Everything you need to know about Medicare

by Tyler Abbott on February 20, 2024

Medicare is a program set up by the US government to provide healthcare coverage for people who are 65 or older, under the age of 65 and living with disability, and people with End-Stage Renal Disease (ESRD). The program was signed into law by President Lyndon B. Johnson, on July 30, 1965. 

Initially, Medicare was designed to only offer health insurance to older citizens who were under-served by the employment-linked covers available at the time. However, the program has grown to include people receiving Social Security Disability Insurance (SSDI) for a certain time and people with permanent kidney failure requiring dialysis or a transplant.

Medicare is run by a federal agency known as the Centers for Medicare and Medicaid Services.

What Are the Different Parts of Medicare?

Medicare is divided into different parts that cover different services:

Medicare Part A: Hospital Insurance

Hospital insurance covers inpatient hospital stays, hospice care, care in a skilled nursing facility, and even some home health care.

If you or your spouse paid for Medicare tax while working for a certain period (usually 10 years), you will not have to pay for this part. This is why it’s sometimes referred to as premium-free Part A.

However, if you don’t automatically qualify for premium-free part A, you can buy into it by paying a premium of up to $505 each month. If you paid Medicare taxed for between 30 to 39 quarters, you will pay a premium of $278 while those who paid for less than 30 quarters have to pay a monthly premium of $505.

Medicare Part B: Medical Insurance

Medical insurance covers certain doctors’ services, durable medical equipment like wheelchairs, walkers, and beds, outpatient care, and preventive services.

Most people have to pay a premium amount for part B. The premium in 2024 is $174.70. However, the total amount paid will differ from person to person because if the gross income reported on your IRS forms for the past two years is above a certain amount, you have to pay the standard premium and an additional Income Related Monthly Adjustment Amount (IRMAA)

Medicare Part C: Medicare Advantage

Instead of using the original Medicare, you can opt for Medicare Part C also known as Medicare Advantage. All Medicare Advantage plans must offer Part A and Part B, although they come with different pricing, rules, and restrictions. 

Medicare Part D: Prescription Drugs Coverage

This part covers part of the cost of prescription drugs including vaccines and most recommended shots. The premiums for this part differ from person to person depending on the plans they choose, but the average for 2024 is $18.50.

Under the Inflation Reduction Act of 2022, Medicare members will receive:

  • Insulin prescriptions available for $35 per month
  • A cap on out-of-pocket prescription drugs cap in medicine
  • No cost sharing for recommended vaccines for adults

Effective 2024, part D will also cover a low-income subsidy program expansion to 150% of the federal poverty level.

Who Is Eligible for Medicare?

Medicare is primarily designed for U.S. citizens above the age of 65. However, exceptions are made for younger people suffering from serious medical conditions or living with a disability. Here is a laydown of the eligibility requirements for Medicare:

People Who Are 65 Or Older

U.S. citizens and legal residents who are over the age of 65 and have lived in the United States of America for more than 5 years and have paid for at least 40 quarters of Medicare payroll taxes are eligible for Medicare. Spouses of people who have received Medicare coverage are also eligible.

The program allows eligible candidates to sign up for Medicare within seven months starting from three months before the month they turn 65 to three months after the month they turn 65. If you are interested in Medicare, it is important to keep an eye out for these dates. Failure to sign up for Medicare parts A, B, and D when you are first eligible usually results in higher premiums. 

After the initial enrollment, you can enroll for a Medicare plan each year and make changes to your coverage between October 15 and December 7 of each year.

If you are 65 or older but do not meet the eligibility criteria through your own or spouse’s work record, you can still buy into Medicare. However, you will have to pay for part A as well as the monthly premiums for parts B, and D. You can enroll for B without part A, but if you choose part A, you must also enroll in part B. You can also sign up for part D without part A or B

People Under the Age Of 65

People under the age of 65 can qualify for Medicare if they have been receiving Social Security Disability benefits. Such individuals can only activate their Medicare coverage after collecting the SSD for two years.

