Medicare is a health insurance program provided by the U.S. government for people ages 65 plus, as well as younger people with certain disabilities. However, Medicare does not cover all health care costs, and you can enroll in a Medicare supplement insurance or Medicare Advantage plan to receive fuller coverage.
You do not need to be collecting Social Security to enroll in Medicare. If you are collecting Social Security when you turn 65, you will be enrolled in Medicare Part A automatically. However, you will still need to sign up for Part B, and this will start your initial six-month Open Enrollment period. Part B requires a monthly premium, and you can elect to have that premium deducted from your Social Security benefits if you choose.
Medicare is a health insurance program provided by the U.S. government for people ages 65 plus, as well as younger people with certain disabilities. Medicaid is a government health program designed specifically to help low-income people afford health care.
You can continue to be covered through your own plan or through a spouse’s/partner’s plan if you still qualify. Make sure you check with the sponsor of your existing policy.
There are times when someone may be eligible for Medicare but continues to be on an employer plan:
- You might be retired and still on your former employer’s plan
- You or your spouse/partner might still be working and on an employer’s plan
Generally, in these cases, you will sign up for Medicare Part A, but not Medicare Part B. Signing up for Medicare Part B triggers your six-month Open Enrollment period beginning the first day of the month you turn 65. You want to save thatuntil you are switching to a Medicare supplement insurance or Medicare Advantage plan.
Medicare doesn’t pay vision, dental, or hearing benefits unless they are related to a larger medical occurrence. Generally, Medicare supplement insurance plans do not offer these benefits, either. Medicare Advantage plans might contain vision, dental, or hearing benefits.
With a Medicare supplement insurance plan, your benefits will not change over time. Your premium may increase, and if your plan does not cover deductibles, the amount of those deductibles will change annually.
Medicare Advantage plans can be changed each calendar year. You can always switch Medicare Advantage plans during the Annual Enrollment Period from October 15 to December 7 each year.
Medicare is divided into separate parts (Part A, Part B, Part C, Part D). Medicare Parts A and B are handled through the government. Medicare Part C is another name for Medicare Advantage, which is optional insurance you can get through an insurance company. Medicare Part D is the drug coverage portion of Medicare.
Medicare supplement is insurance coverage that is defined by the government. There are different Medicare supplement insurance plans (Plan A through Plan N). Because Medicare supplement insurance plans are defined by the government, a specific plan, like Medicare supplement Plan F, will offer the same basic benefits no matter what company you purchase it from. (Some companies may introduce small additional features like gym memberships, but all health care benefits are the same. These additional features are not insurance benefits.)
Short Answer
Both Medicare supplement insurance and Medicare Advantage plans are coverage options for Medicare enrollees. However, the terms of applying/enrolling and coverage differ between the two, and it is important to understand the differences.
More Details
Medicare supplement insurance Plans:
- Are good for people who would rather pay higher premiums in exchange for lower costs when they do see a doctor
- Help cover the remaining portion of Medicare approved expenses that Medicare doesn’t pay
- Are standardized, meaning the basic benefits of each plan are the same regardless of the company offering it
- Do not have network restrictions
- Do have monthly premiums
- Cannot deny you coverage when you first enroll in Medicare
- Are guaranteed renewable, meaning you are covered as long as you pay the premium within the grace period (except in cases of material misrepresentation by you)
Medicare Advantage Plans:
- Are good for people who would rather pay low or no monthly premiums in exchange for costs when they do see a doctor
- Are not standardized and vary by insurance company
- Have network restrictions and often Primary Care Physicians coordinating care
- Often have copays and coinsurance
- May have low or no monthly premiums, however you must continue to pay your Medicare Part B premium
- Cannot deny you coverage when you first enroll in Medicare and each year during the Annual Enrollment Period from October 15 – December 7
You cannot always change your coverage, so it’s important to be confident in your choice. Doing research up front and understanding your plan are excellent ways to help ensure the coverage you choose is right for you.
Many people decide to either purchase a Medicare supplement insurance plan in addition to Medicare Part A and Part B or to enroll in a Medicare Advantage plan.
Medicare supplement insurance plans are required to accept people who are in their initial six-month Open Enrollment periods. However, after that, you may be denied coverage due to health conditions.
Medicare Advantage plans, on the other hand, are required to accept anyone in their initial six-month Open Enrollment period and anyone who applies during the Annual Enrollment Period from October 15 to December 7 of each year.
Your plan cannot drop you as long as you continue to pay premiums within the grace period (except in cases of material misrepresentation on your part).
Medicare supplement insurance plans cannot cancel your coverage as long as you pay premiums within the grace period (except in cases of material misrepresentation on your part).
Medicare Advantage plans are up for renewal every year, and there is a possibility your Medicare Advantage plan will not continue into the next year. In that case, you would need to find new coverage during the Annual Enrollment Period from October 15 to December 7.
