Medicare 101

There is a lot to unpack when it comes to Insurance for Seniors. This ultimate guide is designed to be a go-to educational resource to help you navigate this sometimes confusing landscape.

The Basics And Other Things You Should Know​

Table of Contents

In the 2018 calendar year, 59,989,883 million United States (U.S.) citizens enrolled in the Medicare program. That’s close to 60 million people around the U.S. who have been enrolled in Medicare and are using the Medicare program to pay for their healthcare services.

How Do You Become Eligible for Medicare?

In order to become eligible for Medicare, the following has to apply to you:

  • You’re at least 65-years-of-age or older.
  • You’re under the age of 65 and have a disability in which you’re receiving Social Security Disability Insurance, for a particular period of time.
  • You suffer from End-Stage Renal Disease (permanent kidney failure that requires dialysis or a kidney transplant).

How is Medicare Funded?

Medicare is a Federal Government-funded health insurance program, administered and managed by the Centers for Medicare & Medicaid Services (CMS). The Medicare program is funded partly by Social Security and the following:

  • Medicare taxes that are imposed on your income (automatically deducted from your paycheck).
  • From Medicare premiums that are paid from people who are enrolled in the Medicare program.
  • The Federal budget.

How to Enroll in the Medicare Program

In order to enroll in the Medicare program, you have to sign up through Social Security. If you’re over the age of 65 and haven’t been receiving benefits from Social Security, then you must sign up in order to enroll in the Medicare Part A and Part B benefit; it won’t happen for you automatically. Once you sign up, you’ll be automatically enrolled in Medicare Part A. If you’re receiving benefits from the Railroad Retirement Board, you’ll receive the Medicare Part A and Part B benefit automatically when you’re first eligible. Then you choose your Medicare coverage:

  • Original Medicare – Comprising of Medicare Part A and Part B.
  • Medicare Advantage – An alternative to Original Medicare that can include Medicare Part D.

Enrollment Periods

When first becoming eligible for Medicare, there’s a seven-month Initial Enrollment Period where you’re able to sign up for Medicare Part A and Part B. Once you become eligible for Medicare at the age of 65, you’re now able to sign up during that seven-month Initial Enrollment Period due to the following circumstances:

  • Starting three-months prior to the exact month you turn 65-years-old.
  • The exact month you turn 65-years-old.
  • Ending three-months after the month you turn 65-years old.

You can enroll in Medicare Part A and Part B during the General Enrollment Period as well. The General Enrollment Period is between January 1 through March 31 of each year. You’d only be eligible to enroll during the General Enrollment Period if you either didn’t sign up for Medicare when you were first eligible, during the Initial Enrollment Period, or you’re not eligible to enroll during Medicare’s Special Enrollment Period. Note: There is a chance you may have to pay higher premiums due to your late enrollment in Medicare Part A or Part B. It’s better to sign up and enroll as soon as you’re eligible to do so. After your Initial Enrollment Period ends, you have an opportunity to enroll in Medicare during a Special Enrollment Period. If you haven’t retired yet and are still working, therefore you’re still being covered under a group health insurance plan via your employer, you’re eligible to enroll in Medicare Part A and Part B at any time; as long as the following applies:

  • Either you, your spouse (if you’re married), or a family member (if you happen to be disabled), is still employed and working.
  • You’re covered under a group health insurance plan through your employer.

There’s also an eight-month Special Enrollment Period in which you’re eligible to enroll in Medicare Part A & Part B if one of these situations occur (whatever situation happens first):

  • After you finish working and are no longer employed with that employer – the month after your employment ends.
  • The month after the group health insurance plan ends, based on your employment ending.

What Does Medicare Cover?

