Medicare provides affordable health insurance to approximately 62.6 million people. Read this article for a complete overview of the Medicare program and the procedure to sign up for medicare.
Medicare, a federal social insurance program, was established in 1965. Its goal is to provide health insurance to the elderly and disabled. Unlike Medicaid, Medicare is not restricted to people with low incomes or those living in poverty. However, a sizable number of people meet the eligibility requirements for both programs.
In 2020, 62.6 million people were enrolled in Medicare, accounting for 18.4% of all people in the United States. Around 54 million of them received benefits due to their age, while the remainder received benefits due to various disabilities. Maine and West Virginia had the highest percentages of Medicare beneficiaries in their populations, with 24 and more percent of the population enrolled. California had the highest number of Medicare beneficiaries, with over 6.2 million.
Medicare has proven to be beneficial to many Americans, but the question remains: how does one sign up for Medicare? Read on for a comprehensive guide to Medicare’s eligibility criteria and how to sign up for medicare.
What is Medicare?
Medicare is a federal program in the United States that provides health insurance to people 65 and older, as well as people with certain disabilities regardless of age. In 1965, Congress established this program as part of the Social Security Program. The goal of Medicare was to provide coverage to people aged 65 and up who did not have any health insurance, to begin with.
The program has now expanded to include people with end-stage renal disease and amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig’s disease. While the program helps with the cost of health care, it does not cover all medical expenses, particularly those associated with most long-term care.
What are the different plans under Medicare?
Original Medicare consists of two plans: Medicare Parts A and B. Original Medicare covers a large portion of the cost of covered health care services and supplies, but not all of them. Part A of Medicare, also known as “hospital insurance,” covers hospital stays and inpatient care. It only pays for treatments that are deemed medically necessary. This indicates that the doctor has agreed that the treatment is necessary to treat any ailment or condition.
Part A of Medicare covers inpatient medical care such as home health services, long-term care facilities, program in-patient rehab, hospice, hospital care, nursing home care, and skilled nursing facility care. Nursing care, physical therapy, and occupational therapy are among the home health services mentioned. Medicare Part A coverage for skilled nursing facility care includes meals, supplies, and nurse-administered injections.
Part A of Medicare provides care for the comfort of terminally ill patients who no longer wish to pursue treatment for their illness. How much Part A pays for these services is determined by the type of facility you stay in, whether you’ve met the deductible (which resets with each new stay), and the length of your stay.
Whilst Medicare Plan A covers most of the inpatient services, Medicare Part B covers outpatient medical services. They give the following services:
- Ambulance services
- Doctor’s office visits
- Durable medical equipment which includes equipment such as wheelchairs, walkers, and bathtub transfer benches
- Blood work and lab tests
- Mental health and substance abuse treatment.
- Outpatient surgery
Preventive care services covered by Medicare Part B include tobacco cessation therapy, annual wellness visits, nutrition therapy, flu shots, diabetes screenings, cancer screenings, HIV and STD screenings, and preventive care. Part B covers 80 percent of the costs for covered services, with patients responsible for the remaining 20%.
In 1997, Medicare Advantage, also known as Medicare Part C, was established. Unlike the Original Medicare plan, this plan was administered by insurance companies rather than the federal government. These insurance companies provide supplemental benefits in addition to the benefits provided by Original Medicare. The Advantage plan includes hospital and medical insurance.
Additional benefits incorporated in the Advantage plan include:
- Prescription drug coverage:
Almost all Medicare Advantage plans offer prescription drug coverage, unlike the Original Medicare plan
- Dental, vision, and hearing:
Medicare Advantages plan covers treatments even if they are deemed to be medically unnecessary by the doctors and the health professionals. Though, most Medicare Advantage plans differ in the amount of coverage for these alternatives.
Many Advantage plans have no or low deductibles and no premiums. Another benefit of Medicare Advantage is that most plans place limits on the maximum cash-based costs you can incur during a plan year. Besides that, studies have shown that switching to a Medicare Advantage plan can save you money on lab administrations and clinical equipment. If you choose a Medicare HMO plan, you may see more investment funds on healthcare administrations provided by your HMO network.
