If you’re about to turn 65 and know it’s time to start receiving Medicare, don’t assume that it’s just going to come to you automatically. Yes, you can qualify for Medicare eligibility when you’re 65; but you have to sign up for it, and it’s not easy. Medicare is a maze of different parts and programs.
We’ll explain what Medicare is, when you qualify, how you qualify, what the requirements are and all the different types of plans, including parts A, B, C, D and G. It can get confusing. Don’t panic though, we’re going to make it easy for you.
Is Medicare Required?
First, what is Medicare? Medicare is government-sponsored health insurance. It’s funded through payroll taxes, which is just a fancy way of saying they take a little piece out of your paycheck to pay for it. It’s medical insurance for those who otherwise find it impossible or too expensive to qualify for regular health insurance. Is it required? If you’re receiving Social Security, Part A is required. It’s a good idea to sign up for Part B as well, unless you want to pay higher premiums later. The longer you wait to sign up, the more expensive it’s going to be. If you wait until after you’re 65 to sign up for Medicare, there will be financial penalties. We will cover exceptions to those requirements later.
What are the Basic Medicare Requirements?
If you want Medicare, you have to sign up for it. It’s not provided to you automatically.
One exception to this rule is that if you’re disabled and receive Social Security Disability Insurance (SSDI), the government will sign you up automatically after 2 years (in some cases only 1 year) and begin taking Medicare Part B insurance premiums directly from your disability check even if you’re not yet 65. Other than that, you have to sign up for it.
For everyone else, you are eligible for Medicare if:
- You receive retirement benefits from Social Security or the Railroad Retirement Board
- You are eligible for these benefits but just haven’t applied for them yet
- You or your spouse were previously covered by Medicare because you had a government job
In order to qualify for Medicare, you or your spouse had to pay Medicare taxes for at least 10 years. That's between the both of you. Most people do qualify. And even if you don’t meet these requirements, you still can get Medicare Part A; you just have to pay premiums.
To see whether you are eligible for Medicare, check out the Medicare eligibility tool at Medicare.gov.
What are you Signing up for?
Now that you’ve determined you do qualify for Medicare, what exactly are you signing up for? What are all those confusing parts? Let’s start at the beginning with Part A.
Part A covers hospitalization. In particular, it covers:
- Inpatient care at a hospital
- Home care
- Hospice care
- Care at a nursing facility
- Nursing home care (excluding long-term and custodial care)
Basically, if you need to be in a hospital or a hospitallike facility, that’s covered by Part A.
Next is Part B. If you qualify for Medicare, Part A is free. Part B, however, requires you to pay premiums. The amount you pay depends on your income. Income levels start at $88,000 per year or less.
Part B provides medical insurance for things like going to see the doctor, emergency services, specialty treatments, medical equipment, physical and occupational therapy and more. Basically, it covers medical services other than hospitalization.
Part B, however, doesn’t cover dental care, vision, hearing aids or long-term care. It doesn’t cover prescription medication, either. Part B doesn’t pay the full dollar amount of your medical services — just 80%. How can you make up the difference? That takes us to Part C.
Part C is the Medicare Advantage plan. It’s optional and is similar to an HMO or PPO. Also known as MA plans, the Medicare Advantage plan incorporates parts A and B and may also provide additional coverage such as:
- Health and wellness
Medicare Advantage plans are provided via private companies approved by Medicare. They are all-encompassing and not to be confused with Medicare Supplemental Insurance, or Medigap.
Medicare Part D covers prescription medications. Like Part C, Part D is provided by private insurance companies for those enrolled in Medicare, Medicare Advantage or even as a stand-alone benefit. Just like with Part B, it’s recommended you sign up for Part D at the very beginning. If you wait, like with Part B, you may incur penalties.
Please note that some drugs are excluded from Medicare coverage. These include weight-loss and over-the-counter drugs.
Part G, also known as Medigap, fills in the gaps of your coverage. (Note: As of Jan. 1, Part F no longer exists but instead is now incorporated into Part G.) Part G is very popular with baby boomers. For a small annual deductible, Part G provides coverage for all the gaps in Medicare.
Incorporating all the coverage Part F used to provide, Part G pays for hospital deductibles, coinsurance and copays. It also covers the 20% that Part B doesn’t.
It’s important to note that Medicare and Medicaid are not the same. Many people get these confused. While Medicare is a retirement benefit. Medicaid provides health coverage for those who otherwise cannot afford it. These people include:
- Low-income individuals
- Pregnant women
- The elderly
If you don’t qualify for Medicare, there’s a good chance you do qualify for Medicaid. To find out more about Medicaid, or to apply, please check out Medicaid.gov.
Benzinga’s Best Medicare Supplemental Carriers
More informed now and think you need a supplement for your Medicare? Most do. The next question is: Where do you get it? There are so many choices out there.
Don’t worry. Benzinga has put together a list of trusted companies.
When is the Right Time to Sign up for Medicare?
If you’re approaching 65 years of age, or are there already, you need to sign up for Medicare. Unless you’re still working and otherwise covered, Medicare may be your only choice. Just like with private insurance policies, the longer you wait, the more expensive it’s going to be.
If you’ve also decided that you’re going to need supplemental insurance, or would like to wrap it all up in one convenient, affordable package like Medicare Advantage, the next question is: Where do you get it? Answer: a private carrier like the ones listed above. A qualified health insurance agent from any one of these reputable companies can lead you through what on your own would prove to be a daunting process.
To find out more about Medicare, please check out these other helpful and informative Benzinga.com articles.
Frequently Asked Questions
What are the requirements to receive Medicare?
Generally speaking, Medicare is for seniors 65 years of age or older currently receiving Social Security or railroad retirement benefits. Disabled people on SSDI and government employees are exceptions to this rule.
To qualify for Medicare, you or your spouse needs to have paid into the Medicare system for 10 years or more through payroll taxes. What this means is that if you had a job for 10 years or more (or you and your spouse had the same combined total), then the money to pay for your Medicare was already taken out of your taxes. That means you qualify. If for some reason you did not pay 10 years worth of taxes, you can still qualify for Medicare — you just have to pay the Part A premiums yourself.
Is it mandatory to go on Medicare when you turn 65?
It is not mandatory that you sign up for Medicare when you turn 65. It is, however, recommended. Unless you plan to continue working and have coverage through your employer, or perhaps are a veteran and insured through the Veterans Administration, you really should sign up for Medicare. If you wait, penalties will ensue. As a result, your premiums will be higher.
Once you start receiving Social Security benefits, you can sign up for Medicare. Medicare is, after all, managed by the Social Security Administration.
One exception to the rule is if you’re disbaled and receiving SSDI benefits. If so, you will be automatically enrolled in Medicare after 2 years — sooner if the date of your disability goes back 1 year or more.