An Introduction to Medicare
New to Medicare? Learn about your enrollment and coverage choices.
Welcome to your Medicare Experience!
Since its inception in 1965, Medicare has played an important role in providing health insurance coverage to millions of Americans aged 65 and older.
If you are new to Medicare, you may be wondering where to get started. Here, we’ll introduce you to some of the main components of Medicare and the different ways it can impact your healthcare.
We’ll also cover the relevant criteria for eligibility and important dates for enrollment. So, when it comes time for you to enroll, you’ll have a better understanding of the process and your coverage options.
Medicare is a federal insurance program that assists over 60 million Americans. It helps both older individuals and those with qualifying disabilities save on their healthcare costs.
The federal agency that runs Medicare is the Centers for Medicare and Medicaid Services (CMS). The Medicare program is funded by FICA taxes withheld from your income, premiums paid by some for certain coverage, and the federal budget.
Medicare coverage may look a bit different from one enrollee to the next, as there are choices in coverage that allow people to better meet their individual needs.
Medicare itself is a broad program that is designed to assist with hospital, medical, and other healthcare costs for all eligible Americans.
What Should I Know Before Enrolling In Medicare?
Most people are eligible for Medicare once they reach the age of 65. However, Medicare is also extended to those under the age of 65 if they have End Stage Renal Disease or are receiving disability benefits from Social Security.
If you are 65 years old and you (or your spouse) have worked 10 years in Medicare-covered employment (paid 10 years of FICA tax), then you are eligible for premium-free Medicare Part A coverage.
When it comes to enrolling in Medicare, it is important to note that there are only certain periods during which you can actually sign up.
Your first chance to enroll will come 3 months prior to your 65th birthday. This marks the start of your Initial Enrollment Period.
Your Initial Enrollment Period will include your birthday month and extend for 3 additional months afterwards. This is the best time to sign up, as you can avoid any gaps in your coverage and avoid any late penalties too.
There is also a General Enrollment Period that runs from January 1 – March 31. In this case, your coverage will start on July 1st and you will also likely have to pay a late enrollment penalty.
It is important to note that generally the longer you wait to sign up for Medicare, the greater your late penalty will be (unless if you qualify for a Special Enrollment Period).
Late penalties continue to apply to your premiums for as long as you have the coverage.
In addition to those mentioned, there are other enrollment periods throughout the year for different coverage options. You can learn all about these enrollment periods and more in our Guide to Enrollment.
Signing Up for Medicare
When you're ready to enroll in Medicare, you will sign up through Social Security. There are three options available to do so.
Medicare Sign Up Options:
Sign up online at the Social Security website.
Phone call: 1-800-772-1213 (TTY: 1-800-325-0778)
Local Office Visit: Find your local office using the Social Security Office Locator.
Medicare Part A helps to cover your inpatient care in a hospital or skilled nursing facility. Most individuals are eligible for premium-free Part A coverage.
However, if this does not apply to you, there is still the option to purchase Part A coverage. In this case, you will pay a monthly premium for Part A.
Medicare Part B helps to cover medically necessary services, such as doctor services and outpatient care. Part B also covers preventive services, such as shots, screenings, and annual wellness visits.
Part B coverage comes with a monthly premium that applies to all enrollees.
Together, Part A and Part B make up what is known as Original Medicare (or Traditional Medicare).
Additional Medicare Coverage Options
Medicare Part C (also known as Medicare Advantage) bundles the coverage of Part A, Part B, and often times Part D (prescription drug coverage).
In addition, Medicare Advantage plans often provide other benefits not covered by Medicare such as vision, dental, hearing, and wellness programs.
Medicare Advantage plans are only offered through Medicare-approved private insurance companies. These plans often come with a monthly premium and costs vary between plans.
Medicare Part D provides Medicare enrollees with prescription drug coverage for both brand name and generic drugs.
Anyone with Medicare is eligible to purchase a Part D plan. The drugs covered by Part D plans vary from one to the next, so individuals must choose and join the plan best for them.
Part D plans are only offered through Medicare-approved private insurance companies. These plans come with a monthly premium.
Choosing Your Medicare Coverage
Once you become eligible to enroll in Medicare, it is important to have a good understanding of your coverage options.
When it comes time to choose your coverage, you want to make sure you have carefully weighed all the important factors. How you choose to receive your benefits can affect your out-of-pocket costs and where you can receive care.
For example, if you choose to keep Original Medicare coverage, you will find that you are covered to visit most doctors and hospitals in the country.
A Medicare Advantage plan, on the other hand, has a provider network (similar to how many employer-based insurance plans work) that places restrictions on your access to certain doctors and hospitals.
However, Medicare Advantage plans often include prescription drug coverage and other benefits not covered by Original Medicare, whereas Original Medicare will require you to purchase a separate drug plan (Part D).
Weighing these different coverage options, and factoring in your personal preferences, financial position, and healthcare requirements, will help you to arrive at the best option for you.
Important Medicare Decisions to Consider
Should I Keep My Part B Coverage?
Unlike Part A, Medicare Part B comes with a monthly premium, so not every one decides to enroll when first eligible.
For example, if you are still receiving health insurance from an employer at age 65, you may choose to postpone your enrollment. In this case, you will qualify for a Special Enrollment Period once you retire.
However, in some cases not enrolling in Part B when first eligible may result in a late enrollment penalty.
It is important to note that if you are already receiving benefits from Social Security or the Railroad Retirement Board you will be automatically enrolled in both Part A and Part B.
If you don’t want to keep the Part B coverage, be sure to inform Medicare prior to your coverage start date.
Do I Need Medicare Part D?
If you have Original Medicare coverage and want prescription drug coverage, you will need to join a Medicare Part D plan.
However, if you have chosen to join a Medicare Advantage plan, most already include prescription drug coverage.
Do I Need Supplemental Medicare Coverage?
Medicare Supplement plans, also known as Medigap, offer additional coverage not provided by Original Medicare.
Depending on what you require in your health insurance coverage, you may decide you want a policy to help pay for certain out-of-pocket costs (i.e. coinsurance and deductibles).
Just like with Medicare Part D, you cannot use a Medigap policy if you have chosen a Medicare Advantage plan.
Your Medicare Card
Everyone that is enrolled in Medicare receives a Medicare card. Once you sign up, you’ll receive your card in the mail roughly 2 weeks after enrolling.
The card is paper material and red, white, and blue in appearance. You will find the card included in a “Welcome to Medicare” packet.
Anytime you receive healthcare services, you will show your Medicare card. It is important to remember that you should only share your Medicare information with your doctors and healthcare providers.
Helpful Medicare Resources
Medicare has created a helpful Year 1 Checklist to guide you through your introductory year with Medicare.
Also, during your enrollment process or to confirm at any time, you can always check your enrollment status.
If you have other insurance and are interested in seeing how it will work Medicare, you can read about that here.
Up Next: Understanding Medicare Eligibility