Medicare is comprised of a variety of parts. Those parts are as follows: Medicare Part A (Hospital Insurance) Benefit – This benefit covers:

  • Inpatient hospital care
  • Services and care while in a skilled nursing facility (SNF) (not custodial or long-term)
  • Hospice care
  • Home health care
  • Nursing home care (inpatient care while in a SNF)

In general, you don’t have to pay a premium for the Medicare Part A benefit as you’ve already paid into the system by means of the Medicare tax deductions from your paychecks through the years. Medicare Part B (Medical Insurance) Benefit This benefit covers:

  • Specific doctors’ services
  • Preventive services

Medicare Part B also covers services, such as clinical research, ambulance services, durable medical equipment, mental health services, inpatient and outpatient care, partial hospitalization stays, and qualified outpatient prescription drugs. Medicare Part D (Prescription Drug) Benefit This benefit tacks on prescription drug coverage for the following plans:

  • Original Medicare
  • Certain Medicare Cost Plans
  • A number of Medicare Private-Fee-for-Service Plans
  • Medicare Medical Savings Account Plans

Medicare Part D plans are purchased through private insurance plans.

What Doesn’t Medicare Cover?

There are certain instances and procedures that Medicare Parts A & B won’t cover. Medicare doesn’t cover the following:

  • Long-term care (or custodial care)
  • Some dental treatments
  • Eye exams, in relation to eyeglasses and eyeglass prescriptions
  • Dentures
  • Cosmetic surgeries
  • Acupuncture services
  • Hearing aids and hearing aid fitting exams
  • Standard (routine) foot care

Read more of what you need to know about Medicare here.

Supplemental Medical Insurance for Seniors

Medicare supplement plans help patients cover extra expenses—but which ones are the best choices?  New enrollees to Medicare are often surprised to find that the comprehensive medical insurance, wide-ranging as it is, doesn’t address every single cost incurred in a medical visit or hospital stay. Thanks to private insurers, there’s a reasonable source for defraying some of those incidental charges. Medicare supplement plans—slangily known as “Medigap” plans—are sold by private insurers to help Medicare patients cover secondary costs original Medicare doesn’t cover. Medigap policies help defray extra expenses that would otherwise fall in the laps—and pocketbooks—of the insured. So when a healthcare expense is incurred, the primary insurer (i.e., Medicare) pays everything up to the coverage limits. This coverage may not address expenses for copayments or total deductibles or leave the policyholder on the hook for additional expenses. That’s where Medigap plans come in. This supplemental insurance pays for certain parts of medical treatment—most often, the above-mentioned copayments and deductibles—as sort of “backup” funding for the patient. Since Medigap plans are sold by private insurers outside Medicare, they offer a level of fluidity older patients often require for emergencies and unexpected circumstances. “Medigap gives you flexibility without having to worry about a physician network,” insurance broker Garrett Ball explained in 2017. “Medigap’s more predictable (with) out-of-pocket costs. With Medigap, you don’t have copays in most cases. You pay a higher monthly premium, but you know you’re only going to have a certain amount of OOP costs.” Supplemental insurance plans are only available for those who already have Medicare coverage, and can be tricky to get because of some quirks in certain states. (Those with Medicare Advantage plans can’t get Medigap plans, either.) But they’ve helped a huge number of older citizens stave off a mountain of excessive costs for late-life medical care.

What Medicare Supplemental Insurance Plans Cover

Each of the 10 Medigap plans offers one aspect of full coverage across the board, with no exceptions. That’s the Medicare Part A coinsurance and hospital costs. Part A basically addresses any inpatient hospital stay the policyholder may experience, including skilled nursing care, hospice care, and some aspects of home healthcare. All Medigap plans pay 100% of the coinsurance and copayment charges incurred. From there, each plan offers different coverage levels for different things:

  • Medical Part B Coinsurance and Copayments — Simply stated, this refers to medical insurance that doesn’t involve a stay in the hospital. It includes doctor office visits, preventative care, vaccines or shots, outpatient mental health and rehab, chemotherapy or physical therapy, wheelchairs, and other equipment and services.
  • First Three Pints of Blood — Some patients have to pay for the initial stages of their blood transfusions. Some Medigap plans cover all or part of the first three pints.
  • Medicare Part A Hospice Care Coinsurance or Copayments — For those facing life expectancies of six months or less or are receiving palliative care rather than efforts to cure an illness.
  • Skilled Nursing Care Facility Coinsurance — This is coverage for in-patient rehab centers with on-site, trained medical staffers handling some specific therapy needs for patients.
  • Deductibles for Parts A & B — Medigap plans offer different percentages of recouping for patient-paid upfront costs; some cover all, some cover half and others cover none.
  • Part B Excess Charges — These address some of the overage fees in case you visit a doctor not in the Medicare network.
  • Foreign Travel Emergencies — Since Medicare doesn’t cover the treatment you receive if you’re visiting a foreign country, some Medigap plans offer to cover a large amount of your incurred expenses away from America. Some do not.

There are some catches to Medigap coverage. For one thing, the plans are generally administered on a state-by-state basis—they’re not universal, across-the-board offerings. Some states don’t offer every single plan. Others have alternate requirements regarding eligibility age. There are other minute variations as well. It’s worth checking out your state’s offerings and conditions before you sign up. Find out all about the 10 Medigap options in our article, Mind the Medigap: Filling the Coverage Holes Medicare Leaves Behind.

Prescription Drug Plans for Seniors

As you approach retirement age, you’re probably also looking forward to becoming eligible for Medicare.

All too often, seniors assume that prescription drugs are covered under Medicare Part A and Medicare Part B. This is not the case. You will be responsible for securing your own prescription drug coverage. Medicare Part D will cover medications needed outside of a professional care setting. 

As you approach retirement, health insurance is a major consideration, and prescription drug coverage will go hand-in-hand with that healthcare. The cost of some life-saving drugs is on the rise, and without adequate coverage, you may have to make some difficult decisions.

We don’t want that to happen. You and your retirement nest egg should be protected against unexpected pharmaceutical costs—and that can only happen under the coverage of a Medicare-approved prescription drug plan.

You’ll have some research to do, since plan costs vary, along with the types of drugs each plan covers.

Two Types of Prescription Drug Plans for Seniors

When you enroll in Medicare, you will have the option to purchase drug coverage as well. Even if you don’t currently take any medications, we recommend that you look into prescription drug plans for seniors at the time you enroll. Otherwise, you’ll pay penalties, in the form of higher premiums. 

There are two different ways you can acquire Medicare-approved drug coverage.

The first is to enroll in a Medicare drug plan, which adds prescription drug coverage to Original Medicare (Part A or B), some Medicare Cost Plans and certain Private Fee-For-Service plans.

The second is to enroll in Medicare Part C or any other Medicare plan that includes prescription drug coverage. 

Currently, 43.5 million Americans are enrolled in Medicare Part D.

A little more than half of them have stand-alone prescription drug plans, while a little less than half are enrolled in a Medicare Advantage plan (KFF). If that already sounds complicated, understand that you’re not alone in that assessment.

Let’s start at the beginning by making a list of things you’ll need to know before you shop prescription drug plans for seniors.

Before You Enroll in a Medicare-Approved Drug Plan

When it comes to finding the prescription drug plan that’s perfect for your retirement, some decisions are best made before you shop.

Here are some questions you should answer first:

  • What drugs are you currently taking?
  • Which of those drugs are generic?
  • What is your financial tolerance for additional future medication costs?
  • Are you able to cover fluctuating drug costs throughout the calendar year? Or will you be on a fixed income, requiring monthly expenditures to remain constant?
  • How important are low premium costs?
  • How important are extra benefits?
  • Will you tolerate restrictions on your choice of doctors, providers and hospitals?
  • Will you need home delivery of medications?

After you have answers to these questions, you can start looking for your Medicare-approved prescription drug plan.

But before you proceed, keep in mind that if you’re currently enrolled in a Medigap plan that covers prescription medications, you should advise Medigap that you’re getting coverage from another Medicare prescription drug plan. They will remove drug coverage from your Medigap plan and your premium will be adjusted.

Keep in mind that this voluntary change in coverage can only be done during open enrollment, and those dates are subject to change.

