If you are about to hit your 65th birthday, there is a good chance that you are thinking about a lot of things: retirement, grandkids, traveling, or starting a garden. It is also possible that you are anticipating your eligibility for Medicare.

In general, Medicare eligibility is for individuals who are 65 and older. You can get Medicare before the age of 65 if you are disabled, suffering from ALS (also called Lou Gehrig’s disease), or End-Stage Renal Disease (ESRD), which encompasses kidney failure that is permanent and requires a transplant or dialysis.

You get free Medicare Part A as soon as you turn 65 and you are qualified for benefits from Social Security.

Medicare is a U.S. federally funded health insurance program allocating Part A (hospital benefits) and Part B (Medical benefits) to citizens 65 years or older or citizens with a disability. Original Medicare policies include Medicare Part A and Part B.

If you are still employed at the age of 65, which is increasingly happening in the U.S., and your employer has more than 20 workers and still has you covered under a group health plan, you need not enroll in Medicare at this time.

If you’re employed by a company that has less than 20 workers, you still have to enroll in Medicare Part A and Medicare Part B, which becomes your primary insurance. If you fail to enroll, your employer’s plan may pay nothing or pay less for your services when they find out.

Given that, you are better off enrolling in Medicare Part A on time, whether or not you already have health coverage. It doesn’t cost anything, and this way your secondary insurance is Medicare and they may even pay for anything your primary insurance (your work health insurance) doesn’t cover.

The exception to this rule is if you are paying into a health savings account, and you want to keep doing so. If you are enrolled in Medicare, you are not allowed to pay into a Health Savings Account, even if you continue to be covered by an employer’s Health Savings Account-qualified high-deductible health plan.

Even though when you turn 65 you don’t have to enroll in Medicare because you are covered by a qualified group health insurance, it may make sense if the plan you have through your employer isn’t heavily subsidized. Take the time to look at how much you are paying for your group health insurance and what your benefits are under your plan, and compare it to what you would pay if you enrolled in Medicare. Take into account the cost of all things from coinsurance, deductibles, copays, and premiums.

Remember that with Medicare’s comprehensive coverage, you still need to purchase a Medicare Part D plan to go along with your Medicare Parts A and B.

You may still think that enrolling in Medicare when you turn 65, financially speaking, signing up for Medicare makes the most sense, even if you can enroll during the special enrollment period later on.^[1]

Medicare has four parts:

1. Medicare Part A (Hospital Insurance)
2. Medicare Part B (Medicare Insurance)
3. Medicare Part C (Medicare Advantage Plans)
4. Medicare Part D (Drug Coverage)

Part A Premium

Most individuals usually don’t have to pay a Medicare Part A premium. That is why it is referred to sometimes as “premium-free Part A”. You do not have to pay a premium for Medicare Part A if you:

• Are already receiving disability benefits or retirement from the Railroad Retirement Board or Social Security.
• Get Medicare earlier than 65.
• If you are 65 or older and you or your spouse or former spouse qualify and while working you have paid Medicare taxes for at least 10 years.

^[1] Medicare Resources.org. (2022). Do I need to sign up for Medicare at 65 if I’m still working? https://www.medicareresources.org/faqs/do-i-need-to-sign-up-for-medicare-at-65-if-im-still-working/

• You may be able to purchase premium-free Part A if you do not qualify for it.

Part B Premium

Medicare Part B helps to cover medical services such as doctor’s visits, outpatient services, and other medical care services not covered in Medicare Part A. Medicare Part B is not mandatory. Part B covers medically necessary medical services and medically necessary items, such as safety equipment.

If you get any of the services covered by Medicare Part B each month, you still pay the premium. Each year the monthly premium may change to a higher amount depending on our income. Usually, no one pays a monthly bill because the Medicare Part B premium is deducted from your Social Security, a Civil Service Retirement check, or the Railroad Retirement Board.

If you don’t have your Medicare Part B premium deducted from any of the aforementioned methods, you will get a Medicare Part B premium bill in the mail and you can then pay them directly.

