Key takeaways

  • To be eligible for Medicare, individuals must be U.S. citizens or legal residents who have resided in the United States for at least five years and have worked at least 10 years in Medicare-covered employment.
  • Medicare includes Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage), Part D (prescription drug coverage), and Medigap (supplemental insurance).
  • While Original Medicare (parts A and B) costs, such as premiums and deductibles, are standard across the U.S. and set annually, costs for Part D, Medicare Advantage, and Medigap vary based on private insurance companies and chosen plans.

Medicare is a federally funded health insurance program primarily for individuals ages 65 and older, and some people under 65.

It provides different types of coverage, including for outpatient care, hospital stays, and prescription drugs, depending on the part or specific plan that provides coverage. Once you’re eligible, you can choose the plan, or combination of plans, that best fits your healthcare needs.

Whether you’re enrolling for the first time or simply learning more, here are the basics of this federal health insurance program.

You are eligible if you’re a U.S. citizen or legal resident, you’ve lived in the United States for at least 5 years, and you:

If you fulfill these criteria, you can purchase Medicare Part A and Medicare Part B, which together make up Original Medicare. You may, however, also qualify for premium-free Part A if you have worked and paid taxes for at least 10 years in the United States.

If you already receive benefits from the Social Security Administration (SSA) or the RRB, you don’t need to apply for Medicare. You’ll be automatically enrolled in Original Medicare as you approach age 65.

About three to four months before your birthday, you’ll get your Medicare card and enrollment details in the mail. If you’d like drug coverage (Medicare Part D) or prefer a Medicare Advantage plan (Medicare Part C), you can sign up for those during your initial enrollment period.

If you’re not enrolled automatically, you’ll need to apply for Original Medicare yourself, along with any extra coverage you want. In this case, here’s what you need to know if you’re approaching eligibility and want to enroll in Medicare:

  • Part A: You can sign up for Medicare Part A (hospital insurance) and Medicare Part B (medical insurance) 3 months before or after your 65th birthday, the month of your birthday, and 3 months after your birthday month.
  • Part B: At 65, if you’re still covered by employer insurance, you can decline Part B to avoid premiums by following the cancellation instructions on your Medicare card. You then have eight months to re-enroll without penalty, which you may wish to do if you know you’ll retire or lose your other coverage.
  • Part C: You can enroll in a Medicare Advantage plan (Part C) instead of Original Medicare during special periods throughout the year. Offered by private insurers, these plans match Original Medicare benefits and may add drug, dental, or vision coverage, but may have higher premiums and limit you to local providers.
  • Part D: Private Medicare Part D stand-alone plans cover prescriptions. Enrollment guidelines mirror those of Part C plans. You may have to pay a penalty fee if you do not sign up during your enrollment eligibility dates.
  • Medigap: Medigap is a supplemental private plan that can help you offset the cost of copays and deductibles that original Medicare doesn’t cover. It is only intended to cover remaining costs, and as such generally doesn’t cover medical care.

Original Medicare usually doesn’t cover the following:

  • eye exams for glasses
  • long-term care
  • cosmetic surgery
  • massage therapy
  • routine physical exams
  • hearing aids and related exams
  • concierge medicine
  • items or services from non-participating providers.
  • dental care

That said, some of these services may be covered by a Medicare Advantage plan with added benefits.

The costs of Original Medicare, such as premiums and deductibles, are set annually and are the same across the United States.

The most recent costs are available on Medicare.gov. Most people don’t pay a premium for Part A if they’ve worked and paid taxes for at least a decade. If you do have to pay it, the amount will depend on how long you or your spouse has worked in the United States.

On the other hand, Part D, Medicare Advantage, and Medigap costs vary. This is because they’re administered by private insurance companies, and your costs will depend on the specific plan you choose in your geographic area.

By inputting your zip code, you can explore your available options once they become available on Medicare.gov.

The Centers for Medicare & Medicaid Services (CMS) typically announces updated Medicare costs for the following calendar year sometime in the fall of the previous year, around the time of the open enrollment period from October 15 to December 7.

The official Medicare & You handbook, available on Medicare.gov, contains all the information you need about how Medicare works, your coverage options, and your anticipated costs.

Some mistakes you’ll want to avoid with Medicare include not taking the time to understand how Medicare works and how much it may cost, missing crucial enrollment periods, and not reviewing your coverage annually and changing it if needed.

Enrolling in Medicare may seem difficult, but it doesn’t need to be. If you do your research before enrollment, you’ll be well informed.

If you still have questions about what coverage you will need and can afford, you can meet with a financial advisor or speak with a Medicare representative. Start planning early, and you’ll feel more confident once enrollment begins.