Medicare is the biggest government health insurance program in the U.S. with more than 26 million participants. Most people can begin Medicare enrollment when they reach age 65, but some younger applicants can apply if they meet other requirements.
Medicare keeps health care costs low for enrollees. Some individuals may even get premium-free coverage. On the other hand, late enrollees may be subject to a penalty for signing up late. Find out more about when to apply for Medicare below.
Medicare was created in 1965 to provide affordable medical coverage for seniors. Like today, most Americans relied on employer-sponsored health insurance, which ended shortly after leaving a job. Retiring workers faced losing coverage at a time when their health care needs typically increased.
Much like employer-offered group health insurance, Medicare is a group plan for retired (or employed) individuals who meet the program requirements. Medicare eligibility expanded to include more than just seniors. Younger individuals can apply for Medicare if they have certain medical conditions or disabilities.
Although the Centers for Medicare and Medicaid Services (CMS) runs the program, the Social Security Administration (SSA) approves or denies applications. SSA reviews applicants’ work history and earnings through their Social Security number (SSN).
To apply for Medicare, applicants must either be U.S. citizens or permanent legal residents. If they qualify based on the latter condition, they must have lived in the U.S. for five or more years.
Medicare consists of four main parts:
- Medicare Part A
- Medicare Part B
- Medicare Part C
- Medicare Part D
Medicare Part A insurance covers inpatient services from hospitals, skilled nursing facilities, hospices, and homes. It is one portion of Original Medicare, and is often referred to as “hospital insurance.”
The other portion of Original Medicare is Medicare Part B, which covers outpatient and home health care. This medical insurance helps pay for healthcare providers and medical equipment services.
Medicare Part D insurance covers prescription drugs, including insulin and vaccines. It can reduce the expenses of health care visits when it pays for medication used during care.
Government-approved private companies offer Medicare Part C, also called Advantage Plans. Medicare Advantage Plans must cover the same services as Original Medicare, and they often have more comprehensive coverage.
Applicants who meet Medicare requirements will be eligible for any part. However, only those who have earned enough work credits can get Part A coverage without paying premiums.
Workers receive one work credit for each calendar quarter in which they pay Medicare taxes. Seniors can get premium-free Part A upon earning 40 work credits, which typically takes 10 years.
Medicare enrollment most commonly starts at age 65. However, younger people who qualify for Medicare may not need to pay a premium without earning 40 work credits. Next, find out who can enroll in the program before reaching 65 years of age.