Some plans offer long-term savings, plan adaptability, and better consideration, whereas others can prompt fewer supplier alternatives, extra expenses, and challenges in one’s way of life.
What’s more is that a few organizations offer other health-related advantages under their Medicare Advantage plans, like gym memberships, clinical transportation, and food delivery. Considerable Medicare Advantage plans also offer the accompanying advantages:
- some home healthcare services
- hospice care
- doctor’s visits
- preventive care
- SilverSneakers fitness memberships
Medicare Part D, also known as the Medicare prescription drug benefit, is an optional health insurance program provided by the U.S Federal government.
Because both Parts A and B lacked outpatient drug coverage, they introduced Medicare Part D in 2006. It is a supplemental program that assists with the cost of prescription drugs.
Medicare Plan D assists Medicare beneficiaries in paying for self-administered prescription drugs because they are eligible for prescription drug insurance. You are eligible to enroll in Part D if you have Original Medicare. Alternatively, you can enroll in Medicare Part C, which includes some prescription drug coverage.
They provided Part D through private insurance companies as a stand-alone plan for those on Original Medicare, or as a set of benefits included with your Medicare Advantage Plan. This insurance only pays for a portion of the medication costs. Most beneficiaries pay a monthly premium as well as various cost-sharing obligations, such as copays and deductibles.
A formulary is a list of drugs that are covered by Medicare drug plans, including Medicare drug plans and Medicare Advantage Plans. This plan includes coverage for both brand-name and generic prescription drugs.
Almost two drugs are included in the formulary in the most commonly recommended classifications and classes. These aides ensure that people receive the prescription drugs they require for any of the illnesses suffered by them. If Part D’s formulary does not include the specific drug you require, an alternative or comparative drug must be used. If your prescriber deems the alternatives unsatisfactory, you can request an exemption. Otherwise, you may have to pay for the medication yourself or file an appeal.
A Medicare drug plan’s drug list is updated throughout the year by Medicare’s guidelines. When drug treatments change, new drugs are delivered, or new clinical data becomes available, the list is updated. All Part D plans must include at least two drugs from each class and must cover all drugs available in the following classifications:
A drug category is a collection of medications that treat the same symptoms or have similar effects on the body. All Part D plans must include at least two drugs from most categories and must cover all drugs available in the following categories:
- HIV/AIDS treatments
- Antipsychotic medications
- Anticonvulsive treatments for seizure disorders
- Immunosuppressant drugs
- Anticancer drugs (unless covered by Part B)
Part D plan also covers most of the vaccines, excluding the ones that the Medicare Part B plan has covered. Part D also excludes drugs and medicines that the law has banned. Following is a list of a few drugs that are excluded from Medicare’s’ coverage. There are certain kinds of drugs that are excluded from Medicare coverage by law. Medicare does not cover:
- Drugs used to treat anorexia, weight loss, or weight gain Part D may cover drugs used to treat physical wasting caused by AIDS, cancer, or other diseases
- Fertility drugs
- Drugs used for cosmetic purposes or hair growth: Drugs used for the treatment of psoriasis, acne, rosacea, or vitiligo are not considered cosmetic drugs and may be covered under Part D
- Drugs that are only for the relief of cold or cough symptoms
- Drugs used to treat erectile dysfunction
- Prescription vitamins and minerals (except prenatal vitamins and fluoride preparations)
- Non-prescription drugs (over-the-counter drugs)
Prescription drugs used to treat the aforementioned conditions may be covered if they are also used to treat other conditions. Medicine for the relief of cold symptoms might be covered by Part D if prescribed to treat something other than a cold, such as shortness of breath from severe asthma, as long as the FDA has approved it for such treatment.
If your doctor prescribes a non-cancer medication on your plan’s formulary for a reason other than the FDA-approved use, your medication will most likely not be covered unless the use is listed in one of three Medicare-approved drugs compendia (medical encyclopedias of drug uses). When deciding whether to cover a drug for cancer treatment, your drug plan will consult these and other compendia as well as peer-reviewed medical literature.
