We get a lot of calls from people who are close to turning 65 (or are already 65), asking what they need to do to get set up with Medicare. With so many options available to Medicare beneficiaries, it can be overwhelming but once you understand your basic choices, it gets much easier.

What happens when I’m first eligible for Medicare?

If you get Social Security Administration (SSA) or Railroad Retirement Board (RRB) benefits, the government will automatically enroll you in Original Medicare when you turn 65. Your Medicare benefits usually start on the first day of your birthday month. If you qualify by disability, you’re typically enrolled in Medicare when you reach the 25th month in a row of collecting disability benefits. If you have Lou Gehrig’s disease (amyotrophic lateral sclerosis, or ALS), your Medicare benefits start the same month that your disability benefits begin. If you’re automatically enrolled, you’ll get your Medicare card in the mail about three months before you’re eligible for the program.

In some cases, you may have to enroll in Medicare manually; for example, if you have been diagnosed with end-stage renal disease (ESRD), or if you’re still working and don’t yet receive SSA or RRB benefits. There may be other cases where you have to enroll manually. To enroll, you can do any of the following:

  • Visit the Social Security website.
  • Call the SSA Monday through Friday between 7AM and 7PM at 1-800-772-1213 (TTY users, call 1-800-325-0778).
  • Go to your local SSA office.
  • If you get Railroad Retirement Board benefits, call the RRB Monday through Friday between 9am and 3:30 PM at 1-877-772-5772 (TTY users, call 1-312-751-4701).

What’s Original Medicare?

Original Medicare refers to Medicare Part A (hospital insurance) and Medicare Part B (medical insurance).

Medicare Part A helps cover inpatient hospital care, skilled nursing facility care, hospice care, and certain limited home health care and nursing home care (usually for a limited time). You get Part A benefits premium-free if you qualify by working at least 10 years (or 40 quarters) while paying Medicare taxes. There is a Medicare Part A deductible ($1,408 in 2020 for each benefit period) that you must meet before Medicare pays any benefits. Beyond the deductible, you pay no coinsurance for the first 60 days of an inpatient hospital stay, but you do pay coinsurance for hospital stays of 61 days or longer. In 2020 you pay $352 coinsurance per day for days 61 through 90 and for day 91 and beyond you pay $704 per each lifetime reserve day.

Medicare Part B helps cover a wide range of medical services, screenings, medically necessary durable medical equipment, and supplies. You need to meet your annual Medicare Part B deductible ($198 in 2020) before Medicare begins to cover costs. Thereafter, you generally pay 20% of the Medicare-approved cost of the service or item. In some cases, Medicare providers can bill more than what Medicare approves under Part B; this is called a Part B excess charge. Some services are covered 100%, such as flu shots and diabetes screenings, if they’re delivered by Medicare-assigned providers. This is not a complete list of services.

Medicare Part B comes with a monthly premium, and the amount you pay may vary depending on your situation. Here’s how it works:

Most Medicare beneficiaries who have their premiums deducted from their Social Security benefits and who signed up for Part B before 2020 pay an average of $144.60 for the Part B premium.

If you’re a dual eligible (you have both Medicare and Medicaid), and Medicaid pays for your premiums, your Part B premium is $144.60 in 2020 but Medicaid pays for it if you qualify.

You may pay a higher Part B Premium if the adjusted gross income from your tax return two years ago is above a certain amount. Your monthly premium could also be higher if you didn’t sign up for Part B when you were first eligible; you may owe a late enrollment penalty if you enroll later on.

Low-income beneficiaries might qualify for help with their premiums through the Medicare Savings Programs. On the other end of the scale, as mentioned, high-income Medicare beneficiaries might have to pay higher premiums.

For more information on Medicare costs, see 2020 Medicare Prices and Out-of-Pocket Costs.

It’s important to note that prescription drug coverage is not included with Original Medicare (outside of inpatient hospital care and certain outpatient care).

What do I need to do now that I have Medicare?

Being enrolled in Original Medicare is an important first step. The next step is to understand what coverage options are available to you. If you want to make any changes to your Medicare coverage, it’s often a good idea to make those changes early on, around the time when you’re first eligible for Medicare. I’ll explain the Medicare enrollment and election periods, but first I want to make sure you know what your choices may be.

What if I stay with Original Medicare?

Once you’re enrolled in Medicare Part A and Part B, you can do nothing and still have basic coverage. But because Original Medicare doesn’t cover your medications, it may be a good idea to sign up for a stand-alone Medicare Part D Prescription Drug Plan. These plans are sold by private insurance companies that contract with Medicare. Even if you don’t take medications now, you still might want to think about getting a Part D Prescription Drug Plan; the longer you go without this coverage, the higher a late enrollment penalty you may have to pay if later you do need Part D coverage months or years from now and go without Part D or creditable prescription drug coverage (i that is as good as Part D) for 63 days in a row or more.

Another option you have with Original Medicare is adding a Medicare Supplement Insurance (also called Medigap) plan to help pay Part A and Part B costs (such as copayments and coinsurance). There are 10 standardized Medigap plans in most states, and each plan covers a different combination or percentage of Original Medicare costs; but because they’re standardized, coverage is the same for plans of a given name. For example, if you buy a Medigap Plan N in Oklahoma, the coverage is the same as a Medigap Plan N in Hawaii. Three states have their own standardized plans: Massachusetts, Minnesota, and Wisconsin.

Medicare Part D insurance and Medicare Supplement insurance are optional and separate from Original Medicare, but both are offered by private insurance companies and both work alongside your Original Medicare coverage. Premiums and other costs may vary, as will availability.

What if I enroll in Medicare Advantage?

You can get your Medicare Advantage benefits through a private insurance company that contracts with Medicare, instead of through the government, by getting a Medicare Advantage plan (also called Medicare Part C). A Medicare Advantage plan must provide all of the benefits you get under Medicare Part A and Part B (except hospice care, which remains covered by Original Medicare even if you have a Medicare Advantage plan). Many Medicare Advantage plans include prescription drug benefits, and some offer wellness programs, dental services, vision care, and/or other benefits. If you sign up for a Medicare Advantage Prescription Drug plan, you can get all your Medicare benefits in one plan. You still need to pay your Medicare Part B premium, as well as any premium the Medicare Advantage plan may charge.

There are several different types of Medicare Advantage plans that may be available in your area. Again, the availability and prices of these plans may vary depending on your location, the coverage you choose, and the insurance company you buy it from.

When’s the best time to sign up?

There are several different enrollment or election periods for the various types of Medicare coverage. Here’s a brief rundown on these periods:

  • Original Medicare
    • Your Initial Enrollment Period (IEP) is a seven-month period starting three months before your month of eligibility, including the month in which you become eligible, and ending three months after your month of eligibility. The “month of eligibility,” or the first month you become eligible for Medicare, is typically the month you turn 65. You may be automatically enrolled during this time. If you don’t get enrolled automatically, this Initial Enrollment Period is typically when you need to sign up to avoid late enrollment penalties. You can add a stand-alone Medicare Part D Prescription Drug Plan during this time as soon as you’re enrolled in Original Medicare Part A or B.
    • If you don’t sign up for Medicare Part A and Part B when you’re first eligible, you can enroll during the General Enrollment Period, which occurs from January 1 to March 31 every year.
    • In some situations, you may also qualify for a Special Enrollment Period to enroll in Medicare Part A and Part B.
  • Medicare Advantage and Medicare Prescription Drug Plans
    • For enrolling in Medicare Advantage, your Initial Coverage Election Period is usually the same as your IEP. Some beneficiaries delay Medicare Part B enrollment (if they’re still covered by an employer’s plan, for example); in that case, this enrollment window is the three-month period before your Medicare Part B start date.
    • The Annual Election Period occurs from October 15 through December 7 of every year, and is a time when you can enroll or change your Medicare Advantage or Medicare Part D Prescription Drug Plan, drop Medicare Advantage and go back to Original Medicare, or drop out of Medicare Part D altogether (if you don’t need prescription drug coverage any longer).
    • In some cases, you may qualify for a Special Election Period. The details of your Medicare Special Election Period will vary, depending on the situation and how you qualify.
  • Medigap plans
    • The Medigap Open Enrollment Period is a six-month timespan that starts on the first day of the month when you’re both 65 or older and enrolled in Medicare Part B.

As you can see, you can usually sign up for the coverage option(s) you prefer right after you’re enrolled in Medicare Part A and Part B during an election period. You need both Part A and Part B of Original Medicare to qualify for a Medicare Advantage or Medigap plan, and you need at least one of them (Medicare Part A or Part B) to sign up for a stand-alone Medicare Prescription Drug Plan.