Medicare is the government medical insurance plan for older Americans and people with certain disabilities. As of 2020, more than 61-million Americans rely on Medicare for their primary health insurance needs. By the year 2032, this number will swell to over 80-million people.
In this MedicareWire.com article, we’ll explain when Medicare starts for most people and when it starts if you have Social Security Disability Insurance (SSDI).
At What Age Does Medicare Start?
While there are exceptions, in general, adults become eligible for Medicare on their 65th birthday. In fact, more than 11,000 people turn age 65 daily and get their eligibility for coverage. This is often a source of confusion because originally you got your Medicare and Social Security retirement benefits at the same time (i.e., retirement age).
Medicare is also available to adults with Social Security disability benefits. If you qualify for Social Security Disability Insurance (SSDI), your Medicare benefits start on the 25th month of your Social Security benefits.
Medicare Health Plans
Medicare is actually a set of insurance options that people can choose from once they are eligible. Medicare Part A and Part B are known as Original Medicare. About 38-million Americans choose this option.
You can also choose from a variety of private insurance company plans known as Medicare Advantage plans (see them here), some of which have no additional monthly premiums. Nearly 24-million Americans take this private Medicare coverage, including many people who qualify for both Medicare and Medicaid.
For prescription drug coverage, there’s Medicare Part D (on this page), which is bundled into many Medicare Advantage plans.
Exceptions To The 65 and Older Rule
For people who received SSDI for Amyotrophic Lateral Sclerosis (ALS), commonly known as Lou Gehrig’s disease, Medicare starts automatically in the first month they receive their SSDI benefit. These beneficiaries do not need to wait 24 months. Additionally, patients with late-stage renal failure may not need to wait for 24 months either. Those with End-Stage Renal Disease who have had a transplant or receive dialysis treatments would need to be on SSDI to qualify for Medicare.
Additionally, retired railroad workers also qualify for Medicare. This program works a little differently, but the end result is that they are insured through Medicare. The Railroad Retirement Board is who would process your application as opposed to the Social Security office. If you already receive RRB checks, you would be automatically enrolled in Medicare when you turn 65. If you do not receive checks yet when you turn 65, you can apply for Medicare directly through the RRB office.
How Much Does Medicare Cost?
One of the biggest misunderstandings about the Medicare program is its costs. It is not free and it does not cover everything.
All Medicare beneficiaries pay a monthly premium for their medical coverage (Medicare Part B). The premium is based on your annual income. High-income earners pay a little more than those with a lower income. For 2021, the basic Part B monthly premium is $148.50. For high-income earners, the rate is between $245 and $368 per month.
Some Medicare Advantage plans do not have an additional monthly premium but, you must continue paying your Medicare Part B premium. When a Medicare Advantage plan has a $0 premium it simply means that what you pay for your Medicare Part B each month covers the full cost of the private insurance plan.
Medicare Part A is hospital insurance and is available at no cost (aka, premium-free Part A) to people who worked (and their spouses) and paid Medicare taxes for ten or more years. If you did not pay Medicare taxes for a full ten years (40 quarters), you must pay a monthly premium for your Medicare Part A benefits. The amount you pay is based on the number of quarters you paid Medicare taxes. The more you paid in the past, the less you’ll pay for your premiums.
Does It Cover 100% Of All Healthcare Costs?
Since its inception, Medicare health insurance covers about 80 percent of all major medical costs. Medicare beneficiaries are responsible for the remaining 20 percent. Both Original Medicare and Medicare Advantage are designed to be this way.
A simple doctor visit might only require a $20 to $40 coinsurance or copay, but more complicated healthcare services can cost beneficiaries hundreds or even thousands of dollars out of pocket. The big difference between Original Medicare and Medicare Advantage is that Medicare Advantage plans have an annual cap called the maximum out-of-pocket (MOOP) limit, whereas Original Medicare has no limits.
Imagine needing cancer treatment, which can cost upwards of $2 million. With Original Medicare and no additional coverage, you would be responsible to cover upwards of $400,000 out of pocket. To insure against these costs, people often buy supplemental insurance called Medigap (learn more here).
If you’re thinking that a Medicare Advantage plan will help you avoid this issue, you’re partially right. However, most low-cost Medicare Advantage plans have a high MOOP. Some as high as $7,550 per year. That’s a lot of money to pull out of your pocket, and it does not include the monthly premiums or the cost of your medications. Read Why Medicare Advantage Plans are Bad.
Do I Need To Enroll?
When you turn 65, you need to enroll unless you already receive SSDI payments. You can enroll online, over the phone, or at your local Social Security office. At age 65 you receive an individual enrollment period (IEP) that affords you special rights. This includes the right to enroll in a Medicare Advantage plan, a Medicare Part D plan, and a Medigap plan.
Your Medigap guaranteed-issue right is very important, particularly if you have one or more chronic health conditions. This right allows you to buy any Medicare supplement insurance you choose without going through medical underwriting. You can’t be turned down, and you cannot be canceled, so long as you continue to pay your premiums.
After your IEP, you will have the opportunity to change your health plan elections during Medicare’s Annual Election Period (AEP). This open enrollment period starts on 15 October and ends on 7 December. AEP is only for Medicare Advantage and prescription drug plans (Part D). If you have a Medicare supplement, you can change plans any time you want, but you may be required to answer medical questions.
There are also some situations where Medicare will give you a Special Enrollment Period (SEP). This happens most frequently if you move, no longer have employer benefits, or the plan you have is no longer available.
Is Medicare Automatic?
Enrollment in Medicare is automatic if you receive SSDI payments. It is not automatic once you turn 65 and are not on SSDI benefits. You need to enroll via phone, online, or in person at your local Social Security Administration office. It takes time to apply.
You have a 7-month Initial Enrollment Period to sign up for Part A and/or Part B when you are first eligible. If you are eligible for Medicare at age 65, you can sign up during the 7-month period that:
- Begins 3 months before the month you turn 65
- Includes the month you turn 65
- Ends 3 months after the month you turn 65
NOTE: If you wait until the month you turn 65 (or the 3 months after you turn 65) to enroll, your Part B coverage will be delayed. This could cause a gap in your coverage.
How Do I Enroll In Medicare?
Once you turn 65, gather the required documents needed to enroll. This will include proof of citizenship or residency. You may need your birth certificate, passport, vaccination records, medical records, or other documentation to verify your date of birth and your citizenship. Additionally, you’ll need proof of income, a Social Security number, your spouse’s information, and more. You can enroll in Medicare online, over the phone, or at a Social Security Administration office. You do not need an insurance agent to enroll.
What Happens If I Don’t Enroll On Time?
In nearly all cases, if you do not enroll in Medicare Part B when you are first eligible, you’ll have to pay a late enrollment penalty. You’ll have to pay this Medicare penalty for as long as you have Part B and have a gap in your health coverage. Go to www.Medicare.gov to learn all the details.
Need Help Enrolling In A Medicare Health Plan?
Call 1-855-266-4865 and speak with a licensed HealthPlanOne insurance agent. There’s no obligation, and they offer more plan options than any other national agency.
Citations & References
- Part A & Part B sign up periods | Medicare
- Your Medicare card | Medicare
- Contact Social Security | SSA
- Medicare Benefits | SSA
- The United States Social Security Administration
- CMS 40B | CMS