If you’ll soon turn 65, you’re probably starting to think about Medicare. It’s the federal health insurance program that covers more than 66 million Americans.
Understanding a new health plan can be a challenge. Here’s a summary of the basics, or what everyone should know about Medicare.
Who’s eligible for Medicare?
Medicare is health insurance. It’s generally available to United States citizens and many legal residents who are at least 65 years old.
But that’s not all. It’s also open to some younger adults with disabilities. People who have end-stage renal disease (ESRD) may get Medicare, too. ESRD is kidney failure that needs dialysis or a transplant.
What kinds of plans are available?
To date, there are two main ways to receive Medicare coverage:
Original Medicare has two parts. Part A is hospital insurance. This covers:
- In-patient hospital care
- Care in a nursing facility
- Hospice care
- Some home health care
Part B is medical insurance. It covers:
- Outpatient hospital care
- Preventive services
- Medical supplies
There is usually a cost for each service. Most people have both Plan A and Plan B.
You may buy extra insurance to pay costs not covered by Parts A and B. One option is Medicare Supplement Insurance, also known as Medigap. Another is Part D, which is prescription drug coverage. Many people buy both.
A Medicare Advantage Plan is also referred to as Part C. It is health insurance offered by a private company that works with Medicare.
Medicare Advantage plans give you coverage similar to Plan A and Plan B. Plans include:
- Health Maintenance Organization (HMO) Plans
- Preferred Provider Organization (PPO) Plans
Medicare Advantage may also help cover:
- Vision
- Dental
- Prescription drugs; most Medicare Advantage Plans include Part D
If you have a Medicare Advantage Plan, you cannot buy Medigap, which offers a bigger choice of providers and emergency international travel coverage.
How much does Medicare cost?
Odds are you paid Medicare taxes over the years. If you or your spouse paid enough, you will likely not have to pay a monthly premium for Part A. (Most Americans have paid enough.) This is called “premium-free Part A.”
If you are required to purchase Part A, the monthly premium will be either $278 or $505. It depends on how long you paid Medicare taxes.
Everyone needs to pay a monthly premium for Part B. The amount is decided by your income. To figure out your payment, Medicare uses your tax return from two years before you enrolled. In 2024, this cost will be at least $174.70. (Learn more about costs on Medicare.gov.)
Some people will not receive a bill. Instead, they will have Part B premiums taken out of their benefits. These can include people getting benefits from:
- Social Security
- Railroad Retirement Board
- Office of Personnel Management
When and how do you sign up?
You will be automatically enrolled in Medicare if you meet certain criteria and:
- You’re turning 65 and get Social Security benefits
- You’re under 65 and have a qualifying disability
- You have been diagnosed with certain chronic illnesses (including ESRD)
What if you are not automatically enrolled? You may sign up on your own. Adults turning 65 have a seven-month period to enroll in part B. This period:
- Begins three months before their 65th birthday
- Continues the month of their 65th birthday
- Ends three months after their 65th birthday
If you wait too long to enroll in Part A or Part B, you may have to pay a penalty fee. You could also have a gap in coverage.
You may still be working at 65. If you are and you have insurance through your job, you may still want to enroll in Part A. Speak to someone in your human resources department for guidance.
Some people miss enrollment due to unusual circumstances. In this case, you may be able to enroll during a Special Enrollment Period.
Want to change your Medicare plan? You can do it during the open enrollment period if you meet certain criteria. Every year, this period runs from October 15 to December 7.
For more information on Medicare, visit the official website at Medicare.gov.
Sources: Data.CMS.gov. Medicare Enrollment Dashbo... + 6
- Data.CMS.gov. Medicare Enrollment Dashboard for September 2023. Accessed January 25, 2024.
- Medicare.gov. Enrolling in Medicare Part A & Part B (pdf). January 2018.
- CMS.gov. Original Medicare (Part A and B) eligibility and enrollment. Page last updated December 1, 2021.
- Medicare.gov. Costs. Accessed December 29, 2022.
- Medicare.gov. Joining a health or drug plan. Accessed December 29, 2022.
- U.S. Office of Personnel Management. Medicare Premiums. Accessed January 26, 2024.
- AARP. How are Medigap and Medicare Advantage different? January 24, 2023.
