Medicare in Retirement

Understanding Medicare is like going through a maze–there are rules and regulations on coverage, and sorting out coverage for California educators adds another level of complexity. Let's start with the basics.

What is Medicare?

Medicare is the federal health insurance program for people who are 65 and older.  Medicare is funded by the Social Security Administration, which means it is funded by tax payers.

When should you apply for Medicare?

When it comes time for you to sign up for Medicare, you’ll have some choices to make, and the following information will help.

You can choose the original Medicare program, which is run by the federal government and allows you to go to any health care provider that accepts Medicare, or you can choose to use the Medigap Advantage plans. In the original program, not all services are covered, but you can pay an additional premium for one of the standardized Medigap supplemental policies sold through private insurance companies.

What are the common Medicare programs?

Most individuals have Part A and Part B coverage. Part A helps cover the cost of inpatient care in hospitals, as well as some costs of skilled nursing facilities, hospice, and home health care. Most people do not pay a premium for Part A coverage.

Part B coverage helps pay for doctors' and outpatient costs. The standard premium for Part B in 2018 is $134 a month, but the amount goes up for those with incomes above $85,000 (single filers) or $170,000 (joint filers).

You can also join a Medicare Prescription Drug Plan (Part D) to add prescription drug coverage. Premiums will vary by plan. Learn more about prescription drug coverage on the Medicare website.

Medicare Advantage plans

These plans are run by private companies approved by Medicare. They typically involve a group of doctors, hospitals, and other health care providers who give care to Medicare beneficiaries in exchange for a fixed amount of money from Medicare. They may be:

  • Health Maintenance Organizations (HMOs)–You must go to plan doctors and hospitals, but you have little or no out-of-pocket cost for covered services.
  • HMOs with Point-of-Service (POS) option–You may use providers outside the network, though with higher out-of-pocket payments.
  • Preferred Provider Organizations (PPOs)–You may choose doctors and hospitals outside the network, though at higher cost.

Medigap plans

These policies are sold by private insurance companies to cover some of the uncovered medical expenses in traditional Medicare. These policies are standardized and regulated by Medicare, and must include specific benefits so you can compare coverage and costs. Generally, when you buy a Medigap policy you must have Medicare Part A and Part B. You will have to pay the monthly Medicare Part B premium.


For information on Medigap plans, go to:

To learn more about Medicare, including enrollment information, go to: