed the medicare qualifications and the income limits for medicare 2021.
Table of Contents
- 1 What is medicare?
- 2 Different types/plans of medicare coverage
- 3 Medicare Advantage plans (plan C)
- 4 What are the criteria to qualify for medicare?
- 5 What are the income limits for medicare 2021?
- 5.1 Income limits and payment for medicare plans
- 5.2 Medicare assistance for people with low income
- 5.3 Extra help program
- 6 Medicaid Vs Medicare
- 7 Conclusion
What is medicare?
Medicare is a national health insurance program that sets aside different healthcare services. This program was created by Congress as a part of the Social Security Act in 1965. The medicare program was aimed at giving health coverage to people who are 65 years old or above and they do not have any health insurance. Today this medicare program is funded by the federal government and is administered by the Centres for Medicare and Medicaid Services.
Moreover, in present times the health coverage of the medicare program is extended from people who are 65 or above to the younger people who have certain disabilities and the people with last stage renal diseases (kidney failure, kidney transplant, requiring dialysis), and amyotrophic lateral sclerosis (ALS) or Lou Gehrig’s disease. The program aims at providing different medical services or facilities to the people who are in need of it. However, people need to meet certain medicare qualifications to enjoy the medical benefits that this program offers.
Different types/plans of medicare coverage
Based on the different medical services, Medicare has four different types/plans that people can avail. Each type or part/plan offers a unique set of services for the insurance holder. Following are medicare coverage parts:
- Medicare Plan A
- Medicare Plan B
- Medicare Plan C
- Medicare Plan D
Together medicare part A plan and part B plan are also known as Original Medicare. They cover the basic medicare coverage while the medicare part C plan also covers the basic medicare coverage. However, individuals can also opt to register for medicare part D to get coverage for drugs. Given below is a brief description of each plan:
Medicare part/plan A
Medicare part A provides coverage for inpatient hospital stays, skilled nursing facilities, hospice care and a few other home care. However, this plan does not provide long-term or custodial care.
Typically people pay nothing for medicare part A plan if they have paid Medicare taxes. They can have the part A coverage free as long as they are eligible for the Social Security Program or Railroad Retirement Board Benefits. Moreover, a person can still get the medicare plan A even if they are not ready to receive Social Security retirement benefits yet.
So, it implies that if the person is 65 years old or above (medicare eligibility age) and is not ready to retire, s/he can still have the medicare part A coverage. But keep that in mind that the medicare part A plan has a yearly deductible so, the person needs to spend the deductible amount before the coverage takes over.
Medicare part/plan B
Medicare part B generally provides coverage for outpatient care, medical supplies, doctor’s services, ambulance service, mental health coverage and preventive services. Some of the prescribed drugs also qualify for this plan.
For medicare plan B coverage, a person has to pay a premium each year. The standard part B premium amount in 2021 is $148.50. However, the premiums are higher for those individuals whose annual income is more than $88,000.
Medicare part/plan C
People with Medicaid coverage (health coverage because of the low income) can have the medicare part C plan. Medicare part C offers the services such as hospitalization, doctor or nursing facilities, home health care, lab and x-ray services. In fact, in some states, the coverage of medicare part C is extended to drug availability, dental services, physical therapy and even medical transportation.
Medicare part/plan D
Medicare part D provides the financial coverage for the prescription drugs that are needed. In order to join this medicare drug coverage, a person has to join the Medicare-approved plan that offers drugs. The Medicare-approved plans include the Medicare drug plan and the Medicare Advantage Plans with the drug coverage.
Each plan has a different premium cost and covers the specific drugs however, they cover the standard coverage level set by Medicare. How much a person has to pay for the drug coverage depends on the plan s/he chooses.
Medicare Advantage plans (plan C)
Medicare Advantage plans are an alternative way to get Medicare plan A and plan B coverage. Medicare Advantage Plans are also known as Plan C or Ma Plans. These plans are usually offered by the medicare-approved private companies that follow the rules set by medicare.
Basically, these plans set a limit on the cost that you have to pay each year for covered services. Some of these plans also offer non-emergency coverage that is not in the network but at a higher cost. Some of the medicare advantage plans are:
- Health Maintenance Organization (HMO) plans
- Preferred Provider Organization (PPO) plans
- Private Fee-for-Service (PFFS) plans
- Special Needs (SN) plans
Given below is a brief discussion regarding the services, rules and costs for medicare advantage plans:
Services covered in medicare advantage plans
Most of the services that medicare advantage plans cover are those that are not offered by original Medicare. For example, fitness programs (gym membership or discounts), vision, hearing or dental services.
