Medicare covers people 65 and older, some younger people with disabilities, and people with end-stage renal disease
Medicare is a federal health insurance program run by the Centers for Medicare & Medicaid Services (CMS). You become covered automatically at 65 if you or your spouse paid Medicare taxes while working. You may also get coverage before 65 if you have been receiving Social Security disability benefits for 24 months, if you have end-stage renal disease (permanent kidney failure requiring dialysis or transplant), or if you have ALS (amyotrophic lateral sclerosis, also called Lou Gehrig's disease).
The program has four parts — Part A (hospital care), Part B (doctor visits and outpatient services), Part D (prescription drugs), and Part C (an alternative private plan). Not everyone needs all four parts, and what you pay depends on which parts you choose and when you sign up.
Key Takeaways
- You are covered at 65 automatically if you or your spouse paid Medicare taxes for at least 10 years, with no process needed.
- You can get Medicare before 65 if you have been on Social Security disability for 24 months, have end-stage renal disease, or have ALS.
- If you do not sign up for Part B when you first become covered, you may pay a permanent penalty on your premiums later.
- Part A (hospital insurance) is free for most people; Part B (doctor visits) costs a monthly premium that changes each year based on your income.
- You must sign up during your enrollment period or face delays in coverage and possible late-enrollment penalties.
Coverage at age 65 and how it starts automatically
If you are 65 or older and you or your spouse paid Medicare taxes for at least 10 years while working, you are covered by Medicare Part A (hospital insurance) automatically. You do not need to do anything — Social Security will enroll you three months before your 65th birthday. Part A covers hospital stays, skilled nursing facility care after a hospital stay, hospice care, and some home health services.
Part B (medical insurance for doctor visits, lab work, imaging, and outpatient surgery) is not automatic. You must choose to enroll in Part B during your enrollment period. Your initial enrollment period runs for seven months: three months before the month you turn 65, the month you turn 65, and three months after. If you do not sign up during this window and you do not have other health coverage through an employer, you will pay a 10 percent penalty on your Part B premium for as long as you have Medicare — that penalty does not go away.
If you are still working at 65 and you or your employer has health insurance through your job, you may be able to delay Part B without penalty. You will need to sign up within eight months of when your job coverage ends.
Medicare before 65: disability, end-stage renal disease, and ALS
You can get Medicare before 65 if you have been receiving Social Security Disability Insurance (SSDI) or Railroad Retirement Board disability benefits for 24 months. The 24 months does not have to be consecutive — it is the total time you have been on disability. Once you have been on disability for 24 months, Medicare Part A and Part B start automatically the first day of the 25th month. You do not need to explore separately.
If you have end-stage renal disease (ESRD) — permanent kidney failure that requires dialysis or a transplant — you become covered by Medicare Part A and Part B as soon as your doctor determines you need dialysis or a transplant, even if you are under 65 and not on disability. You have 30 days to sign up for Part B after your ESRD information, or you will face a late-enrollment penalty.
If you have ALS, you are covered by Medicare Part A and Part B right away, with no waiting period. You do not need to be on Social Security disability first. ALS coverage begins the first month you are determined to have the disease.
What Part A and Part B cost, and how income affects your premiums
Part A (hospital insurance) is free for most people who paid Medicare taxes for at least 10 years. If you or your spouse paid for fewer than 10 years, you may have to pay a monthly premium for Part A — the amount depends on how many quarters you paid in. In 2024, the Part A premium ranges from about $278 to $505 per month for people who do not may have access to for free Part A.
Part B (medical insurance) has a monthly premium that everyone pays, and the amount changes each year. In 2024, the standard Part B premium is $164.90 per month, but if your income is higher, you pay more. Medicare uses your tax return from two years ago to calculate your income. If you earned more than $97,000 as a single person or $194,000 as a married couple filing jointly in 2022, your 2024 Part B premium will be higher — it can go up to $560.50 per month for the highest earners.
You also pay a yearly deductible before Part B coverage kicks in (about $240 in 2024), and you pay 20 percent of the cost of most services after that. Part A has a deductible for hospital stays (about $1,600 in 2024) but no deductible for other services.