If you purchase a Medicare supplement insurance plan, you can see your doctor if they accept Medicare patients. If you purchase a Medicare Advantage plan, you can see only the doctors in the plan’s network. Your current doctor may be in the plan’s network.
Generally, Medicare covers hospital expenses, physician visits, prescription drugs and skilled nursing care following a hospital stay. Outpatient prescription drugs are covered only if you have a Part D plan.
The program is divided into these four parts:
- Part A – Hospital Insurance. Think of this part as places, like a hospital, hospice or a skilled nursing facility (after a hospital stay). For most people, there is no monthly premium for this coverage. But you may have deductibles and copayment for certain hospital expenses
- Part B – Medical Insurance. Think of this part as people, like doctors or specialists. This pays for outpatient care at clinics and doctors’ offices. You pay a copay of up to 20 percent. In addition, you pay a monthly premium which is set by the federal government each year
Part A and B together are sometimes called “traditional medicare” or “original Medicare” - Part C – Medicare Advantage Program. This program delivers benefits through private managed care networks, like a Preferred Provider Organization (PPO) or Health Maintenance Organization (HMO). They include Part A and Part B benefits. They may also pay for essentials not covered by Medicare, like hearing aids and dental care. Frequently, benefits for Part D (see below) are also included
- Part D – Prescription Drugs. This pays for prescription drugs. You share in the cost with copays. This coverage is not required but is strongly recommended. You sign up for it with a private insurance company that is paid by Medicare
Medicare does not cover outpatient prescription drugs. So you will want to sign up for Part D Prescription Drug coverage. If you do not have creditable coverage, you will need to purchase a Part D plan from an insurance company. Note that this is separate from a Medicare supplement insurance plan. Many Medicare Advantage Plans include Part D coverage.
It is important to always either have creditable coverage or a Part D plan once you turn 65. If you are covered under an employer or spouse’s/partner’s employer plan, you will be notified if what you have is creditable coverage. If you will not have creditable coverage upon turning 65, you should enroll in a Part D plan. Skipping Part D enrollment means you will need to pay a monthly penalty if you ever do decide to enroll in Part D.
If you purchase a Medicare supplement insurance plan, you will need to purchase a separate Part D plan.
If you enroll in a Medicare Advantage plan, it may already include prescription drug coverage.
Medicare is for people who are age 65 and older. In some instances, Medicare also covers younger people with disabilities.
When you apply for Medicare, you’ll sign up for:
- Part A (Hospital Insurance). It will coordinate with any existing coverage you have
- Part B (Medical Insurance). If you elect to enroll in Part B, it will trigger your six-month Open Enrollment period beginning the first day of the month you turn 65. This is the time when you can apply for Medicare supplement insurance coverage regardless of your health history. After that time, you may be denied based on your health
Or you can turn it down and enroll in Part B later. Usually this is used if you are still working and are covered under a group plan. If you choose not to take it for another reason, you may have to wait until the next enrollment period and pay a late enrollment penalty every year. You may not be covered under another plan if you have Part B.
If you want a Medicare Advantage policy, you should still sign up when you enroll in Part B. However, with Medicare Advantage there is an Annual Enrollment period from October 15 to December 7. Remember that Annual Enrollment and Open Enrollment are not the same thing.
You can enroll in Medicare starting three months prior to the month of your 65th birthday and extending for three months after the month of your birthday.
(If your birthday is on the first of the month, you can enroll beginning four months prior to the month of your 65th birthday but only two months after the month of your birthday).
Missing your Medicare enrollment can have serious consequences. If you do not sign up for Part B and do not have health coverage after becoming eligible for Part B, you will pay a penalty if you ever do get Part B. The penalty lasts as long as you have Part B.
Also, signing up for Medicare supplement insurance, Part D, and Medicare Advantage plans is impacted by when you enroll in Medicare. After enrolling in Medicare, be sure to sign up for any other coverage you need.
Age 65 is the trigger to enroll in Medicare. You can enroll as early as three months before your 65th birthday or as late as three months after you turn 65. If your birthday falls on the first of the month, you can enroll four months prior to your birthday and up until two months afterward.
You should generally enroll in Medicare Part A at age 65. However, you may want to delay enrolling in Part B of Medicare if you still have other health coverage through an employer, a spouse’s/partner’s employer, or another source.
Part D plans are plans from insurance companies which cover prescription drug expenses. If you purchase a Medicare supplement insurance plan, you will need to purchase a Part D plan separately. However, if you enroll in a Medicare Advantage plan, Part D coverage may already be included.
It is important to always either have creditable coverage or a Part D plan once you turn 65. If you are covered under an employer or spouse’s/partner’s employer plan, you will be notified if what you have is creditable coverage. If you will not have creditable coverage upon turning 65, you should enroll in a Part D plan. Skipping Part D enrollment means you will need to pay a monthly penalty if you ever do decide to enroll in Part D, as long as you have Part D.