What Is Medicare, and Who’s Eligible for It?
Your 65th birthday once seemed far off on the horizon, but now it’s knocking at your front door. Lately, your daydreams drift toward retirement: living life by your own calendar, maybe some travel, volunteer work, cooking classes, Medicare. …
Medicare? Buzzkill alert!
There’s no escaping the reality, though, that planning for retirement also means planning for how you’ll pay for health care. You need to learn the basics of Medicare, a program many people don’t really think about until it’s time to sign up.
What Is Medicare?
Medicare is the federal health insurance program that Americans qualify for if they’re 65 or older or have certain disabilities. The program was signed into law in 1965. Today, it covers about 63.1 million Americans.
Medicare is run by the U.S. Centers for Medicare and Medicaid Services agency. It’s not the same as Medicaid, which is an assistance program that serves low-income people of every age.
The coverage works something like insurance you get through your job. You may have to pay deductibles, coinsurance, and sometimes copays. For most types of Medicare coverage, you also pay monthly premiums. (Most people don’t pay premiums for hospital coverage, called Part A.)
But you enjoy advantages under Medicare that you don’t with private insurance. Yes, Medicare premiums rise as your income does. But they’re still generally more affordable than with an employer’s plan.
Who Qualifies for Medicare?
Let’s say your 65th birthday is fast approaching. You and your spouse have had Medicare taxes deducted from your paychecks, or paid them directly to the government, for at least 10 years. Here’s how you can join Medicare and get no-premium Part A hospital insurance:
- If you get payments from Social Security or the federal Railroad Retirement Board (RRB) for at least 4 months before you turn 65, you don’t need to enroll. You automatically get Part A, plus Part B medical insurance, starting the first day of your birthday month. (For example, it would start on Dec. 1 if your birthday is Dec. 30). Once your Medicare card arrives in the mail, you’re all set.
- If you’re not getting Social Security or RRB benefits, you need to register for Medicare with the Social Security Administration. The 7-month initial enrollment period starts 3 months before your 65th birthday month and ends 3 months after.
If you don’t qualify for no-premium hospital insurance, you can buy Part A coverage for a monthly premium. In 2021, the premium was either $259 or $471, depending on how long you paid Medicare taxes.
Also, some people can start Medicare well before they turn 65 — for example, if you:
- Have gotten Social Security Disability Income (SSDI) payments, or certain RRB disability payments, for at least 24 months. “If you get those payments, you automatically are enrolled in Medicare,” says Casey Schwarz, JD, senior counsel of education & federal policy at the Medicare Rights Center. Look for your Medicare card in the mail 3 months before your 25th month of disability payments.
- Have amyotrophic lateral sclerosis (also called ALS or Lou Gehrig’s disease) and have applied for SSDI. You’re automatically enrolled in Parts A and B, and you will get your Medicare card the month your disability benefits start.
- Have end-stage kidney (renal) disease. You can choose to enroll in Medicare to cover some dialysis or kidney transplant services. “Your doctor’s office usually helps you enroll, which makes the paperwork a lot easier on you,” Schwarz says.