Retirement and Health Insurance: Understanding Medicare

What is Medicare?

Medicare, also sometimes referred to as Original Medicare, is a federally funded health insurance plan for the following:

  1. People 65 or older
  2. People under 65 with certain disabilities
  3. People of any age with End-Stage Renal Disease (ESRD)

Medicare has 4 parts:

  1. Medicare Part A (hospital insurance) helps cover inpatient hospitals stays, skilled nursing facilities, hospice and home health care. Part A is free for most people.
  2. Medicare Part B (medical insurance) helps cover doctors’ services, lab work, outpatient care, durable medical equipment and other medical services. There is a monthly premium for Part B that many people have automatically deducted from their Social Security checks.
  3. Medicare Part C (Medicare Advantage plans) are health plans like HMOs and PPOs run by Medicare-approved private insurance companies. Medicare Advantage plans include Part A and Part B benefits, and may also include extra benefits like vision, hearing and fitness. Many plans also include Medicare Part D prescription drug benefits, sometimes for an extra cost.
  4. Medicare Part D (prescription drug coverage) helps cover the cost of prescription drugs. Coverage is available through Medicare-approved private insurance companies. It can either be a stand-alone prescription drug plan (PDP) or a Medicare Advantage prescription drug plan (MA-PD) that combines medical and drug coverage.
Who can get Medicare?

Most people age 65 or older (or under 65 and disabled) who are citizens or permanent residents of the United States are eligible for free Medicare hospital insurance (Part A).

You are eligible for Part A at age 65 if:

  1. you receive or are eligible to receive Social Security or Railroad Retirement Benefits (RRB); or,
  2. you or your spouse (living or deceased, including divorced spouses) worked long enough in a government job where Medicare taxes were paid.

If you don’t qualify for free Medicare hospital insurance (Part A), you may be able to get it by paying a monthly premium. Anyone who is eligible for Medicare hospital insurance (Part A) can get Medicare medical insurance (Part B) by paying a monthly premium. People with higher incomes may have to pay a higher premium.

When do I become eligible for Medicare?

Most people qualify for Medicare when they turn 65, and some get Part A and Part B automatically.

  1. If you are already getting benefits from Social Security or the Railroad Retirement Board (RRB):

You will automatically get Part A and Part B starting the first day of the month you turn 65. If your birthday is on the first day of the month, Part A and Part B will start the first day of the month prior.

  1. If you are under age 65 and disabled:

You automatically get Part A and Part B after you get disability benefits from Social Security of certain disability benefits from the RRB for 24 months. (ALS patients automatically get Part A and Part B the month disability benefits begin.)

You will receive your Medicare card in the mail three months before your 65th birthday or your 25th month of disability. If you decide you don’t want Part B coverage, follow the instructions on the card and send the card back. If you keep the card, you keep Part B and will pay Part B premiums.

  1. If you are still working and are not already getting Social Security or RRB benefits — and want Part A or Part B — you will need to sign up.

You should contact Social Security at 800-772-1213 (TTY 1-800-325-0778) or about three months before your 65th birthday to sign up for Medicare. You can sign up for Medicare even if you do not plan to retire at age 65. There are specific timeframes around Medicare enrollment, and the rules can be very strict. When you apply for Medicare, Social Security often also takes an application for monthly benefits. If you want to apply, Social Security will suggest that you apply for retirement and Medicare benefits online. Careful planning and consultation can help you avoid paying enrollment penalties or being caught without medical and drug coverage when you need it most.

What are some other resources I should consider in researching my options?

Social Security Administration (SSA): 800-772-1213 (TTY: 800-325-0778)

Medicare: 800-633-4227 (TTY 877-486-2048)

Massachusetts Office of Medicaid: 617-210-5000