Medicare also offers coverage for younger citizens who receive a disability pension from the railroad retirement board and those who have been diagnosed with amyotrophic lateral sclerosis (ALS) or end-stage renal disease.

What Is Not Covered by Medicare

As beneficial as Medicare is, it does not cover some vital healthcare services. A good example is long-term care or custodial care, eye exams and glasses, most dental care including dentures, cosmetic surgery, massage therapy, and Medicare overseas.

How Do I Sign Up for Medicare and what are the enrollment periods?

Knowing when to enroll for Medicare can help you save on costs and change your plan when you need to. Each year, Medicare offers a designated window of time that you can make changes to your coverage. There are two windows of time offered, one for Original Medicare and another one for Medicare Advantage. 

The open enrollment period begins October 15 and runs through December 7 of each year. Open enrollment targets people who already have Medicare Part A and B. During this time, you can change your preferences. The changes you make will take effect on January 1 of the following year. To enroll, you must contact the Social Security Administration. You can also reach out to Trajector Disability for personalized assistance.

If you use private Medicare Advantage plans, you will have an open enrollment period from January 1 to March 31. The changes you make during this period will take effect from the 1st day of the following month. 

You can use the Medicare open enrollment period to:

  • Switch, drop, or join a Medicare Advantage plan
  • Switch from Original Medicare to Medicare Advantage
  • Add, remove, change, or enroll in Part D or Medicare prescription drug coverage 

If you miss the open enrollment period, you cannot change your plan until the next period comes along. However, Special Enrollment Periods allow you to change your preferences outside the open enrollment dates. Exceptions are usually granted if you relocate to a new home that isn’t in your current plan, you move out of a skilled nursing facility, are released from prison, or recently came back to the US after living outside the country.

If you have signed up for disability benefits from Social Security or the Railroad Retirement Board, you are automatically added to the Medicare program. You will get premium-free part A. You will also be automatically signed up for part B which you have to pay a premium for. You can opt out of part B if you don’t want it. 

Medicare Advantage Vs. Original Medicare: Which Is Right for You?

One of the most common questions people have when signing up for Medicare is whether to choose the Original Medicare plan or go for Medicare Advantage. Here is a breakdown of how the two covers compare to help you make an informed decision.

Original Medicare:

  • You can use any hospital, doctor, or healthcare provider that is enrolled in Medicare and is accepting new Medicare patients
  • It Covers Medicare Part A and Medicare Part B
  • You don’t need a primary care doctor or referrals to see a specialist
  • You pay a deductible, premiums for Medicare Part B, and co-payments or co-insurance
  • No coverage is offered for Medicare Part D

Medicare Advantage:

  • You can only use healthcare providers, doctors, and hospitals that are in the network. Using an out-of-network provider will trigger a fee
  • You get coverage plans comparable to Part A and B
  • You may need a primary care doctor and a referral to see a specialist
  • Amounts you pay out-of-pocket will vary, although your plan might include a cap for annual payment amounts
  • Your plan will likely include Medicare Part D coverage for drugs
  • The costs you incur will depend on the plan you choose. You will still pay for Medicare Part B premiums although some plans pay some or all of your Part B premium through a practice known as the Medicare giveback benefit.

What Costs Are Associated with Medicare?

For most people, you will not have to pay a premium for part A. For parts B and C, you have to pay a monthly premium, deductibles, and coinsurance.

For part A, you have to pay an in-patient deductible of $1,632 with $0 co-insurance for days 1 to 60. From days 61 to 90, you must pay a daily co-insurance of $408 per day, and from days 91 onward, you have to pay $816 daily. You also have to pay all the costs for beyond-life reserve days. 

For Medicare Part B, you will pay a standard premium of $174.70. However, if you are a high-income earner, you might pay more. You will also have to pay for 20% of all Medicare-approved costs such as outpatient therapy, doctors’ visits, and purchase of durable medical equipment. 