Medicare Advantage (Part C) Premium

Medicare Part C or Medicare Advantage plan costs vary based on your zip code or where you live. Part C monthly premiums can vary each year as they are based on the specific plan you join. The good news is that some of the Medicare Advantage plans have $0 monthly premiums and typically, the premiums you pay monthly are lower than what the payments are for Medicare Part B. However, you still have payments for your monthly Part B premium, although some Medicare Part C plans help you with that cost. With a Medicare Advantage plan in MN, you get coverage for Part A and Part B in addition to all of the other benefits that Original Medicare doesn’t give.

Medicare Part D Premium

Medicare Part D monthly premium coverage varies on the plan you join. It can change each year and you may have to pay extra each month based upon your income.

The Medicare Part D prescription drug program assists individuals who are on Medicare pay for both generic and brand-name prescription drugs. According to the Centers for Medicare & Medicaid Services (2023), “Part D remains one of Medicare’s most popular programs, with more than 49 million Medicare beneficiaries enrolled for prescription drug coverage”.^[1]

It is estimated for 2023, the monthly average Part D premiums are estimated to be $43, which is up from 2022 by 10%.^[2]

From October 15th to December 7 each year is the Medicare open enrollment period. This is when beneficiaries can choose a plan to enroll in that offers Part D prescription drug coverage. Individuals can choose a Medicare Advantage plan (part C), or people who are on Original Medicare, can purchase a stand-alone prescription drug plan. If you choose a Medicare Advantage plan (Part C), you will have coverage not only for all Medicare benefits but will also have coverage for prescription drugs (MA-PD).

Medicare drug coverage typically puts prescription drugs into a level system. The levels on their formularies in this system are referred to as “tiers”. For instance, you pay less for the drug on the lower tier. Another word for formulary is “drug list”. It is a list of the prescription drugs covered by the Part D program or any plan that offers prescription drug benefits. Each tier has a specific out-of-pocket cost that the beneficiary has to pay before getting the drug.

While deciding, note if you’re on a medication that only comes in the brand name and doesn’t have a generic type available. You will want to make sure to choose a plan that covers brand names. Also, be on the lookout for plans that make you pay a copay for upper tiers (high-level expensive drugs) because the cost can be so high it becomes unaffordable leaving you with a ridiculously high out-of-pocket responsibility.

Also, if you have a chronic illness (long-term or rare) you may be required to be on drugs filled by a prescription that is mail-order. Drugs that have a handling requirement, require you to take them on a strict schedule, require strict monitoring for side effects, need special storage, are given by infusion or injection, and are usually filled by pharmacies that specialize in these conditions. Quite obviously these specialized medicines are more expensive than other more common medications. They usually need prior authorization from your insurance

^[1] The Centers for Medicare & Medicaid Services. (2023). CMS Releases 2023 Projected Medicare Basic Part D Average Premium. https://www.cms.gov/newsroom/news-alert/cms-releases-2023-projected-medicare-basic-part-d-average-premium

^[2] https://www.kff.org/medicare/issue-brief/medicare-part-d-a-first-look-at-medicare-drug-plans-in-2023/

company. If you are in this situation of needing more expensive specialty drugs, a billing coordinator will help your providers and you organize the process.

Conclusion

In general, if you are 65 or older you are eligible for Medicare. You can get Medicare earlier than that age if you are disabled by Lou Gehrig’s disease (ALS) or are in permanent kidney failure requiring dialysis or a transplant (ESRD – End-Stage Renal Disease).

Most individuals have a premium-free Part A (you don’t have to pay a Part A premium). You don’t have to pay a Part A premium if you are getting Social Security disability checks or retirement checks from Social Security or the Railroad Retirement Board.

Senior Plan Advisors specializes in maximizing your Medicare benefits! We will guide you through enrolling in the best Medicare plan that you qualify for and that suits your needs and your wallet. We can help. Call us today at 888.809.2440 TTY/711

***Disclaimer: A Senior Healthcare medical specialist has reviewed this information. It is for educational purposes only and is not intended to replace the advice of your doctor or other health care provider. We encourage you to discuss any questions or concerns you may have with your provider.