Orlando Harmon
Medicare is a health insurance program that provides coverage for individuals aged 65 and over, as well as those with qualifying medical conditions or disabilities. While Medicare covers a large portion of healthcare costs, it does not cover everything, and individuals with Medicare may still be responsible for significant out-of-pocket expenses. As a result, some people consider purchasing supplemental insurance, also known as Medigap, to help cover these additional costs. However, it is important to note that Medicare works differently for individuals who are still working at age 65 or who have other forms of insurance, such as employer-sponsored coverage. In these cases, individuals may be able to delay enrolling in Medicare without incurring late enrollment penalties.
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What You'll Learn
Medicare and employer-sponsored insurance
Medicare is available to individuals aged 65 and over, as well as certain younger individuals with disabilities. Most people get Part A (Hospital Insurance) for free, but some have to pay a premium for this coverage. To be eligible for premium-free Part A, an individual must be entitled to receive Medicare based on their own earnings or those of a spouse, parent, or child. To receive premium-free Part A, the worker must have a specified number of quarters of coverage (QCs) and file an application for Social Security or Railroad Retirement Board (RRB) benefits.
If you have Medicare and other health insurance, such as employer-sponsored insurance, each type of coverage is called a "payer." The "primary payer" pays up to the limits of its coverage and then sends the rest of the balance to the "secondary payer." If the secondary payer doesn't cover the remaining balance, you may be responsible for the remaining costs. Medicare and employer coverage will need to coordinate benefits, which means that either Medicare or the employer plan pays first for covered care. The other insurance is "secondary" and may also pay a portion of the costs.
If you have employer-sponsored insurance when you become eligible for Medicare, you have the option to delay enrolling in Medicare Part B without incurring penalties. You can do this as long as your employer insurance qualifies as "creditable coverage," meaning it provides benefits that are at least as good as those offered by Medicare. Once you retire or lose your employer coverage, you can enroll in Medicare Part B during a Special Enrollment Period (SEP) without facing late enrollment penalties. This SEP typically lasts for eight months after your employment or coverage ends. It is essential to coordinate the timing of your Medicare Part B enrollment with the end of your employer coverage to ensure uninterrupted healthcare benefits.
If your employer has fewer than 20 employees, you must sign up for Medicare when you're eligible, or you may face a late enrollment penalty for Part B when you sign up later. If your employer has 20 or more employees, you can delay signing up without any late enrollment penalties in the future. If you're under 65 and eligible for Medicare due to a disability, you're not required to sign up until you turn 65.
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Medicare and drug coverage
Medicare is a health insurance program that provides coverage for individuals aged 65 and older, as well as some younger people with disabilities or end-stage renal disease (ESRD). It is available to US citizens and those lawfully present in the United States. There are different parts to Medicare, each covering different aspects of healthcare:
Medicare Part A
Medicare Part A, also known as Hospital Insurance, covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care services. Most people are eligible for premium-free Part A if they or their spouse have worked and paid taxes for a certain number of quarters (QCs). The exact number of QCs required depends on the individual's situation.
Medicare Part B
Medicare Part B, or Medical Insurance, covers outpatient care, medical supplies, and preventive services. Some individuals may need to pay a premium for Part B coverage.
Medicare Part C
Medicare Part C, also known as Medicare Advantage, is an alternative to Original Medicare (Parts A and B). It is offered by private companies approved by Medicare. Part C plans combine the benefits of Parts A and B, and often include additional benefits such as prescription drug coverage (Part D). To be eligible for Part C, individuals must already have Part A and Part B.
Medicare Part D
Medicare Part D is the prescription drug coverage component of Medicare. It is optional and available to everyone with Medicare. Individuals may join a separate Medicare drug plan or get their Part D coverage through a Medicare Advantage Plan. However, if they do not sign up for a drug plan when they first get Medicare, they may have to pay a late enrollment penalty if they go 63 days or more without creditable drug coverage.
Medigap Policies
Medicare Supplement Insurance, or Medigap, is additional insurance that individuals can purchase from a private company to help cover some of the costs that Original Medicare does not. Most Medigap policies do not cover long-term care, vision, dental, hearing aids, private-duty nursing, or prescription drugs. To buy a Medigap policy, individuals generally need to have both Part A and Part B.
In conclusion, Medicare offers a range of coverage options, including prescription drug coverage, to meet the diverse needs of its beneficiaries. It is important for individuals to carefully consider their healthcare needs and choose the Medicare plan(s) that best suit their requirements.
