When you find yourself quickly approaching 65 years young, you also find yourself reaching Medicare eligibility. With this milestone comes new learning curves, such as learning about Medicare and what the federal healthcare program offers. You might find yourself searching the web for Medicare for Dummies.
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Thankfully, a Medicare for Dummies book won’t be necessary. We have everything you need to know right here. Below we’ll go over what Medicare is, the different parts, and the best timeframes for enrollment.
Medicare for Dummies
Medicare is health insurance for individuals 65 years or older, specific individuals with disabilities, and those with End-Stage Renal Disease. If you qualify for Medicare, here are some fundamentals of the different coverage types to understand when starting this new journey.
Chapter 1: The Four Parts of Medicare
There are several types of Medicare coverage you should familiarize yourself with before you enroll. The first chapter of our Medicare for Dummies guide will review the four parts of Medicare.
- Medicare Part A: Your hospital coverage through Medicare. It covers your stay in the hospital, a nursing facility, or any inpatient care.
- Medicare Part B: Your outpatient medical coverage. Benefits include physician visits, labs, surgeries, and durable medical equipment.
- Medicare Part C: A Medicare Advantage plan. These plans, through private insurance companies, combine Original Medicare benefits with additional benefits. You will be responsible for copays for approved services and/or hospital and physician visits.
- Medicare Part D: Prescription drug coverage. These are your pharmacy benefits, which you purchase through a private insurance company if you do not have a Medicare Advantage plan. Thus, Medicare Part D pairs with Original Medicare (Parts A and B). Prescriptions can be pricey, so this coverage is beneficial.
Now that you are familiar with the parts of Medicare, we will let you know how to enroll in these benefits.
Chapter 2: Medicare Enrollment Periods You Need to Know
Medicare enrollment periods are when you can sign up for the various parts of Medicare. Below, we’ll discuss some of the most important Medicare Enrollment Periods.
- Initial Enrollment Period: – Lasts for seven months. Begins three months before you turn 65 and lasts up to three months after your date of birth.
- Special Enrollment Period: Occurs due to qualifying life events. The most common reason is if you are over 65 and terminate private insurance through your or your spouse’s employer with 20 or more employees. In this case (and others), you will receive a Special Enrollment Period for Medicare.
- General Enrollment Period: If you fail to apply for Medicare during your Initial Enrollment Period or Special Enrollment Period, this will allow you to still sign up for Medicare. This enrollment period begins on January 1 and runs through March 31.
- Automatic Enrollment: You may automatically enroll in Part A and Part B at 65 if you begin to receive retirement benefits from either the Railroad Retirement Board or Social Security.
Enrolling in a Medicare enrollment period is essential to avoid late enrollment penalties. You should never pay more for your healthcare coverage due to a lack of information. Therefore, we are dedicated to helping you understand each step of Medicare enrollment.
Chapter 3: Original Medicare Breakdown
Medicare Part A will cover the first 60 days in a hospital. You will be responsible for a hospital deductible. Once you have met 60 days consecutively in the hospital, Medicare’s share will begin diminishing, while your share will increase. We recommend Medicare Supplement plans to help safeguard you from these increasing costs.
Medicare Part B covers outpatient care while visiting your doctor’s office. You must meet an annual deductible, after which Medicare Part B covers 80% of costs. Again, investing in a Medicare Supplement (Medigap) plan can help safeguard you from high out-of-pocket expenses associated with the remaining 20% for which you are responsible.
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Chapter 4: Original Medicare Cost Breakdown for Dummies
When breaking down the costs of Medicare, you must be aware that the Medicare Part B premium depends on an individual’s income. Most Medicare beneficiaries will pay the standard premium, while those in a higher income tier will pay an increased cost.
Social Security will review your tax return from two years earlier when determining one’s income adjustment.
If your income is now lower, you may file a reconsideration request. Social Security will require proof of income and reconsider your premium costs.
For most, Medicare Part A has no monthly premium if you meet the requirements. You must work ten years (40 quarters) paying Medicare taxes to receive zero-premium Medicare Part A. If you do not meet this requirement, you could pay up to $505 for Medicare Part A each month in 2024, a slight decrease from the $506 enrollees faced throughout 2023.
