Medicare is federal health insurance for people 65 and older, as well as some individuals under 65 with disabilities or specific conditions.
Medicare has several parts that provide different types of coverage. Part A covers hospitals, skilled nursing facilities, and hospice; Part B covers doctor visits, lab tests, and medical equipment; and Part D covers prescription drugs. Medicare Part C, also known as Medicare Advantage, is actually an alternative insurance to Medicare offered by private insurers.
In order to qualify for any or all parts of Medicare, you must be a U.S. citizen or a permanent resident who has lived continually in the U.S. for the five years immediately preceding application for Medicare, and in one of these categories:
- Age 65 or older
- Age 18 or older who have received Social Security disability benefits for at least two years
- Age 18 or older who have Railroad Retirement benefits or Railroad Retirement disability benefits
- Those with end-stage renal disease (ESRD) and amyotrophic lateral sclerosis (ALS, also known as Lou Gehrig's disease)
Part A coverage is free if you (or another qualifying person, like your current or former spouse) paid Medicare taxes while working (generally at least 10 years). If you are 65 or older and can’t meet the tax minimum requirements, you may still be able to purchase Part A.
Do you automatically get enrolled in Medicare if you receive Social Security benefits?
“If you are receiving Social Security retirement, disability benefits, or Railroad Retirement checks, you are automatically entitled to and enrolled in Medicare Part A and Part B. Because Part B is voluntary, you can decline it, but there can be serious consequences, ”says Kata M. Kertesz, a senior policy attorney for the Center for Medicare Advocacy, a national, nonprofit law organization. When you are automatically enrolled, you will be able to receive Medicare benefits the first day of the first month that you turn 65, she says.
Individuals who are 65 years of age and are not receiving Social Security benefits may still enroll in Medicare but must file an application, says Kertesz. As the full retirement age for Social Security is gradually increasing to 67, this is an important point. Every year more people reaching age 65 must apply for Medicare because they are not yet receiving Social Security benefits.
When to apply for Medicare
If you’re not yet receiving Social Security or Railroad Retirement benefits, you must enroll in Parts A and B during an initial enrollment period, which begins in the third month before you reach age 65.
When you enroll during the three months prior to turning 65, Medicare coverage will begin the first day of the first month when you turn 65. If you enroll in Medicare the month you turn 65, or in any of the initial three months after turning 65, coverage will begin the first day of the following month.
If you miss enrolling in Part B during your initial enrollment period, you must wait for a general enrollment period to enter Medicare Part B. The general enrollment period (GEP) is the first three months of each calendar year (January 1 through March 31).
When to apply for Medicare Part C (Medicare Advantage)
As a Medicare beneficiary, you have the option to receive Medicare coverage through a participating private Medicare Advantage (MA) plan. These plans must offer the services currently available under Medicare Parts A and B. Some plans offer additional benefits, including prescription drug coverage, vision, and limited dental.
In order to enroll in an MA plan, you must first enroll in Medicare Parts A and Part B. You can enroll in an MA plan right after you get Part B coverage, during the annual coordinated enrollment period (ACEP), October 15 through December 7 of each year, or switch MA plans, or return to traditional Medicare during the Medicare Advantage Open Enrollment Period from January 1 to March 31.
When to apply for Medicare Part D (prescription benefit)
You can enroll in Medicare Part D at the same time you enroll in Medicare Part B. You can also enroll during the ACEP.
What are the penalties for late enrollment?
Enrolling in Medicare after the stated enrollment period has significant ramifications.
Financial penalties can apply to those who enroll late in Medicare Parts A, B, and D, says Kertesz.
Individuals may also miss out on coverage, and be forced to pay out-of-pocket medical expenses.
Do you need to sign up for Medicare when you turn 65 if you’re still working and have health insurance from your job?
With more people working past age 65, this is something you may need to consider.
The rules vary depending on the number of employees at your company.
If you’re still working at a job with more than 20 employees after you turn 65, you can sign up for Medicare Part B when you (or your spouse) stop working and/or lose health insurance, if that happens first. You won’t pay a penalty for late enrollment. If you meet the requirements to get Medicare Part A without a premium, you can sign up for Part A when you turn 65 or anytime after that. Your job-based insurance pays healthcare expenses first, and Medicare pays second.
If you’re still working at a job with less than 20 employees after you turn 65, you can sign up for Medicare Part B when you (or your spouse) stop working and/or lose health insurance, if that happens first. You won’t pay a penalty for late enrollment. However, you should ask your employer about health insurance coverage. If you don’t sign up for Part A and Part B when you turn 65, your job-based health insurance might not cover your health care costs. If you choose to sign up for Medicare and keep your job-based insurance, Medicare pays for healthcare expenses first, and your job-based insurance pays second.
Who is eligible for Medicaid and other low-income plans?
Medicaid is administered by states and offers additional health coverage to those already enrolled in Medicare who qualify. To qualify for Medicaid benefits, Medicare beneficiaries must meet eligibility criteria based on both financial and non-financial requirements and varies by state.
Additional programs administered by state Medicaid agencies offer financial assistance to low-income Medicare recipients. These include Medicare Savings Programs (MSPs), with eligibility requirements that vary by state. Medicare Extra Help can also help with prescription drug costs.
