Medicare is a federal health insurance plan available to people who are nearing retirement age or who have a qualifying disability or health condition. When this program was started in 1965, it originally only provided insurance for retired individuals who were no longer able to receive coverage from employers or other sources. Throughout its history, the program has expanded to include individuals with disabilities and certain medical conditions.

Medicare benefits cover a wide range of health care needs. However, because everyone’s insurance needs are different, beneficiaries can choose which parts of the program to enroll in. Before signing up for coverage, though, it is important to learn about one’s eligibility, as it can affect how and when a beneficiary should apply for coverage. Once an individual has Medicare coverage, it is also important to learn where and how to use benefits.

What is Medicare?

Medicare is a federal health insurance program that is funded by the Centers for Medicare and Medicaid Services (CMS). This type of insurance is funded by various sources, including your income taxes, the premiums you pay for your coverage and the federal budget.

Certain parts of Medicare insurance are provided at no cost if you meet the eligibility criteria, but other parts will require paying a premium, just like you would expect with any other type of insurance. Be aware that Medicare health insurance is sometimes confused with Medicaid, which is a free health insurance program for low-income individuals. However, these are two separate programs, and each has its own eligibility requirements and benefits.

To learn more about the Medicare and all its different parts, download our free guide!

Who meets the requirements for Medicare?

Your Medicare eligibility may be based on several different factors, including your age, disability status and health conditions. Unlike Medicaid and other types of government assistance, this program does not have income-based eligibility. Your income is only a factor when determining the premiums that you must pay. If you have an income above a certain threshold, you will need to pay a higher premium for certain types of coverage, while others with a lower income will pay a standard premium for that coverage.

The standard Medicare eligibility age is 65 because this was the average retirement age in the past. While most workers today are not eligible for retirement until they reach at least 66 years of age, Medicare enrollment still starts at 65 years of age in most cases.

Aside from meeting the age requirements, you may also be eligible for Medicare based on a disability or health condition. You may qualify for Medicare if any of the following statements are true:

• You have end-stage renal disease (ESRD).
• You have amyotrophic lateral sclerosis (ALS).
• You have been receiving disability benefits for at least two years.

Discover the Steps to Sign Up for Medicare

In some cases, you will be enrolled in Medicare automatically as soon as you meet the eligibility requirements. Other times, it is necessary to sign up on your own. In any case, you should be aware of your eligibility so that you do not miss important enrollment steps or deadlines that may apply to you.

You will be signed up for Medicare automatically if you are already getting retirement benefits when you turn 65 years of age or if you have been receiving disability benefits for at least two years. When you are enrolled automatically, note that you only receive certain types of coverage, and that you may opt out of coverage that you do not want to pay a premium for.

You must apply for Medicare on your own if you are eligible for coverage and you are not signed up automatically. For example, you must enroll yourself if you meet the Medicare age requirements but are not receiving retirement benefits yet. It is important that you are aware of your individual enrollment deadlines in this situation, as you only have a few months during open enrollment in which to sign up without facing late enrollment penalties.

In the event you miss a sign-up deadline or want to switch plans after you have already enrolled, you may switch coverage or apply for a plan during an open enrolment period. These periods happen at different times of the year depending on the type of coverage you are trying to get.

Find out more about how to apply for Medicare by downloading our helpful guide.

What does Medicare cost?

Medicare costs can include premiums, deductibles and coinsurance. The amount you pay for coverage will depend on your eligibility as well as your insurance choices. In many cases, you can get certain types of coverage at no cost as long as you meet the eligibility requirements, such as working and paying taxes for enough years. Other types of coverage will require paying a premium no matter what.

When it comes to expenses, be aware that some types of coverage will have standard premiums for beneficiaries, while other types will have a variable cost depending on the type of plan a beneficiary chooses. Remember that premiums can also be affected by personal income.

Learn About Types of Medicare Coverage

Medicare insurance coverage is divided into four different Parts, and each type of coverage provides different benefits. You can choose to get more than one Part in order to have the specific types of coverage that you want or need. The four main parts are:

• Medicare Part A: Covers inpatient care and hospital stays, as well as certain types of nursing home care, hospice and home health care.
• Medicare Part B: Covers outpatient care, certain medical supplies, preventative care and doctor’s visits.
• Medicare Part C: Private insurance that provides the same coverages as Parts A, B and, in most cases, D.
• Medicare Part D: Covers prescription drug costs.

Note: Parts A and B together are referred to as Original Medicare. Part C plans, also referred to as Medicare Advantage plans, are an alternative to having Parts A and B.

Where can I use Medicare?

Once you enroll in Medicare, you can use your insurance in a similar way to traditional insurance coverage offered through an employer or the health insurance marketplace. However, it is important that you learn which providers accept your coverage, as your insurance cannot be used everywhere. When you need medical attention, you may search for a particular doctor or a specific medical need to see if your insurance will cover the service in question.