In addition to their premiums, Medicare Part A has a deductible and copayments, while Medicare Part B has a deductible. If you have a Medigap plan, your Medicare Part A costs and Part B deductible may be covered up to 100%.
Also, remember that Medicare Part B only covers 80% of your medical costs. If you do not have a Medicare Supplement plan, you must pay the remaining 20% out-of-pocket.
Chapter 5: Medicare Part D Cost Breakdown for Dummies
When breaking down the costs for Medicare Part D, it is good to know that most states have many prescription drug plan options to choose from through private insurance companies. The average premium price is around $31.50 per month.
When selecting a Medicare Part D plan, choose one that fits your medication needs and that the prices will work for you.
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The insurance carriers will set your Medicare Part D premiums. However, Social Security can deduct the cost of your premium directly from your Social Security income benefits.
Now that you know what Medicare is and the right time to apply, we can move on to chapter 6 of Medicare for Dummies.
Chapter 6: Medicare Supplemental Coverage for Dummies
Again, supplemental coverage can be a huge lifesaver if you are in a flurry of hospital and physician charges. Below are the two main types of policy you can buy through a private insurance company once you have Original Medicare.
- Medicare Supplement (Medigap) Plans: These policies are secondary coverage that pay after Original Medicare pays. They will cover your 20% patient responsibility for your outpatient services. These supplemental plans will also cover additional out-of-pocket costs such as deductibles & copays.
- Medicare Advantage Plans: This is Medicare Part C, as introduced above. Rather than paying after Medicare, a Medicare Advantage plan pays your claims in place of Original Medicare. Medicare Advantage is private insurance that comes with a network of providers. You will be responsible for copays for physician visits, facility stays, etc. These policies usually include benefits that Original Medicare and Medicare Supplement plans do not.
While Medicare can seem tricky to decipher at first, trust in knowing that your understanding of the basics will make for a much smoother enrollment for you. With this knowledge, you can be on your way to smooth sailing into Medicare coverage!
Medicare for Dummies FAQs
How to Understand Medicare for Dummies
For more information regarding Original Medicare coverage, we can help. You can call our Medicare benefits helpline at the number above. Our services are 100% free to you. Our agents and client care team are here to help you navigate the Medicare maze. You can also compare rates using our online form here.
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Sources:
MedicareFAQ is dedicated to providing you with authentic and trustworthy Medicare information. We have strict sourcing guidelines and work diligently to serve our readers with accurate and up-to-date content.
- Medicare Program - General Information, CMS . Accessed August 2022.
https://www.cms.gov/about-cms/what-we-do/medicare - What Medicare Covers, Medicare. Accessed August 2022.
https://www.medicare.gov/what-medicare-covers - An Overview of Medicare, KFF. Accessed August 2022.
https://www.kff.org/medicare/issue-brief/an-overview-of-medicare/ - 2024 Medicare Parts A & B Premiums and Deductibles, CMS. Accessed October 2023.
https://www.cms.gov/newsroom/fact-sheets/2024-medicare-parts-b-premiums-and-deductibles
Thank you so much for publishing this great information!
I Turn 65 in October and have always heard you have to enroll in Medicare 6 months prior to turning 65 or you will have penalties. Do I need to enroll now? I still plan to work 1-2 more years, so is enrolling at this point even necessary? Also if I lose my job between now and the planned time of retiring is that considered special circumstances and can I enroll at that time?
Deborah, thank you for reaching out! When initially enrolling in Medicare, you can do so UP TO 3 months prior to your 65th birthday. So, since your birthday is in October, your initial enrollment period will begin on July 1, 2022. However, if you plan to continue working and are covered by a creditable insurance plan, you can delay Medicare coverage until you retire or lose the creditable health coverage. To know if your coverage is creditable for Medicare, I recommend speaking with your benefits coordinator.
