Turning 65? Here’s What You Need to Know About Medicare.

Medicare is a federally funded program, available since 1965, that provides health care coverage to Americans over age 65. The application process and options can be confusing, so it pays to be prepared. For those turning 65 soon, this guide explains your options and tells you how to sign up for Medicare.

Healthcare Coverage Under Medicare

No matter how you choose to get your Medicare benefits (via Original Medicare or Medicare Advantage, also called Part C), there are several types of health care coverage available to you, the first two of which are government-funded:

• Part A – Hospital Insurance. This coverage pays for inpatient hospital stays, hospice care and some skilled nursing care. It is usually premium-free and is available to anyone age 65 or older who has worked—or whose spouse has worked—and paid Medicare taxes for a minimum of 10 years.
• Part B – Medical Insurance. Medicare Part B offers coverage for services from doctors and other health care providers, outpatient hospital care, home health care, medical equipment and some preventative services. Part B is not free: At a minimum, you pay the Part B monthly premium set by the federal government ($174.70 for 2024).
• Part D – Prescription Drug Coverage. This part of Medicare is always purchased through a private insurer that offers full or partial coverage for prescription drugs, depending on the policy you choose. The premium amounts for Part D vary and depend on your income level, but the national base premium in 2024 is $34.70.

Original Medicare Versus Medicare Advantage (Part C)

If you choose to get your Medicare coverage through Original Medicare, it includes Part A and Part B. Although the Part A coverage is premium-free for eligible recipients, there is a deductible for hospital stays ($1,632 for 2024). In addition to paying the Part B premium set by the federal government, you’re also subject to 20% coinsurance amounts on health care covered under parts A and B.

With Original Medicare, you have the option to add Part D prescription drug coverage through a private insurer approved by Medicare. You can also add Medigap, a supplemental Medicare policy that helps cover some out-of-pocket expenses associated with Original Medicare.

Some of the biggest benefits to choosing Original Medicare include:

• You can go to any provider who accepts Medicare, including when you’re traveling to other parts of the U.S.
• No referrals to specialists are needed from a primary care provider (PCP).
• You can stay with your doctor even if they move to another practice, as long as that new practice accepts Medicare.

The biggest disadvantages to Original Medicare:

• There is no annual cap on your out-of-pocket expenses.
• It doesn’t cover dental, vision or hearing care.

The alternative to Original Medicare is Medicare Advantage, otherwise known as Part C. It is a Medicare-approved plan provided by a private insurance company that includes Part A and Part B, typically in the form of a health maintenance organization (HMO) or preferred provider organization (PPO). Many Medicare Advantage plans also offer Part D coverage as part of their package, eliminating the need to buy it separately.

Depending on the plan, the benefits to Medicare Advantage can include:

• An annual limit on your out-of-pocket expenses.
• Additional coverage for things like dental, vision and hearing care.
• Lower out-of-pocket expenses, such as your coinsurance amount.

The disadvantages of Medicare Advantage:

• You’re typically restricted to in-network providers, otherwise you’re not covered either in full or part, depending on the plan.
• A PCP typically has to refer you to specialists.
• When you’re traveling out of your HMO’s or PPO’s geographic area, you’ll have to see an out-of-network provider, which will likely cost you more.
• You could pay an additional amount over the government-set Part B premium.
• You’re ineligible to buy a Medigap plan to cover out-of-pocket expenses.

It is important to understand all the details of a Medicare Advantage plan before enrolling in one.

How to Sign Up for Medicare

If you’re ready to sign up for Medicare, you can do so online or in person at the nearest Social Security office. Applicants will need to provide their birth certificate or other proof of United States citizenship or legal residency.

Many employees stay on at their jobs past their 65th birthday and continue to enjoy the health coverage provided by their employer. These employees do not need to sign up for Medicare as soon as they hit 65—they’ll be given a special enrollment period when they stop working that will allow them to avoid the surcharges of otherwise late enrollment.

If an employee wants to keep their employer health coverage and also get coverage through Medicare, that is permitted as an option. In this scenario, Medicare would be used as a secondary insurance and the applicant would sign up for Part A since that coverage is free and will be used to fill in the gaps of the employer’s insurance plan.

What to Know Before Applying for Medicare

Before signing up for Medicare coverage, know these important facts:

1. You have a seven-month window to enroll in Medicare.

Medicare eligibility begins at age 65, but applicants can sign up three months before the month of their 65th birthday, and up to three months after their birth month. Benefits are retroactive dating back to the applicant’s 65th birthday.

2. It pays to enroll on time.

Signing up for Medicare during your initial enrollment window is crucial. It ensures you have coverage in place should the need for it arise. It also helps you avoid lifelong surcharges on Part B premiums, which can amount to 10% for each year-long period you’re eligible for Medicare but not enrolled in it.

3. You’re eligible to delay enrollment without penalty in certain circumstances.

If you’re still working at age 65 or older and have a comprehensive health care plan through your employer, you can wait. The same goes for someone age 65 or older who is covered by their spouse’s employer-based health plan.

4. Special enrollment periods cover situations where you’re laid off.

If you delay enrollment because you’re still working and covered by your employer, but you get laid off, you’re eligible for a special enrollment period to sign up for Medicare without incurring a delayed-enrollment penalty similar to when you voluntarily retire past age 65.

How to Make Changes to a Medicare Plan

Once you’re covered by Original Medicare or Medicare Advantage, it is important to review your coverage annually to make sure it is still the best choice for you. You can do this during the annual open enrollment period, which runs from October 15 through December 7 each year. At this time, you can make changes to your Medicare Advantage plan or Part D prescription plan or switch from Medicare Advantage to Original Medicare. Any changes made during this period take effect on January 1 of the following year.