Your Part D plan may also deny your drug because it does not meet the FDA’s Drug Efficacy Study Implementation (DESI) standards. DESI assesses the efficacy of drugs that were previously approved solely based on their safety. Part D does not cover drugs that are found to be less than effective by DESI evaluation.
Medicare open enrollment
On December 8, 2021, Medicare open enrollment for 2022 coverage ended. The open enrollment period for Medicare Advantage begins on January 1 and ends on March 31. Medicare Advantage enrollees can use this window to switch to a different Advantage plan or Original Medicare. During this period, only one plan change is permitted.
The general enrollment period for Medicare is also from January 1 to March 31. This window is for people who did not sign up for Part B when they first became eligible and do not have access to a special Part B enrollment period.
People who have to pay a premium for Medicare Part A and did not enroll in Part A when they first became eligible can also use the general enrollment period. In addition, the five-year Medicare enrollment period has begun and will last until November 30, 2022. If a five-star Medicare plan is available in your area, you have until the end of this window to switch.
When is Medicare open enrollment?
Medicare open enrollment, also known as Medicare’s annual election period, occurs each year from October 15 to December 7. Although Medicare’s open enrollment period ends on December 7 each year, people in areas where FEMA declares an emergency or a major disaster that prevents them from signing up during the normal window are eligible for extended enrollment.
During this annual window, Medicare plan enrollees can reevaluate their coverage – whether it’s Original Medicare with supplemental drug coverage or Medicare Advantage – and make changes or purchase new policies if they wish.
What plan changes can I make during the Medicare open enrollment period?
During the Medicare open enrollment period, you can:
- Switch from Original Medicare to Medicare Advantage (as long as you’re enrolled in both Medicare Part A and Part B, and you live in the Medicare Advantage plan’s service area).
- Switch from Medicare Advantage to Original Medicare (plus a Medicare Part D plan, and possibly a Medigap plan).
- Switch from one Medicare Advantage plan to another.
- Switch from one Medicare Part D prescription drug plan to another.
- Enroll in a Medicare Part D plan if you didn’t enroll when you were first eligible for Medicare. If you haven’t maintained other creditable coverage, a late-enrollment penalty may apply.
Before 2021, patients with end-stage renal disease were unable to enroll in Medicare Advantage plans unless a Medicare Special Needs Plan for ESRD patients was available in their area. However, under the terms of the 21st Century Cures Act, that will change as of 2021. People with ESRD now have the option to enroll in Medicare Advantage, and CMS anticipates that more than 40,000 will do so by 2021. This can be especially beneficial for beneficiaries with ESRD who are under the age of 65 and live in states where access to Medigap plans for people under the age of 65 is not guaranteed.
Medicare sign up: what you can’t do
The annual Medicare open enrollment period does not apply to Medigap plans, which are only guaranteed issues in most states during a beneficiary’s initial enrollment period and for a limited time during special enrollment periods.
If you did not enroll in Medicare when you first became eligible, you will be unable to sign up during the fall open enrollment period. Instead, you’ll take advantage of the Medicare general enrollment period, which runs from January 1 to March 31.
The general enrollment period for Medicare is for people who did not sign up for Medicare Part B when they first became eligible and do not have access to a Medicare Part B special enrollment period. It is also for people who have to pay a premium for Medicare Part A but did not enroll when they first became eligible. If you sign up during the open enrollment period, your coverage will begin on July 1.
How to sign up for and change Medicare plans?
Once you’re enrolled in Medicare, you’ll have various opportunities to change certain aspects of your coverage. Here’s an overview:
- During the annual open enrollment period (October 15 – December 7), you can make a variety of changes, none of which involve medical underwriting:
- Switch from Medicare Advantage to Original Medicare or vice versa.
- Switch from one Medicare Advantage plan to another.
- Switch from one Part D prescription plan to another. It’s highly recommended that all beneficiaries use Medicare’s plan finder tool each year to compare the available Part D plans, as opposed to simply letting an existing drug plan auto-renew.
- Join a Medicare Part D plan. (Late-enrollment penalty might apply.)