If you already have prescription drug coverage from a plan outside Medicare, that insurance company is required to notify you if your plan offers creditable coverage. That means payments are comparable to those of a Medicare drug plan.

Choosing from Prescription Drug Plans for Seniors

As you start to research plans, some vocabulary can be helpful.

You’ll read and hear these terms:

  • premium: monthly payment to keep your prescription plan active
  • deductible: the amount you must pay, annually, before insurance starts to pay (Medicare deductibles are currently capped at $435)
  • initial coverage: this is the period after your deductible has been met and your plan provider starts to cover prescription costs
  • copayment (copay): flat fee you’re responsible for paying every time you fill a prescription
  • coinsurance: percentage you’re responsible for paying every time you fill a prescription
  • coverage gap: after the plan covers a set annual dollar amount, your out-of-pocket responsibilities may increase 
  • catastrophic coverage: after you’ve paid an out-of-pocket maximum, copayments are lowered
  • step therapy: often, a generic drug will be dispensed first, to test its effectiveness (unless an exemption is filed by your doctor)
  • quarterly limit: every drug comes with a predetermined limit for how much can be dispensed in a three-month period (amounts exceeding the quarterly limit must be approved by your doctor)
  • prior authorization: a pharmacy may require your doctor to confirm that a prescription is medically necessary before the plan provider pays for it

The list of plans available to you will vary based on where you live.

To learn about available plans, call 1-800-MEDICARE, visit the Medicare Plan Finder, or find the Medicare plan that’s right for you.

Next, you’ll want to gather some information about all available plans:

  • monthly premium
  • annual deductible
  • your drugs that are covered
  • your drugs that are not covered
  • final cost for each drug
  • total monthly cost for all drugs
  • participating pharmacies
  • mail order availability
  • coverage in more than one state (if needed)
  • plan ratings
  • date coverage can start

Remember those questions you answered earlier?

Compare your answers to the information you’ve gathered for each plan. One of those plans will meet all (or the majority) of your prescription drug needs and budget. 

There will be contact information listed with each plan.

Have your Medicare card handy when you call them to enroll.



A Few Words About Major Prescription Drug Plan Providers

Depending on where you live and the coverage you need, you will likely see plan availability from Aetna, Cigna, Humana, WellCare and UnitedHealthcare. They are currently the major players…the big dogs. 

Of course, you’ll need to look into each plan to determine which one is best for you. It’s also important to understand that coverage can change from year to year.

Find out more about individual prescription drug plans for seniors in our full article here.

Dental Insurance for Seniors

Seniors often find themselves shopping for dental insurance for the very first time.

That’s because Original Medicare doesn’t cover the majority of dental procedures (unless they’re part of a hospitalization). 

Medicare Part C plans (a.k.a. Medicare Advantage Plans) are delivered by private insurance companies, and will sometimes include dental coverage. 

If your Medicare plan does not include dental insurance, you have a few options:

  1. Pay full price for dental cleanings and procedures.
  2. Find a low-cost clinic or dental school. 
  3. Purchase a separate dental insurance plan.

Before you decide, let’s take a look at how dental insurance works.

How Dental Insurance for Senior Works

Just like health insurance, dental insurance companies collect premiums from their customers. They generally have a list of in-network dentists who will complete work for discounted rates, and the insurance company will pay for all or a portion of those charges. 

Preventive care is usually 100% covered. These services include cleanings and x-rays.

From there, they often cover 80% of basic services like fillings, extractions and heavy cleaning services. And major dental procedures, like dentures, bridges, root canals and crowns…you can expect them to cover 50% of the expense.

Some dental procedures are covered by some plans and not by others—braces, missing teeth, cosmetic treatments and implants, for instance. That’s why it’s important to read the fine print for any dental plan you’re considering.

You may not have these problems now, but if you would in the future, is there room in your budget? Or would you be better off if they were covered? 

There are other variables too, including copays, yearly maximum payouts and waiting periods.

