Medicare

What is Medicare?
Medicare is a federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant). Medicare typically covers the costs of emergency, preventative, and long-term healthcare. 

Who qualifies for Medicare? 
There are three groups who qualify to receive Medicare:

• People who are 65 and older.
• People under 65 years old who are disabled and who have been receiving Social Security Disability benefits for at least 24 months.
• Qualified people with End Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis, also known as ALS or Lou Gehrig’s disease.

If I’m covered for Medicare, is my spouse automatically covered as well?
No. Medicare is an individual enrollment. Both you and your spouse must sign up for coverage and the policies are not related. There is no family coverage under Medicare.

Am I automatically enrolled in Medicare when I turn 65?
Many people automatically get Original Medicare – also known as Part A and Part B – especially if they’re receiving Social Security retirement benefits when becoming eligible for Medicare coverage. Other people may need to sign up for Medicare.

If you’re aging into Medicare, you have a seven-month Initial Enrollment Period (IEP) to apply for Medicare: three months before you turn 65, the month you turn 65, and three months after you turn 65. And you must sign up individually for the parts of the program – Parts A, B, C and/or D – that you want.

What are the “parts” of Medicare?
There are four “parts” of Medicare. Here’s a quick rundown, along with links to learn more about each part:

• Part A is Hospital Insurance. This primarily covers hospital stays and some stays in skilled nursing facilities.
• Part B is Medical Insurance. This covers doctors’ visits, lab tests, and outpatient procedures, just to name a few.
• Part C is Medicare Advantage. These are plans offered by private companies to provide Medicare benefits.
• Part D is Prescription Drug Coverage. This is optional for beneficiaries.
• Medigap, or Medicare Supplement Insurance, helps cover costs not met by Original Medicare, such as deductibles and co-pays. Various standardized plans exist, each with unique benefits. It complements only Original Medicare and doesn’t cover prescription drugs; for that, one would need a separate Medicare Prescription Drug Plan (Part D).

You may also choose a Medicare Supplement Insurance Plan, also known as Medigap, to complete your Medicare coverage.  Medigap supplemental insurance plans are designed to fill Medicare Part A and Part B coverage gaps.

I have health insurance already through an employer. Do I have to enroll in (and pay for) Medicare at age 65?
It depends what kind of health insurance you have. If you have insurance through your employer or your spouse’s employer and the primary insured is still working, you may not be required to enroll in Medicare as long as the company sponsoring your coverage has at least 20 employees. In this case, you’ll have a special enrollment period after you (or your spouse) retire or leave that employer.

On the other hand, if your insurance is through an employer you’ve already retired from, you still have to sign up at 65. If you are required to sign up for Medicare Part B, and don’t, you’ll face a permanent penalty of 10% of the Medicare Part B premium for every year you were supposed to enroll but didn’t.

It’s also worth noting that since Medicare Part A is free, it generally doesn’t make sense to delay signing up for it, even if you’re not required to. Your employer’s insurance will be your primary coverage, and Medicare will be secondary. However, since Part B comes with a premium, it does make sense to wait if you’re still covered by your employer’s plan.

I’m still working and on my employer’s health insurance plan. When I turn 65, do I need to sign up for Part B during my Initial Enrollment Period?
No. You can wait until you’re ready to retire and move off your employer plan or your spouse’s insurance plan if that is an option. When you do so, you’ll be eligible for a Special Enrollment Period and have an eight-month window to sign up for Part B. The eight-month period begins when your employer or union coverage ends or when your employment ends, whichever is first. Be sure to elect Part B at that time so you don’t have to pay a lat e enrollment penalty. That penalty is 10% a year for late enrollment.