I. Medicare: Understanding the Basics

Since 1966, seniors age 65 and older have relied on Medicare for essential healthcare coverage. The program was later expanded to provide coverage for other groups and to allow seniors to buy into the program. The range of coverage and options for eligible individuals were further enhanced over time, and today Medicare has four distinct components:

Original Medicare

Original Medicare consists of two elements — Parts A and B. Also known as hospital insurance, Part A provides coverage for inpatient care, skilled nursing facility services following a hospital stay, hospice care, and limited home health care services. Part B covers physician services, preventive care, outpatient hospital services, and medical supplies. Part A is premium-free for most individuals, but there are monthly premiums for Part B coverage, as well as deductibles and co-insurance costs for various services with both Parts A and B.

Medicare Part C — Advantage Plans

Medicare Advantage (MA), or Part C, plans were first introduced in 1997 as alternatives to Medicare’s original coverage. There are six types of Advantage plans offered through Medicare-approved private insurance companies. Each type has unique requirements and limitations, and not all are available in every locale.

Medicare Advantage plans must provide all the services normally included in Part A and Part B coverage, except for hospice care, which is still covered through original Medicare. Most also offer additional benefits, such as prescription medication coverage, wellness programs, vision care – including eyeglasses – and dental care. If you decide to enroll in a Medicare Advantage plan, you’ll pay a monthly premium in most cases, along with your Part B premium and out-of-pocket Medicare costs, such as deductibles and co-insurance.

Medicare Supplement Plans

Medicare Supplement – or Medigap – plans are offered through private insurers under the oversight of the federal government. There are 10 standardized plans available to individuals with Part A and Part B coverage to help reduce out-of-pocket costs. The plans pay varying percentages of original Medicare co-insurance and deductibles, and some also provide coverage when you travel outside of the U.S.

Medicare Supplement plans don’t cover dental or vision care, eyeglasses, hearing aids, long-term care, or private-duty nursing services, and most don’t include prescription medication coverage. If you sign up for a Medicare Supplement plan, you’ll pay a monthly premium in addition to any premiums you already pay for Medicare Part A and Part B.

Medicare Part D

Medicare Part D provides prescription medication coverage for individuals enrolled in Medicare Part A and Part B and some Medicare Supplement plans through approved private insurance companies. Each plan has its own list of covered medications and may restrict you to using certain approved providers. Part D policies typically have monthly premiums, annual deductibles, initial and catastrophic coverage limits, and tiered copayments for prescriptions. These costs can differ significantly depending on the particular plan and where you live.

II. Eligibility Guidelines for Original Medicare

Medicare Part A and Part B coverage is usually available to U.S. citizens and permanent legal residents once they reach age 65. If you or your spouse paid Social Security taxes through employer-based work or self-employment for at least 10 years, you’re eligible for Part A coverage. You may also qualify through your spouse’s work record when you turn 65 as long as he or she is age 62 or older.

Am I Eligible for Medicare?

You are eligible for Medicare Part A without any monthly cost if:

  • You’re currently receiving retirement benefits through Social Security or the Railroad Retirement Board
  • You qualify but haven’t yet filed for these retirement benefits
  • You or your spouse worked as a Medicare-qualified local, state, or federal employee for the required amount of time

Meeting the criteria for Part A Medicare also entitles you to Part B, but you will have to pay a monthly premium for this coverage.

If you or your spouse are over age 65 but haven’t paid Social Security taxes at all or for long enough to qualify for no-cost Part A coverage, you may still apply to enroll in Medicare through the Social Security Administration and pay monthly premiums for both Part A and Part B coverage, or Part B alone.

In many cases, individuals are automatically enrolled in Medicare when they turn 65 and don’t need to apply for Medicare coverage. However, if you have to pay Part A premiums, you delayed signing up when you were first eligible, or you weren’t enrolled automatically, you may have to enroll during these specific periods:

Initial Enrollment Period

Everyone who becomes eligible for Medicare coverage, or signs up but must pay Part A premiums, is entitled to an initial enrollment period (IEP) that starts three months before their 65th birthday, includes their birthday month, and then extends three months beyond their 65th birthday. A person’s coverage start date depends on exactly when they enroll during this seven-month period.

General Enrollment Period

Every year, Medicare has a general enrollment period from January 1st to March 31st of each year. Individuals age 65 or older can enroll during this period, and their coverage begins on July 1st of the same year.

Special Enrollment Period

A special enrollment period is available to individuals who continued to work after turning 65 and had group health insurance through their employer or union or maintained coverage through their spouse’s employer. This eight-month-long period is offered regardless of whether an individual pays for Part A coverage or receives it at no cost, and it begins the month after their group coverage or employment ends.

III. How to Qualify for Early Medicare Eligibility

Although the scope of Medicare was originally limited to individuals age 65 and over, amendments made to the program over time have extended its coverage. Medicare is now available to those as young as age 20 who qualify for Social Security Disability Insurance (SSDI) or Railroad Retirement Board disability benefits, as well as individuals diagnosed with amyotrophic lateral sclerosis (ALS) or end-stage renal disease (ESRD) who apply for SSDI benefits.

If you qualify for early enrollment in Medicare Part A and Part B, how you enroll and when your coverage begins depends on your circumstances:

  • If you apply for and are approved for SSDI or Railroad Retirement Board disability benefits, you are automatically enrolled in Original Medicare after a 24-month waiting period, and your coverage begins in month 25.
  • If you apply for SSDI after a diagnosis of ESRD, you qualify for Medicare Part A and Part B coverage immediately after you’ve been approved for disability benefits if you do dialysis at home or have been hospitalized in preparation for a kidney transplant. If you have dialysis as an inpatient or outpatient, your coverage starts at the beginning of the fourth month of treatment.
  • If you file for SSDI benefits after being diagnosed with ALS, you must wait the usual four months after approval for Medicare Part A and Part B coverage to begin.

IV. Qualifying for Other Medicare Components Before Age 65

f you’re eligible for Medicare Part A and Part B coverage before age 65, it’s possible to enroll in some of the program’s other components:

Medicare Advantage Plans

If you’re eligible for Medicare due to a disability or an ALS diagnosis, you can apply for a Medicare Advantage plan or possibly qualify for a Special Needs Advantage plan as an alternative to Part A and Part B coverage. You can sign up for a Medicare Advantage plan during the initial enrollment period (IEP). There are two additional opportunities to enroll each year: the annual election period from October 1 through December 7 and Medicare’s open enrollment period from January 1 through March 31.

Medicare Part D

You can enroll in a Medicare Part D prescription medication plan regardless of your age and may do so either during your IEP or Medicare’s annual election period. Unless you’re currently enrolled in a prescription medication plan with another insurer, you need to enroll during your IEP to avoid a 1% premium penalty for each month you’re without coverage.

Medicare Supplement or Medigap Plans

Depending on where you live, insurance companies that offer Medicare Supplement – or Medigap – plans may not be required to sell you a policy if you’re younger than age 65 and enrolled in Medicare due to a disability or illness. If your state requires that they must, you may pay significantly more for coverage because of your medical condition.