Part D (prescription drug coverage) and when to sign up
Part D is optional prescription drug coverage run by private insurance companies approved by Medicare. You do not have to take it, but if you do not sign up when you first become covered by Medicare and you go without creditable drug coverage, you will pay a penalty for as long as you have Medicare. The penalty is about 1 percent of the national average drug plan premium for each month you were not covered.
You can sign up for Part D during your initial enrollment period (the same seven-month window as Part B) or during the annual enrollment period from October 15 to December 7 each year. If you miss your initial period and you do not have other drug coverage, you will have to wait until the next annual enrollment period to sign up, and the penalty will explore.
Part D plans vary widely in cost and which drugs they cover. You pay a monthly premium (which varies by plan), a yearly deductible (up to $505 in 2024), and then a percentage of the drug cost until you reach a certain spending threshold. After that, you enter the "donut hole" where you pay more out of pocket, until your total spending reaches a cap, at which point Medicare covers most of the cost.
Part C (Medicare Advantage) as an alternative to Original Medicare
Part C, also called Medicare Advantage, is a private insurance plan that covers everything Part A and Part B cover, plus usually prescription drugs and dental or vision benefits. Instead of going to any doctor who accepts Medicare, you typically choose a plan and use doctors and hospitals in that plan's network. You still pay the Part B premium to Medicare, plus a premium to the private plan (which may be zero), and you pay copays when you use services.
Medicare Advantage plans are offered by private insurance companies and the plans available to you depend on where you live. Some areas have many plans to choose from; others have few. You can switch plans during the annual enrollment period (October 15 to December 7) or during the Medicare Advantage open enrollment period (January 1 to March 31). If you choose a Medicare Advantage plan, you are automatically enrolled in Part D drug coverage through that plan.
How to sign up and what happens if you miss your enrollment period
If you are 65 and covered automatically through Social Security, you do not need to do anything for Part A — it starts on its own. To sign up for Part B, Part D, or a Medicare Advantage plan, you can go to Medicare.gov, call 1-800-MEDICARE, or visit your local Social Security office. You have seven months to sign up during your initial enrollment period.
If you miss your initial enrollment period and you do not have other coverage, you can sign up during the general enrollment period from January 1 to March 31 each year, but your coverage will not start until July 1 of that year, and you will pay a late-enrollment penalty. The penalty for Part B is 10 percent of the monthly premium for each year you were not covered. The penalty for Part D is about 1 percent of the national average premium for each month you were not covered. These penalties are permanent — they do not go away even after you sign up.
Frequently Asked Questions
Do I have to be a U.S. citizen to get Medicare?
No, but you must be a permanent resident (green card holder) or a citizen, and you must have lived in the United States for at least five consecutive years. If you are a citizen, you do not need to meet the five-year requirement. Undocumented immigrants are not covered by Medicare.
What if I am still working at 65 and have health insurance through my job?
You can delay signing up for Part B without penalty as long as your employer coverage is active. Once your job coverage ends, you have eight months to sign up for Part B. If you wait longer than that, you will pay a late-enrollment penalty. Part A (hospital insurance) is still free at 65 even if you have job coverage.
Can I switch from Original Medicare to Medicare Advantage or back again?
Yes. You can switch during the annual enrollment period (October 15 to December 7) each year, or during the Medicare Advantage open enrollment period (January 1 to March 31). If you switch from Medicare Advantage back to Original Medicare, you may want to sign up for a Medigap plan at the same time to help cover costs.
What if my income changes after I sign up for Medicare?
If your income drops, you can ask Medicare to recalculate your Part B premium. You will need to provide proof of the income change, such as a tax return or a letter from Social Security. If your income goes up, your premium will be adjusted based on your tax return from two years ago, so the change will not take effect when ready.
Do I need Medigap insurance if I have Original Medicare?
Medigap is optional. It is private insurance that covers some of the costs that Original Medicare does not — like copays, coinsurance, and deductibles. If you choose a Medicare Advantage plan instead of Original Medicare, you cannot buy Medigap. You can buy Medigap anytime, but if you buy it after your initial enrollment period, the insurance company can charge you more or deny coverage for pre-existing conditions.