Moreover, some of the coverage plans also offer the benefits like transportation to visit a doctor and the services that promote your health and wellness. If you are eligible for any medicare advantage plan, before enrollment, it is recommended to thoroughly read the services that it offers so that you can get an idea of all the limitations and benefits that it has.
Rules for medicare advantage plans
As already mentioned above, medicare advantage plans must follow the rules that are set by Medicare but they can have different rules for how you get a service. For instance, whether you need to have a referral to see a specialist etc. however, the rules change every year.
Costs for medicare advantage plans
How much you have to pay for the medicare advantage plans depends on several factors. Most of the time you have to use the health care providers who participate in the plan’s network.
What are the criteria to qualify for medicare?
Typically people are required to meet the Medicare qualification in order to avail the different medical benefits or facilities that the medicare program offers. Following are the requirements to be eligible for the Medicare coverage program:
Medicare eligibility age: People who are 65 years or above
A person with the age of 65 or above can qualify for the Medicare program if s/he is a citizen of the U.S or a permanent resident who has lived in the U.S for almost 5 years. In addition to this, a person can also qualify for the Medicare program if s/he is eligible for the Social Security Insurance or Railroad Retirement Benefits but have not received any of them yet. Moreover, a person who has paid all of the Medicare taxes while working is also eligible for Medicare coverage.
Younger people with certain disabilities
People under the age of 65 can also qualify for Medicare coverage if they have certain disabilities. Here are the few cases in which a young man with a disability can have medicare coverage;
- If the person is entitled to Social Security Disability Insurance (SSDI) benefits for at least two years, then s/he can have medicare insurance.
- If the person receives the disability pension from the Railroad Retirement Board and meets few conditionS or,
- If the person is suffering from high-risk renal diseases such as kidney failure, kidney transplantation, requiring regular dialysis then s/he can also acquire the medicare services.
- Moreover, if the person has Lou Gehrig’s disease which is also known as amyotrophic lateral sclerosis (ALS) then he can directly qualify for the medicare coverage insurance program.
Other ways to acquire health insurance/ medicare
If you are young (below 65) and do not have any disability or any other fatal disease then you do not qualify for the Medicare coverage program. However, if you are a legal citizen of the U.S for about more than five years, then after the age of 65 you will get full Medicare coverage. In this case, you have to buy the medicare premium plans.
Payment for the medicare plan A premium
Medicare plan A offers hospital insurance. But the question is how much you have to pay to buy the premium Plan A to get the services. The answer to this is that the amount you have to pay to purchase plan A depends on how long you have worked. It is because the more you work, the more will be your work credit points. The earning of the work credits depends on the income, and the amount of income required to earn the credit points changes every year.
Here is a deal, if you accumulate fewer than 30 work credits, you have to pay the maximum premium credits, but if you have 30 to 39 work credits you will pay less. And if you have gained 40 work credits then you do not have to pay for any of these premiums.
Payment for the medicare plan B premium
Medicare Plan B covers doctor visits and other outpatient services. Plan B premium is higher for people with a higher income. You can enrol in Plan B without paying for Plan A, however, you can enrol in Plan A only if you Plan B.
Moreover, in order to get enrolled in private insurance, Medicare Advantage Plan which is an alternative to Original Medicare, you have to buy both of the plans, Plan A and Plan B.
Payment for the medicare plan D premium
Plan D offers drug coverage. A person can only enrol in Plan D if s/he is already enrolled in Plan A or B.
What are the income limits for medicare 2021?
Medicare insurance coverage plans and costs almost change every year. Although the medicare plans are available to all people of age 65 years or above, a person’s income can also affect how much you have to pay for a certain Medicare coverage plan.
As mentioned above, how much you have to pay for a certain medicare plan depends on how much you earn or in other words it depends on your income. If you have a higher income, you will have to pay more for the medicare premium plans but the medicare coverage or benefits will be the same. In contrast to this, if you have a low income you might get the assistance to pay your premiums (at this point medicare overlaps with Medicaid).