Let’s go through what those terms, and more, mean:

  • Premium:  This is the monthly payment made to the insurance company to purchase coverage. 
  • Annual Maximum:  This is the insurance company’s ceiling for payments. If your annual maximum is $5000, the plan provider will only pay that much within a calendar year. Anything above that, you will be responsible for. Or you can put the procedure off until after the new year.
  • Deductible:  Before your dental coverage kicks in, you will be responsible for paying 100% of fees up to a predetermined amount. If the dental plan has a deductible, and it’s $500, you will have to pay $500 to the dentist before coverage starts. 
  • Coinsurance:  Coinsurance is always a percentage, not a flat rate. It’s the portion that you’re responsible for paying.
  • Copay:  You are also responsible for a copay; however, it’s a flat rate rather than a percentage.
  • In-Network:  These providers have a contract with the dental insurance company and offer reduced rates to patients who have purchased a plan from that company. 
  • Waiting Period:  This is the amount of time that must pass between the purchase of a dental insurance plan and having dental work done. This is to deter patients from buying insurance just to have one costly procedure completed. 
  • Pre-Existing Condition:  This is a dental problem or complication diagnosed before purchasing the dental insurance plan. Waiting periods exist to protect dental insurance companies from the costs associated with pre-existing conditions.

That’s a quick overview of how dental insurance for seniors works.  Now, click here to find out if dental insurance is worth it for you.

Funeral Insurance for Seniors

Life Insurance for Funeral Expenses

The cost of an average funeral is over $8,500 but the price ranges drastically depending on a variety of factors, making it a challenging financial burden for many families following the loss of a loved one.

As a final gift to those they leave behind, more and more Americans are taking out final expense insurance, also called funeral insurance or burial insurance.

Here’s everything you need to know to determine whether final expense insurance is right for you.

Evaluating your need for Final Expense Insurance

Not everyone needs final expense insurance, so it’s important to evaluate your need before proceeding.

These steps can help you make an informed decision:

  • Familiarize yourself with laws in your state that address pre-need or final expense insurance.
  • Evaluate the resources available to assist with burial expenses. Do you have an adequate life insurance policy or estate that can cover the costs?
  • Visit with your family about the need for insurance, including implications for them, and request their insight and input in the decision.
  • Compare plans and costs from different insurance providers so you’re well-informed on the options available. It’s important to compare at least two or three plans (with different insurance providers) before committing to a policy.
  • Meet with an attorney for guidance.

You might find that final expense insurance isn’t a good investment for you, but you may find that it offers you – and your family – peace of mind that’s well worth the investment.

If that’s the case, here’s what you need to know to secure and use your coverage.

How burial insurance works

Although final expense insurance goes by many names, the policy is simply a whole life policy.

The primary differences between your traditional whole life insurance policy and your burial insurance are the amount of coverage and the beneficiary.

When you take out a whole life policy with the sole intention of covering funeral and burial expenses, you’ll choose an amount sufficient for those services – typically around $10,000.

If you have other plans for your traditional whole life policy, this supplemental policy can protect those dollars by covering final expenses and easing the burden on your loved ones.

Many people list their funeral home as the beneficiary of final expense insurance, and in many cases, the funeral home requires this in order to pre-plan services. This is called pre-need insurance.

In contrast, your survivors are most likely listed as the beneficiaries for your traditional whole life policy.

Continue reading here to compare Funeral Insurance policies and find out the next steps.

The Best Auto Insurance for Seniors

Senior drivers can find it challenging to find quality automobile insurance coverage, but through The AARP® Auto Insurance Program from The Hartford, affordable auto insurance coverage is possible.

The AARP® Auto Insurance Program from The Hartford is offered exclusively to drivers over the age of 50 and who are members of the AARP. It rewards drivers 50+ for their years of experience on the road, giving them access to a host of benefits and discount options and an outstanding claims processing service and customer service and support system. 

