Updated March 2022
Medicare is a government-run health insurance program for people who are 65 or older, or who have disabilities. It helps cover the costs of medical care, including doctor visits, hospital stays, and prescription drugs.
To enroll in Medicare, you must be a U.S. citizen or permanent resident and meet one of the following eligibility requirements:
You’re 65 or older.
You’re under 65 but have been diagnosed with a qualifying disability.
You’re the spouse or child of a person who meets either of the above criteria.
There are three ways to enroll in Medicare: online, over the phone, or in person. You can sign up for Medicare during the seven-month window that begins three months before your 65th birthday and ends three months after your birthday.
If you don’t sign up for Medicare during this time period, you may have to pay a penalty. However, there are some situations in which you may be able to enroll outside of this window. For example, if you’re still working and have health insurance through your employer, you can delay enrolling in Medicare until you retire.
During the Enrollment Process, you’ll be Asked to Choose a Medicare Plan. There are Four Main Types of Medicare Plans:
Medicare Part A
The premium covers hospital costs, such as a stay in the intensive care unit or hospice care.
The majority of individuals don’t pay a monthly premium for Part A (often known as “premium-free Part A”). In 2022, you’ll be required to pay up to $499 each month for Part A. The basic Part A premium is $499 if you have paid less than 30 quarters in Medicare taxes. If you’ve paid Medicare taxes for 30-39 quarters, the basic Part A premium is $274.
The Part A hospital inpatient deductible and coinsurance are combined to form the overall hospital inpatient deductible and coinsurance.
Every benefit period has a deductible of $1,556.
The coinsurance for each benefit period is as follows:
Each benefit term has a deductible of $1,556. There is no coinsurance for the first 60 days. For the remaining 40 days of each benefit term (up to 60 days in total), there will be $778 per day in coverage. Once you’ve reached your lifetime reserve days, all fees are subject to the same rate structure as out-of-network services.
Medicare Part B
Part B premium covers doctor visits, preventive screenings, and other outpatient services.
The national average Part B premium is $170.10 (or higher, depending on your income).
You pay 20% of the Medicare-Approved Amount for most doctor services, outpatient therapy, and durable medical equipment (dme) after your deductible is met. For most doctor services (including most doctor services while you’re a hospital inpatient), you usually pay 20% of the Medicare-Approved Amount.
Medicare Part C
Also known as Medicare Advantage. It’s a type of private health insurance that covers the same benefits as Parts A and B, but often with additional perks, such as dental and vision coverage.
The monthly premium for Part C varies depending on the policy.
Medicare Part D helps cover the cost of prescription drugs.
The monthly premium under Part D varies depending on the plan (those with higher incomes may pay more).
You’re not required to enroll in all four parts of Medicare. However, most people do enroll in Part A because there is no monthly premium for this coverage. If you don’t enroll in Part A, you may have to pay a late enrollment penalty.
Should You Enroll in Medicare when you turn 65?
If you have job-based health insurance through your (or your spouse’s) present employer, you typically do not need to join Medicare until you (or your spouse) cease working or lose coverage. You can postpone signing up for as long as you want, but not indefinitely: either stop working or lose your health insurance (whichever occurs first).
If you work for yourself or don’t have health insurance that is available to everyone at your company: Look into whether your insurance plan qualifies as an employer group health plan (as defined by the IRS.) If it doesn’t, enroll in Medicare when you reach 65 so you won’t pay a monthly Part B late enrollment penalty.
If the employer has less than 20 workers, you may need to enroll in Medicare before age 65 so that your job-based insurance doesn’t end. Check with your employer.
If you have COBRA coverage, sign up for Medicare at age 65 to avoid gaps in coverage and a monthly Part B late enrollment penalty. If you have COBRA before signing up for Medicare, your COBRA insurance is likely to terminate once you do so.
There are a variety of Medicare plans available, so it’s important to do your research before enrolling. You can compare plans online or speak with a Medicare representative to find the plan that’s best for you.
Enrolling in Medicare is a big decision, but it’s an important step in securing your health and financial future. With Medicare, you’ll have peace of mind knowing that you’re covered for medical expenses should you need them.