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Medicare Advantage Plan
If you have Medicare and other health insurance, each type of coverage is called a "payer". The "primary payer" pays up to the limit of its coverage and then sends the rest of the balance to the "secondary payer". If the secondary payer does not cover the remaining balance, you may be responsible for the remaining costs. Medicare Advantage Plans (also known as Part C) are one of the several types of Medicare health plans that provide Part A (Hospital Insurance) and Part B (Medical Insurance) benefits to people with Medicare. These plans are typically offered by private companies that contract with Medicare and must follow rules set by Medicare. To join a Medicare Advantage Plan, you must have both Part A and Part B. Most Medicare Advantage Plans include Part D coverage (drug coverage). In most types of Medicare Advantage Plans, you cannot join a separate Medicare drug plan.
Medicare Part A and Part B are available to individuals who meet certain eligibility criteria. Most people receive Part A for free, but some may have to pay a premium. To be eligible for premium-free Part A, an individual must meet specific requirements based on their own or their spouse's, parent's, or child's earnings. Similarly, there are conditions for enrolling in Part B or premium Part A at a specific time. For example, individuals performing volunteer service outside the US for a tax-exempt organisation with health insurance coverage may be eligible for a Special Enrollment Period (SEP).
If you have questions about your coverage or if it changes, it is recommended to contact the Benefits Coordination and Recovery Center. Additionally, it is important to inform your doctor or healthcare provider about any changes in your insurance or coverage when you receive care. Medicare Supplement Insurance (Medigap) is another option to consider. It is extra insurance that can be purchased from a private company to help cover costs in Original Medicare. Generally, you need Part A and Part B to buy a Medigap policy, and these policies may offer coverage when travelling outside the US.
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Medicare and late enrollment penalties
If you have Medicare, you may not need additional insurance. However, Medicare does not cover certain benefits, such as vision, hearing, and dental services. You can join a separate Medicare drug plan if you want to add drug coverage.
Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) are available to most individuals. Most people get Part A for free, but some have to pay a premium for this coverage. If you have to pay a premium for Medicare Part A and you don't sign up when you're first eligible, you may face a late enrollment penalty. This penalty is a 10% increase in your monthly premium, and you'll have to pay it for twice the number of years you delayed enrolling.
For each 12-month period you delay enrolling in Medicare Part B, you will have to pay a 10% Part B premium penalty, unless you have insurance based on your or your spouse’s current work (job-based insurance) or are eligible for a Medicare Savings Program (MSP). If you delayed enrolling in Part B for seven years (and you did not have employer insurance, which allows you to delay enrollment), your monthly premium would be 70% higher for as long as you have Medicare.
You may pay a Part D late enrollment penalty if you don’t join a Medicare drug plan when you first get Medicare and go 63 days or more without creditable drug coverage. The penalty amount comes from the "national base beneficiary premium" ($36.78 in 2025). The penalty is 1% of the national base beneficiary premium for each month you delayed.
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Medicare supplement plans
If you have Medicare and other health insurance, such as from an employer or union, military coverage, or Medicaid, you are considered to have multiple insurance policies. In this case, each type of coverage is called a "payer." The "primary payer" pays up to the limits of its coverage and then sends the remaining balance to the "secondary payer." If the secondary payer does not cover the remaining balance, you may be responsible for the remaining costs.
Medicare Supplement Insurance, also known as Medigap, is extra insurance that you can purchase from a private health insurance company. It helps cover your share of out-of-pocket costs in Original Medicare. Medigap policies are standardized, and in most states, they are named by letters, like Plan G or Plan K. The benefits offered by each lettered plan are the same, regardless of the insurance company. The price is the only difference between policies with the same letter sold by different companies.
Medigap policies generally do not cover long-term care, such as nursing home stays, vision, dental, hearing aids, private-duty nursing, or prescription drugs. However, some Medigap policies offer coverage when you travel outside the United States. To purchase a Medigap policy, you typically need to have both Medicare Part A (Hospital Insurance) and Part B (Medical Insurance). Most people get Part A for free, but some individuals have to pay a premium.
If you do not buy a Medigap policy within six months of when you first get Part A and Part B, you may face difficulties purchasing a policy, or you may have to pay a higher price. Additionally, if you are under 65, you may not be able to purchase a Medigap policy, or you may have to pay more.
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Frequently asked questions
It depends on how you are receiving your current insurance. If you are receiving employer-sponsored health insurance through your job or your spouse's job when you turn 65, you may be able to keep your insurance until you or your spouse retires.
If you are paying a premium for Part A (Hospital Insurance), you can drop Part A and Part B and get a Marketplace plan instead. However, if you choose to enroll in Medicare Part A and keep your Marketplace coverage, you will have to pay the full price for your Marketplace plan.
Supplemental insurance is advisable for those with Medicare to help cover out-of-pocket costs and gaps in coverage. Medicare supplement plans (Medigap) cover Medicare's cost gaps, and you can choose from standardized plans balancing coverage and premiums.
