Medicare 101 for New Retirees

Adults who are getting ready to retire often have questions about Medicare. Without a doubt, it's a confusing system for those who are new to it. Understanding what’s covered under each of the different parts of the program can be overwhelming. As can figuring out whether traditional Medicare or one of the many Medicare Advantage Plans is the best fit for your needs.

We’ve created this Medicare FAQ page to help make navigating the system easier for new retirees and people who are preparing to leave the working world behind. Our hope is that it will smooth your transition from an employer-sponsored health plan to the country’s national insurance program.

Medicare 101: What to Know About Your Benefit

Here are answers to some of the most commonly asked questions people have about Medicare.

Q: What age do you have to be to qualify for Medicare benefits?

A: For most adults, Medicare eligibility begins at the age of 65. But there are a few exceptions. Younger people with certain health conditions, such as permanent kidney failure and amyotrophic lateral sclerosis, might be eligible. People who receive Social Security disability benefits often qualify, too, although there is typically a waiting period that is based on their medical diagnosis.

Q: Is Medicare free? If not, how much does it cost?

A: Yes and no. Because most workers (or their spouse) pay into Medicare, Part A of the benefit is usually free. But there is a monthly premium for Part B coverage and for Part D (if you opt for it). In 2024, Medicare Part B is $174.70 per month. While Part D pricing varies, the average monthly cost for basic benefit coverage in 2024 is $34.50.

Q: Does Medicare pay 100% of a senior’s health care expenses?

A: No, Medicare has deductibles and limits that enrollees are responsible for paying. The exception is if you opt for a Medicare Advantage Plan that doesn’t have any deductibles. With traditional Medicare, it is often a good idea to purchase additional coverage, known as Medigap insurance, to help with unpaid expenses. 2024 Choosing a Medigap Policy is a helpful guide you can download at no cost.

Q: How many different Medicare parts are there?

A: Many people have this question about Medicare, even those who have long been a part of the program.

• Part A: Often referred to as the “hospital benefit” part of Medicare, it also covers short-term stays in a rehabilitation center, hospice care, and skilled home health services.
• Part B: This part of Medicare covers services considered medically necessary and preventative. That can include doctors’ appointments, outpatient rehabilitation, durable medical equipment, ambulance services, preventative screenings, and laboratory testing.
• Part C: Private insurance companies can contract with Medicare to provide health care services to seniors. These plans, called Medicare Advantage Plans, are also known as Part C of the benefit. Your care will still fall under the umbrella of Medicare, which entitles you to the same rights and protections as a senior enrolled in traditional Medicare.
• Part D: This is the prescription drug coverage part of the Medicare benefit. Should you opt for traditional Medicare instead of a Medicare Advantage Plan, which typically includes prescription drug coverage, you’ll likely want to utilize Part D. In most cases, you need to sign up for drug coverage at the time you enroll in Medicare, or you will have to pay a late-enrollment penalty.
  

Q: Can I make changes to my Medicare plan any time I’d like?

A: Just as employer-sponsored health care plans have an open enrollment period once a year, so does Medicare. Medicare recipients can make changes to their plans during a six-week period every fall, beginning on October 15 and going through December 7.

Q: Am I required to sign up for Medicare Part D?

A: Healthy seniors who don’t take any medications often wonder if they need to sign up for Part D when they first enroll in Medicare. The answer is a bit complex. You aren’t required to sign up for Part D at all, but if you don’t opt in and your personal health care needs change, you will have to pay a penalty when you do sign up. So the general advice is to include it right from the start.

We hope this information is useful in learning more about the Medicare benefit and how you can make the most of it during retirement.

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