What You Can Expect from The AARP® Auto Insurance Program from The Hartford Coverage

There are many advantages for drivers 50 and over to have a policy through the AARP® Auto Insurance Program from The Hartford, which is why we’ve designated it as the best auto insurance for seniors. AARP has carefully vetted a number of insurance providers before choosing The Hartford based on many factors, including exceptional customer service, the company’s ability to tailor coverage to the specific needs of senior drivers, and the financial strength and dependability of the firm. 

The AARP® Auto Insurance Program from The Hartford offers:

  • Policy discounts only available to AARP members
  • RecoverCare. This unique coverage pays for cooking, cleaning, transportation, and other services if you are injured in an automobile accident that isn’t covered by health insurance or Medicare, depending upon your state of residence.
  • New car replacement if your new car is totaled within the first 15 months of ownership or 15,000 miles after you buy it, whichever comes first. 
  • Your premium is locked for one year so that it does not increase.
  • Lifetime car repair assurance if you have it repaired at an approved shop.


Discounts and Benefits with The AARP® Auto Insurance Program 

AARP members enjoy several discounts available exclusively to them when purchasing automobile insurance from The Hartford, including bundling their auto policy with home or renters’ policies for additional policy savings. Savings can be up to as much as 20% on home and renters’ policies. Drivers with a clean driving record can also earn reduced deductibles over time. 

If two insured cars are in a single accident, only the higher of the two deductibles will be used rather than both. In some states, you can also get a discount for used specific repair facilities. The Hartford also offers additional features drivers can opt to add to their policy, such as collision protection, glass repair, personal injury, and more at an additional cost.

You may also get additional discounts for:

  • Taking an approved defensive safe driving or defensive driving course
  • Paying for your auto policy for the full year
  • Cars with alternative fuels
  • Cars with more than one airbag
  • Anti-theft devices in your car

You can also opt for additional features through The Hartford’s Advantage Plus package, including first accident forgiveness, disappearing deductible, waiver of deductible, and a $100 collision deductible. All of these vary in availability by state, so check with The Hartford for details.


Why It’s So Important to Work with The Right Car Insurance Company

When you’re in your thirties and forties, your auto insurance rates often drop because you’re more experienced. Car insurance in your fifties is usually reasonably priced. You’re a safe driver with plenty of experience, and you’re still in good health. Your reflexes are quick, your hearing and vision remain reliable, and you’re confident in your driving skills.

Once you hit 65, however, many insurance companies are going to penalize you for growing older, which is why it is important for you to have the best auto insurance for seniors.

Senior drivers as a group are more prone to minor accidents than middle-aged drivers. Part of this is attributable to changes such as slower reflexes, hearing loss, and poor vision as well as medications and health problems. 

When an accident does happen, seniors often suffer more severe injuries and are laid up longer. They may need more assistance for at-home care or transportation longer than their younger counterparts. Treatments costs can be higher, and the need for compassionate customer service and support can be crucial following an accident. Having the right insurance provider can make all the difference in getting the best possible rate and coverage and support you deserve.

How You Can Help Reduce Your Auto Insurance Rates

You can help reduce your auto insurance rates even more by taking a few steps on your own as a driver. While not every one of these will help in all states, you can check with the AARP® Auto Insurance Program from The Hartford to see which ones apply in your state to see how they impact your premiums. 

Take a Driver’s Safety Course

There are many driver’s safety courses geared toward seniors that can lower your rates. They focus on refreshing your skills, updating your knowledge of the rules of the road, and ensuring your fine motor skills are honed. There are currently 34 states that offer premium deductions for safe driving courses from approved locations.

Trade Down

You may love your expensive, luxury car, but it may be costing you a bundle in insurance premiums. Consider trading it in for a less expensive model with lower rates. Vehicles that are a few years older but reliable and safe are a wise investment that will also save you in repairs and upkeep.

Limit Your Driving

If you have the opportunity to take advantage of available transportation through a residential living facility, public transportation, or merely limiting outings, talk to your insurer about a rate reduction. Some policies are based on how much you drive, and if you are under a particular mileage limit, you pay less.

Find out more about the AARP® Auto Insurance Program from The Hartford and how you can make sure you’re getting the best auto insurance for seniors by reading here.