Medicare open enrollment is approaching. Here’s what you need to know

If you are approaching age 65, you should start reviewing your Medicare options even if you don’t plan to retire right away. Knowing what Medicare coverage is, when to enroll and what options are available for additional coverage is essential to getting the health insurance you need going forward.

What is Medicare?

Medicare is health insurance available through the federal government. To qualify for it, you must meet one of the following requirements:

Medicare embodies three parts to offer comprehensive health care coverage.

Part A, hospital insurance

This provides coverage for stays in the hospital or a skilled nursing facility, as well as hospice care and even some home health care services. If you or your spouse worked and paid Medicare taxes for a minimum of 10 years, there is no premium for Part A. If you or your spouse paid Medicare taxes for less than 30 quarters, the premium for Part A is $506 for 2023. If you or your spouse paid Medicare taxes for 30 to 39 quarters, the premium for Part A is $278 for 2023. Anyone who qualifies for Medicare before age 65 will not have to pay a premium for Part A.

The deductible for Part A coverage is $1,600 for each benefit period before Original Medicare (Parts A and B) coverage kicks in. A benefit period begins the day you’re admitted to a hospital or skilled nursing facility as an inpatient and ends when you go 60 straight days without receiving any inpatient hospital or skilled nursing facility care. Therefore, you could have more than one benefit period in a year.

If you are in the hospital for more than 60 days or a skilled nursing facility for more than 20 days, you will have a copayment. If you are in the hospital for more than 150 days or a skilled nursing facility for more than 100 days, you are responsible for all costs.

Part B, medical insurance

This covers qualifying doctors’ visits, preventive services, medical supplies, and outpatient treatment and services. Everyone pays a premium for Part B coverage. The standard premium for 2023 is $164.90. However, if your modified adjusted gross income was more than $97,000 for an individual or $194,000 filing jointly on your tax return two years before enrolling in Medicare, your monthly premium will be higher.

The deductible for Part B is $226 per year. You may have to pay co-insurance of 20% of the Medicare-approved amount for certain services, such as for a wheelchair, outpatient mental health care or outpatient hospital care.

Part D, prescription drug plans

This pays toward the cost of prescription drugs as well as many recommended vaccines or shots. Prescription plans must be purchased separately for people with Original Medicare. The costs — including premiums, deductibles, copayments and coinsurance — vary by plan. For people with Medicare Advantage plans, prescription drug coverage may be included.

When do I enroll?

Enrollment in Medicare plans is available during specific time periods. It’s important to know when these enrollment periods are so you don’t incur a penalty for not enrolling when you become eligible for Medicare.

When you turn 65: Most people know they can get Medicare coverage when they turn 65. However, you can sign up for Medicare coverage before you turn 65 in what is referred to as the Initial Enrollment Period. This starts three months before you turn 65 and ends three months after the month you turn 65.

For example, if you turn 65 on May 15, you can sign up for Medicare as early as February or as late as August. However, if your birthday is on the first of the month, you can sign up between four months before your 65th birthday and two months after you turn 65.

The coverage start date depends on when you sign up, but will always begin on the first of the month.

It’s important to note that if you do not sign up for Medicare during your initial enrollment period or a special enrollment period, you may have to pay a penalty.

When you retire after 65: If you are still working at age 65 and have insurance through your or your spouse’s employer, you likely should sign up for Medicare Part A when you become eligible at age 65. If you or your spouse have paid Medicare taxes for 10 years or more, the premiums will be free. This will ensure you won’t pay a penalty for enrolling after your initial enrollment period ends.

Once you no longer have insurance through your or your spouse’s employer, you can sign up for Part B coverage without penalty as long as you enroll within eight months after you or your spouse stop working.

Under 65 and on disability: If you have a disability and receive monthly Social Security or Railroad Retirement Board benefits, you become eligible for Medicare Part A after 24 months. For disabled federal, state and local government employees who don’t qualify for Society Security or RRB benefits, they could become eligible for Medicare Part A after 29 months. There is no waiting period for people diagnosed with amyotrophic lateral sclerosis, also known as Lou Gehrig’s disease.

Medicare Advantage vs. Medicare supplement plan

Offered through private companies, Medicare Advantage plans combine Part A and Part B into one plan. They may or may not include a drug plan (Part D). Premiums, deductibles, copayments and coinsurance costs will vary by plan. While Medicare Advantage plans must offer the same coverage as Original Medicare (except hospice care, which is covered under Original Medicare even for those with an Advantage plan), they actually may offer additional coverage such as vision and dental coverage.

A Medicare supplement plan, called Medigap, is a private insurance plan for those enrolled in Original Medicare. It helps cover expenses not covered by Original Medicare, such as deductibles and copayments. This does not cover prescription drugs. Premiums vary based on the plan. You cannot get a Medigap plan if you are enrolled in a Medicare Advantage plan.

Enrolling in Medicare health coverage is an invaluable way to pay for the medical care you need as you get older. To ensure you get the best Medicare coverage for you, start researching all your options before you turn 65, so you are prepared to enroll once your initial period starts. The best place to start is medicare.gov.