For Medicare Advantage, you will pay your monthly Part B premium although your plan might offer coverage for this amount. Depending on your plan, you might have to pay for additional monthly premiums although most plans don’t require this. The amount you pay for deductibles, co-payments, and co-insurance will also vary.

For Medicare Part D, what you pay will depend on your plan. For most plans, you will have to pay a premium of about $55.50 across both the basic plan D and enhanced supplemental drug coverage. You will also pay a yearly deductible of less than $545 and your co-payments and co-insurance will vary from plan to plan. If you spend $8,000 out of pocket, you will be exempted from paying for copayments and co-insurance for the rest of the year.

What Is Medicare Supplement Insurance (Medigap)?

Medigap is a health insurance program provided by private insurance companies to fill in the gaps that Medicare does not cover. Depending on the plans you choose, Medigap can cater for all or part of your co-payments, co-insurance, deductibles, and travel outside the US.

Although Medigap is issued by a private insurance company, the federal government requires them to provide standardized plans for everyone. However, the plans differ from state to state. 

To qualify for Medigap you must be above the age of 65, have original Medicare and you cannot be a member of Medicare Advantage. You will pay a monthly premium in addition to the one you pay for Medicare. Your premiums can change annually and increase as you age.

Navigating Medicare Prescription Drug Coverage (Medicare Part D)

Medicare Part D is part of the overall Medicare program that provides enhanced prescription drug coverage. If you opt into the program, you must pay for insurance from registered private providers. If you already have another insurance program that pays for prescription drugs, it would be better to stick to it rather than opting into Medicare Part D. 

If you want to opt for Part D you should do it during the initial enrollment period, otherwise you will incur a penalty fee.

Medicare Part D has a coverage gap that is often referred to as the donut hole. The donut hole kicks in after you and your insurer have spent over $5,030 in combined costs. Once you exceed this limit, you will have to pay part of your drug cost out of pocket. Depending on your plan, once you hit the $8,00 mark, Medicare Part D kicks in again.

Not all Medicare Plan D plans are the same before you choose one:

  1. list down your current prescription drug requirements, their quantities and dosage e.g. 60-day supply, 30-day supply, etc., frequency (how often you take them), and format e.g. pill ointment etc.
  2. go to the Medicare plan finder at Medicare.gov. This tool will help you find the best part D plan for you. Use this finder each year to see if there are better options you can change to.
  3. Check the monthly premium you have to pay for this plan. Keep in mind that your share of the prescription drug costs can fluctuate based on whether your drugs are generic or brand. Consider the plan’s premiums and out-of-pocket costs before you choose. 
  4. Check out the Part D’s rating. Medicare rates Part D plans from 1 to 5 stars, with 1 being the lowest rating based on customer service, customer experience, complaints, drug experience, drug safety, and pricing accuracy.

If you receive Supplemental Security Income (SSI) and are eligible for Medicare, you will also be eligible for extra help with Medicare prescription drug costs without having to file additional paperwork.

Common Medicare Myths and Misconceptions

Medicare Part B is free – Medicare Part B is not free even if you have paid social security for 10 years. You must pay premiums, deductibles, coinsurance, and copayments.

You can enroll in Medicare whenever you want – There are specific enrollment periods for Medicare. If you fail to meet eligibility within these periods you must wait for the next enrollment unless you qualify for an exception.

Medicare costs the same for everyone – The exact amount you pay will vary depending on how long you paid Social Security, the plans you opt for, and whether or not you have financial assistance.


Medicare is a federal insurance program that subsidizes healthcare for people above the age of 65. It also covers people with disability, amyotrophic lateral sclerosis (ALS), and those with end-stage renal disease and kidney failure requiring dialysis or a kidney transplant. Medicare covers offer different plans including Parts A, B, C, and D although you can also use Medigap to cover the gaps that Medicare leaves.

It is important to choose the right plans to get for your needs if you want to reap Medicare benefits and enroll within the stipulated open enrollment dates to avoid penalties and excessive out-of-pocket costs. If you would like to learn more or apply for Medicare, reach out to us today.