- Drop your Part D coverage altogether. (Re-enrolling in a later year will include a late-enrollment penalty if you’re not maintaining other creditable drug coverage.)
- During the Medicare Advantage open enrollment period (January 1 – March 31), Americans who are already enrolled in Medicare Advantage can:
- Switch to Original Medicare (and enroll in a Part D plan; access to Medigap might require medical underwriting, depending on the circumstances.)
- Switch to a different Medicare Advantage plan.
- Only one plan change is allowed during this window (unlike the fall enrollment period, when a person can change their mind multiple times, with the last plan selection taking effect on January 1)
- During the five-star enrollment period (December 8 – November 30), people who live in an area with a five-star Medicare Part D or Medicare Advantage plan can switch to that plan if they choose to do so.
- During the first year a person is enrolled in Medicare Advantage, they can switch to (or back to) Original Medicare and a Part D plan. And with some exceptions, they also have guaranteed-issue access to a Medigap plan.
- Any time during the year, a person enrolled in Original Medicare can apply for a different Medigap plan. But if it’s not during the person’s one-time Medigap enrollment window, the insurer will likely use medical underwriting to determine whether to issue the policy and at what price (note that some states have continuous or annual windows when at least some Medigap plans are guaranteed issue).
Medicare eligibility for the majority of Americans coincides with the age of 65, but some people become eligible for Medicare earlier. Most Medicare beneficiaries do not have to pay a monthly premium for Medicare Part A, but some do. Furthermore, some beneficiaries must pay more than the standard amount for Medicare Part B and Part D coverage.
Here’s a comprehensive look at who qualifies for all aspects of Medicare coverage. In summary:
- Most Americans become eligible for Medicare when they turn 65.
- But 14% of all Medicare beneficiaries are under 65 and became eligible after receiving Social Security disability benefits for two years or being diagnosed with ALS or end-stage renal disease.
- To enroll in Medicare Advantage, you must enroll in both Medicare Part A and Part B. Your Medicare Advantage plan will take the place of both parts, and will likely also include Medicare Part D prescription drug coverage.
- To get Medicare Part A without having to pay a monthly premium, you or your spouse must have worked for at least 10 years in the United States, paying Medicare taxes during that time.
- If you earn a lot of money, you’ll have to pay more for Part B and Part D coverage than other people. For 2022, “high income” is defined as having earned more than $91,000 for a single person or $182,000 for a couple in 2020 (this is indexed annually). The determination is always based on income earned two years prior, but if your circumstances have changed significantly since then, you can use an appeals process.
- You’re eligible to enroll in Medicare Part D as long as you have either Medicare Part A or Part B.
- If you have Medicare Parts A and B (but not Medicare Advantage or Medicaid), you can enroll in a Medigap plan to supplement your Medicare coverage. You’ll have a six-month guaranteed-issue window in which to enroll in any Medigap plan available in your area. If you apply for a Medigap plan after that window closes, you’ll have to go through medical underwriting in most states and circumstances.
How do I sign up for Medicare?
This section walks you through the basics of enrolling in Medicare.
Enrolling in Original Medicare
If you already receive Social Security or Railroad Retirement Board benefits and live in the United States, the federal government automatically enrolls you in both Medicare Part A and Medicare Part B at the age of 65. Your Medicare card will arrive in the mail about three months before you turn 65, and your coverage will begin on the first of the month you turn 65.
The monthly premium for Medicare Part B is deducted from your Social Security or Railroad Retirement check.
For 2022, the standard Part B premium is $170.10 per month. This is an increase from $148.50 per month in 2021, and it is significantly higher than what was initially projected in the Medicare Trustees Report. However, the Social Security cost-of-living adjustment (COLA) for 2022 is the highest in 30 years and will cover the increase in Part B premiums (the cost of Part B is deducted from Social Security checks for most beneficiaries; learn more about how that works here). The higher-than-expected increase in Part B premiums, on the other hand, will consume a significant portion of the Social Security COLA that many beneficiaries receive.