Given below is a brief summary of income limits for each medicare coverage plan or in other words the required costs for buying the medicare premium plans:
Income limits and payment for medicare plans
Plan A premium
As mentioned earlier, usually the premium plan A is free. However, if you are not eligible for the premium free plan, you can purchase it. For instance, standardly you will have to pay almost $471 to acquire the services of Plan A (this is applicable only in the year 2021). Moreover, the payment for medicare plan A can vary according to your work credit points (explained above)
Plan B premium
The standard amount for the premium plan B is $1480.50, again this is only applicable for 2021. It is because the purchase costs change every year. For instance, if in the year 2022 your income is more than the present income limit then you will have to pay more for the medicare premium plan B.
The amount that will be added to your premium is also known as the income-related monthly adjustment amount (IRMAA). This amount is determined by the Social Security Administration (SSA) based on your gross income on your tax return. The medicare program uses your tax return from 24 months/2 years ago.
Plan D premium
The national-based premium payment for medicare plan D is $33.37 but the cost varies in a similar way as it varies for the premium plan B.
Medicare assistance for people with low income
A variety of medicare savings or assistance programs are available for the people who have low or limited income and need assistance in paying for the original medicare (plan A and Plan B) and drug coverage (Plan D). These medicare saving programs help to pay for the premiums, deductibles, coinsurance and other costs. Typically there are four medicare saving programs. These are:
- Qualified Medicare Beneficiary (QMB) Program
- Specified Low-income Medicare Beneficiary (SLMB)Program
- Qualifying Individual (QI) Program
- Qualifying Individual (QDWI) Program
Given below is a brief summary of each saving program indicating the criteria which makes the people eligible for these programs.
Qualified Medicare beneficiary (QMB) program
If a person’s income is less than $1,094 and his total resources are less than $7,970 then s/he is eligible for the qualified medicare beneficiary program. However, for the married couple, the income limit is less than $1,472 monthly and $11,960 in total. Under the cover of the QMB program, a person will not be responsible for the costs of deductibles, premiums, coinsurance or copayment.
Specified low-income medicare beneficiary (SLMB) program
If a person’s monthly income is less than $1,308 and his total resources are less than $7,970 then s/he can qualify for SLMB. And for a married couple to be eligible for this program, their monthly income should have to be less than $1,762 and their total resources should be less than $11,960. Under this program, a person will not pay for the plan B premium.
Qualifying Individual (QI) program
If a person’s monthly income is less than $1,469 or the resources are less than $7,970 then s/he is eligible for the qualifying individual program. For Married couples to qualify for this program, they need to have less than$11,960 in resources.
The QI program also covers the plan B premium. However, if you have Medicaid you can not qualify for this program. Moreover, you have to reapply yearly, and selection is done on first come first-based service.
Qualifying Individual (QDWI) program
This savings program helps people pay for the Medicare premium plan A if they are under the age of 65 and do not qualify for the free-premium plan A. To be eligible for this program you need to meet these requirements:
- person’s monthly income is less than $4,379
- person’s resources limit is $4000
- a married couple monthly income is less than $5,892
- a married couple resources limit is $6000
Extra help program
The extra help program assists you to pay the premiums for the Medicare Plan D. With the help of this program you can have the prescribed drugs at a much lower price.
Medicaid Vs Medicare
Who is eligible for Medicare and Medicaid?
One of the most frequently asked questions is who is eligible for Medicare and Medicaid programs. The answer to this question is that the people can be ‘dual eligible’ means that they can avail the services of both the programs (if they fulfil the requirements of both Medicare and Medicaid) or they can be eligible for one of the programs among Medicare and Medicaid.
As explained earlier, Medicare is a natural health insurance program that offers different medical services to people who are 65 years old or above, younger people with disabilities and people with certain fatal diseases. On the other hand, Medicaid is a state assistance program that provides health coverage only to people who have low income or earning. Most of the time, both of the programs work together to provide you with health coverage and also to lower your medical costs.
Although both the programs are administered by the government, they are different in terms of providing services and cost-sharing. The medicare program is run by the Centers for Medicare and Medicaid Services (an agency of the federal government) while the Medicaid program is run by the state or local governments within the federal guidelines. Moreover, the Medicare insurance program is usually the same throughout the United States whereas the Medicaid assistance program varies from state to state.
To cap it up, Medicare is a health insurance coverage program that covers a huge area of medical services under different premium plans. As far as the medicare qualification is concerned, people above the age of 65, younger people with some disabilities and fatal diseases can qualify for the Medicare program. Moreover, several other factors can also help you get Medicare coverage, such as medicare saving programs.