Medicare

Example

“When Robert turned 65, he enrolled in Medicare Part A and B, then added a Part D prescription drug plan to help cover his monthly medications.”

Memory Tip

Medicare = Medical care for Seniors - it's medical care coverage that kicks in when you're a senior at 65.

Why It Matters

Medicare provides essential healthcare coverage during retirement when you're no longer covered by employer insurance and may have increased medical needs. Understanding Medicare helps you plan for healthcare costs in retirement and avoid penalties for late enrollment.

Common Misconception

Many people believe Medicare covers all healthcare costs in retirement, but it actually has significant gaps including most dental, vision, and long-term care services. Additionally, Medicare Parts B and D require monthly premiums, and there are deductibles and coinsurance costs that can add up to thousands annually.

In Practice

Janet, age 67, has Original Medicare with Parts A and B, paying $164.90 monthly for Part B in 2023. When she needed knee replacement surgery costing $35,000, Medicare Part A covered the hospital stay after her $1,556 deductible, and Part B covered 80% of the surgeon's $8,000 fee after her $226 annual deductible. Her total out-of-pocket cost was approximately $3,400, while Medicare paid over $31,000 of the total expenses.

Etymology

Created in 1965, the name combines 'medical' with 'care,' designed to indicate a program providing medical care. It was modeled after the existing Social Security system and was part of President Lyndon Johnson's Great Society programs.

Common Misspellings

Related Terms

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Other insurance terms you should know

See Also