Hello! I am trying to assist my 71 year old dad with his Medicare coverage during open enrollment. I know Plan A is a must, but what about the VA? As a veteran, does it make less sense to sign up for certain Medicare options?
Hi Mollie – it is beneficial for your father to sign up for Medicare as well as keep his VA benefits. VA coverage is only accepted at VA facilities and Medicare is accepted at civilian facilities. Thus, the combination will provide him with more complete coverage.
Hi Lindsay, Am I understanding pre-existing conditions correctly?
– It’s my understanding that Marketplace plans CANNOT consider pre-existing conditions during enrollment/application and while quoting premiums,.
– But in Medicare for Dummies, I’m reading that the Advantage and Medigap plans CAN AND DO consider pre-existing conditions during enrollment/application and while quoting premiums. Do I have that right?
Hi Susan! This is correct. There are no health questions for Part A & Part B. Once you enroll in Part B, you’re given an enrollment window to sign up for either Medicare Advantage or Medigap without having to answer health questions. Once this time frame has passed, you will have to answer health questions to enroll. The fall enrollment period is for Medicare Advantage & Part D beneficiaries to make changes, but it does not give them guaranteed issue. They will still have to go through medical underwriting. You can enroll in a Medigap plan at any time of the year. If you’re outside your Medigap open enrollment window, you will have to go through medical underwriting.
I will be turning 65 on Oct. 1 of this year. I am living on SS + I do freelance work which amounts to approx. $400 a week. I currently have medical coverage thru Covered CA. I take three prescriptions. Other than preventative, my medical concerns for the future would possibly be surgery to correct some problem, dental work and like everyone, the unexpected cancer. I do not have concerns about vision or care which doctor I go to. I’d like to construct a Medicare plan with the most coverage and as little out of pocket cost as possible.
Hi Jeffrey! We can for sure help you with that. Give us a call so we can see what Medicare options are available in California to get you the most coverage with the least amount out of pocket.
I am only 63, but currently have my husband and stepdaughter on my insurance. My husband and I are bother retired. I will turn 65 six months before my husband, and my stepdaughter will only be 22. What do we do about his insurance for six months, and her insurance? They are both on my companies insurance that I retired from.
Hi Mary! Your husband will need to get his own insurance until he reaches 65 so he has no gaps in coverage. Your daughter will also need to get her own insurance once she is no longer on your employers’ plan. Your best option is the Marketplace. Unless your daughter has been on disability for at least 24 months, she won’t be eligible for Medicare.
Hi Lindsay!
I hope you can help me. My 9 yo daughter has been approved for Medicare (due to disability). I currently have her on my healthcare through my employer; can she remain enrolled in my employer healthcare even though she is now covered by Medicare (Parts A & B)? Does it make a difference that my healthcare is a high deductible plan with a health savings account? I would obviously like to keep her enrolled in my plan if possible so I am not faced with footing the bill for that 20% portion Medicare does not cover. Many thanks in advance for sharing your insight!
Hi Carla! You can keep your daughter on your employer insurance as well as Medicare Part A & Part B.
My wife, age 61 receiving disability is eligible for Medicare. We have coverage through my employment. Do we need to sign her up for Part B? The enrollment pamphlet says we may face penalties if we wait. Why is this so unclear and is there actually someone to contact that isn’t just trying to sell insurance?
Hi Joe! As long as your employer coverage is creditable, then your wife can delay enrolling into Part B. To be considered creditable, your employer must have more than 20 employees. If your employer has less than 20 employees then your wife would need to sign up for Part B now to avoid late enrollment penalties.
Good afternoon,
I will be turning 65 this July. I am employed and have health insurance through my employer. Yes, they employ over 20 employees. I plan on retiring next year. Can I wait until then to apply for medicare without being penalized?
Hi Denise! Yes, you can wait to delay enrollment since you have creditable coverage without being penalized. Since Part-A is premium-free, it makes sense to enroll now. You can apply for Part B when you retire and leave your group coverage.
I did not sign up for part B at age 65, but got Part A. I kept my BC/BS policy that I had while working for the federal govt. I’m now going to sign up for part B and was told that I had a 10% per year penalty to pay forever. Is that correct?.