You can opt-out of Part B and avoid the premiums, but only if you have health insurance through your current employer or your spouse’s current employer and the employer has at least 20 employees.
If you reach the age of 65 but do not yet receive Social Security or Railroad Retirement benefits, you will not be automatically enrolled in Original Medicare. Instead, you’ll be able to enroll during a seven-month period that includes the three months preceding your birth month, the month you turn 65, and the three months following. So, if you turn 65 on July 14, your open enrollment period will run from April to October.
You’ll apply for benefits through the Social Security Administration. Although your enrollment period is seven months long, you must enroll three months before your birthday month to have coverage begin on the first of the month you turn 65. If you enroll during your birthday month or one of the three following months, your Part B coverage will begin later.
If you are disabled and receiving Social Security Disability benefits, Medicare coverage will begin automatically in the 25th month of your disability benefits. (You do not have to wait two years if you have ALS or end-stage renal disease.)
How do I enroll in Medicare Advantage?
To enroll in a Medicare Advantage Plan, you must have Original Medicare (Parts A and B) coverage and live in an area where an Advantage plan is available. (While Medicare Advantage plans are available in most parts of the country, some rural areas do not.)
A Medicare Advantage plan combines Medicare Parts A and B (and, in most cases, Part D) coverage into a single plan. However, you will still have to pay the government a Part B premium in addition to the Medicare Advantage premium (which might be $0 depending on the plan). When you first become eligible for Medicare, you can enroll in a Medicare Advantage plan, or during the annual Medicare open enrollment period in the fall.
When can I enroll in Medicare Part D?
When you first become eligible for Medicare, you have seven months beginning three months before the month you turn 65, or seven months beginning three months before your 25th month of disability, to sign up for Medicare Part D. If a person enrolls in Medicare due to a diagnosis of ALS or end-stage renal disease, the eligibility rules are different.
In both of these scenarios, whether you’re turning 65 or are eligible for Medicare due to a disability, you’ll most likely have the option of choosing a Medicare Advantage plan that includes Part D prescription drug coverage and replacing Medicare A, B, and D with it.
If you sign up for Medicare during the January – March General Enrollment Period, you can join a Medicare Advantage plan (the majority of which include Part D) between April 1 and June 30. If you already have premium-free Medicare Part A and are just signing up for Part B during the General Enrollment Period, you’ll have to wait until the fall open enrollment period (October 15 to December 7) to sign up for a stand-alone Part D plan. This is because Part D can be purchased with either Part A or Part B, whereas Medicare Advantage requires both. So if you’ve already had premium-free Part A, you were eligible for Part D as of when your Part A coverage took effect. But your eligibility for Medicare Advantage would only begin when you’re enrolled in both Part A and Part B.
If you’re enrolled in a Medicare Advantage plan and use the Medicare Advantage open enrollment period (January 1 to March 31) to switch to Original Medicare, you’ll also have the option to sign up for a Part D plan to supplement your Original Medicare coverage.
How do I enroll in a Medicare Supplement (Medigap) plan?
During your initial Medigap enrollment period (the six months beginning with the month you turn 65 and are enrolled in Medicare A and B), you cannot be denied Medigap coverage or charged more for it because of your medical history.
However, once that period expires, Medigap insurers in most states can use medical underwriting to determine your premiums and eligibility for coverage. (New York, Connecticut, Massachusetts, Maine, Missouri, California, Oregon, and Washington have laws that make it easier for people to enroll in or switch to a new Medigap plan after the initial enrollment period has ended. In addition, there are only a few federal guaranteed-issue rights for Medigap plans.)
To find out about Medigap policies in your state, contact your State Department of Insurance or your State Health Insurance Assistance Program, or call 1-855-593-5633 to speak with one of our partners, who can help you find a plan in your area.
You ought to be familiar with the process of signing up for Medicare plans now that you’ve read our comprehensive medicare guide. Medicare has a general enrollment period that can be used by people who have to pay a premium for Medicare Part A but did not enroll when they first became eligible. The five-year Medicare enrollment period has begun and will end on November 30, 2022, allowing you to switch to a five-star Medicare plan if one is available in your area.