If you kept your federal benefits after retirement and delayed Part B, you will be responsible for the 10% Medicare part B penalty.
Hi Dave! Yes, the Part B premium does significantly increase if you’re a higher income earner. Unfortunately, it does hold true even if you go with a private Medicare Advantage plan since you still have to have Part B to enroll in one of these plans. There is a 12-month trial period for Medicare Advantage that gives you a Special Election Period to drop the plan and go back to Orginal Medicare and enroll in a Medigap plan. However, if you’re overall healthy, you should have no problem dropping your Medicare Advantage plan to enroll in a Medigap plan later, but you will have to answer health questions. Medigap plans have a once in a lifetime Open Enrollment Period that ends 6 months after your Part B becomes active. During this time frame, you can enroll in a Medigap plan without answering health questions. Outside this time frame, you could be denied coverage due to pre-existing conditions. Basically, it’s a risk to enroll in a Medicare Advantage plan because if you do get sick laterand need better coverage, you may not be able to get it since you’re outside your Open Enrollment Period.
I know you have to enroll in Medicare even though I dread it. I have zero prescriptions, no pre-existing conditions and no health problems. What is the least complicated, least expensive plan I can get away with? Thanks!
Hi Phyllis! I love these questions. You don’t have to enroll, Medicare is not Mandatory. However, you can incur penalties when you enroll later that will stick with you the rest of your life if you don’t have other creditable coverage. In addition, you could be denied a supplemental plan if, at the time you enroll, you do have a pre-existing condition. Just like all other insurance, you enroll before you need it, not after. Part A is your hospital coverage and is premium-free for most. So, it makes sense to enroll in at least Part A. Then, Part B is your doctor coverage. The current premium is around $145 but can change annually. Then for your prescription coverage, you will want Part D. You can choose to not have any prescription coverage, but you will incur a 1% penalty for each month you don’t enroll. The least expensive plan will come with the least amount of benefits. You could go with just Part A and Part B and not have any drug coverage. You’ll be responsible for out-of-pocket costs including deductibles and the 20% coinsurance for all outpatient services. If you want that covered, you would need to enroll in a Medigap plan. Ideally, having Part A, Part B, Part D, plus Medigap will get you the most comprehensive coverage, but won’t be the least expensive. If you rather have low or zero-dollar premiums and payout of pocket for services as you use them, you could leave Original Medicare and enroll in a Medicare Advantage plan. However, I would take a very close look at the differences between the two before you decide. You could always give us a call and speak to an agent. They can go over all the options in your area and explain this in further detail to help you decide on the best option for you.
if you have state medicaid should you get medicare advantage plan or medigap? I have 10 prescriptions at this moment and I need hearing aids?
Hi Thomas! No, you won’t need to get a supplemental plan. You’re Medicaid will act as your supplemental coverage since Medicare will pay first. You could get a dual eligible SNP if there is one in your area since some include additional benefits like hearing & vision, but not necessary. Let me know if you have any more questions!
If you’re eligible for Tricare for Life as a military retiree, is there any point in getting a Advantage Plan? Tricare will pay the 20% and has dental and vision plans. Thank you.
Hi Dave! If you choose to enroll in a Medicare Advantage plan, it will become your primary coverage and your TRICARE will become secondary. Your TRICARE will cover the copays left by your Medicare Advantage plan, leaving you will minimal out of pocket spending. In addition, your TFL includes drug coverage, so you can pick up an Advantage plan that doesn’t include drug coverage. This will more than likely give you a zero-dollar premium. The only thing to be cautious about is the network of doctors. Since the Advantage plan will become primary, you will be limited to only using the doctors within your plan’s network. When compared to TFL network of doctors, the Advantage network of doctors is significantly smaller. I hope this helps!
Is author and senior editor, Patricia Barry, no longer working for AARP? I wanted to ask her questions from Medicare for Dummies.
Hi Ernest! I don’t see anything published from Patricia Berry since 2016 from AARP. I would be happy to answer any questions you have if I can!