The Ultimate Guide to Medicare Eligibility

When a person reaches the age of 65, they become eligible for the Medicare insurance program. For most Americans looking forward to receiving Medicare health benefits, eligibility is as simple as turning 65.

However, your eligibility to get Medicare coverage without paying a premium – and your eligibility for different Medicare plans – is determined by several factors. It includes your health status and work history. Here’s what you should know:

Am I Eligible for the Medicare Part A Coverage?

Typically, you’re eligible for Medicare Part A if you are 65 and have been a legal citizen of the U.S. for at least five years. In reality, if you’re already receiving Railroad Retirement and Social Security benefits. In that case, the local government agencies will automatically register you in Medicare Part A without any cost when you reach the age of 65. 

Scenario 1: If you get Railroad Retirement and Social Security Benefits

Suppose you already receive Railroad Retirement and Social Security benefits. In that situation, all you have to do is check your mail for your insurance card. It will arrive three months before your 65th birthday (or the 25th month of your disability if you get approved for Medicare due to impairment conditions rather than age). The card will come with the option to waive Part B (see below). But this is only a good idea if you are still working and have employer-sponsored coverage that provides the same or better coverage or if your partner is still working and their plan covers you.

Scenario 2: What if you do not receive Railroad Retirement and Social Security Benefits?

Suppose you are not already obtaining Railroad Retirement or Social Security benefits. In that case, you must enroll in a Medicare plan during a seven-month open enrollment period that includes the three months before your 65th birthday, the month in which you reach age 65, and three months after your 65th birthday. If you sign up before the month you turn 65, your benefits will begin the month you turn 65 (or the month before if your birthday is on the first of the month). If you register three months following your 65th birthday, your coverage may have a delayed effective date.

Scenario 3: Medicare Eligibility due to Disability

Aside from turning 65, applicants can become eligible for Medicare due to a disability (eligibility for Medicare begins after two years of receiving Railroad Retirement or Social Security disability benefits) or due to amyotrophic lateral sclerosis (ALS), or end-stage renal disease (ESRD). 

People with ESRD disease become eligible for Medicare plan on the 4th month of dialysis treatment or sooner if they take a home dialysis course. People with ALS get eligible for Medicare coverage the same month they begin receiving their disability benefits (and there is no longer a five-month waiting period for these benefits to start after a patient is diagnosed with ALS). 

Get Medicare Part A without Premiums

Most participants don’t have to pay a premium for Medicare Part A. You can get Part A coverage at no cost if:

• You are over age 65, and your spouse have paid Medicare taxes for at least ten years.
• And you are not yet 65, but you are disabled and have paid Medicare taxes for at least ten years. After two years of receiving SSD benefits, you will be eligible for Medicare, without any Part A premiums. Note that the two-year waiting period doesn’t apply for people with ALS or ESRD. In the case of a special child, Medicare eligibility is determined by the parent’s work history, which can continue even after the child has reached adulthood.

If you (or your family member) haven’t paid Medicare (FICA) tax bills for at least ten years, you can still buy Part A coverage, but you’ll have to pay the insurance premium, which depends entirely on your work history. If you have paid into Medicare (FICA taxation) for less than 7.5 years, your monthly premium in 2021 will be $471, and $259 if you’ve paid into Medicare for at least 7.5 years but less than ten. These amounts are expected to be $499 and $274 in 2022, respectively. 

Am I Eligible for the Medicare Part B Coverage?

When you receive notification that you are eligible for Medicare Part A coverage, you will also be informed that you’re qualified for the Part B plan—which is optional and requires a monthly premium for all applicants.

Medicare Part B Premiums

Part B costs $148.50 per month for most enrollees in 2021, but it costs more if your income exceeds $88,000 (or $176,000 for a married couple; remember that these amounts were recorded for inflation starting in 2020). The standard Part B premium is expected to be $158.50 per month in 2022, with the high-income threshold growing to $91,000 for a single person and $182,000 for a couple. 

It is critical to register for both Part A and Part B. You have an enrollment window that lasts seven months. (In most cases, it begins three months before your 65th birthday and stays for three months afterward). While you can sign up in the three months following your 65th birthday, it’s best to enlist in Part B coverage as soon as possible, or you may have gaps in your health insurance. If you wait too long, you might be locked out of Part B and forced to wait until the next enrollment period.

If you don’t apply during your initial window, you won’t drop Part B eligibility. However, once you register, you will be penalized with a higher premium, which will increase by 10% for each year you are eligible but do not sign up for Part B. Remember, there is no penalty if you delay Part B because you are insured by your company’s plan or your spouse’s employer. The GEP (General Enrollment Period) for Medicare A and B plan runs from January 1 to March 31 every year, with coverage beginning on July 1 — with a higher premium if the late enrollment penalty applies.

How do I get Eligible for the Medicare Advantage Plan?

If you qualify for Medicare benefits, you must decide whether to receive them through the government’s Original Medicare program or Medicare Advantage. The vast majority of Medicare beneficiaries accept Original Medicare. Still, more than four out of every ten are enlisted in Medicare Advantage plans. Moreover, the Advantage plan registration has been steadily increasing at a faster rate than overall Medicare enrollment.

To enroll in the Medicare Advantage plan, you need to be eligible for (or have) both Medicare Part A and Part B coverage. You can choose a plan during your initial enrollment period — the seven months preceding the month you meet the requirements for Medicare. Note that there are some background areas of the country where Medicare Advantage programs are not available—you need to be the resident of that area where Advantage plans are offered to enroll in one.  

Most Medicare Advantage plans cover Part D prescription drug coverage. If you purchased a Medicare Advantage coverage, you typically obtain your Part D services along with your hospital and health benefits in a single package. However, the maximum out-of-pocket threshold for the M.A. plan (not greater than $7,550 in 2021) does not support the cost of prescription drugs.

Patients with ESRD are eligible for the Medicare program but were previously ineligible for most Medicare Advantage coverages. Nonetheless, in 2021 this criterion has been changed under the terms of the 21st Century Cures Act. People with ESRD would have the same access to Medicare Advantage coverages as other Medicare beneficiaries beginning in 2021.

When can I Sign Up for Medicare Part D?

To be qualified for Medicare Part D (prescription drug coverage), you must have either Part A or Part B coverage, or both. You can enroll in Medicare Part D when you sign up for Medicare Part A or B.

As previously stated, most people who choose Medicare Advantage should first obtain their Part D prescription benefits through the same Medicare Advantage plan (89 percent of all Medicare Advantage plans support Part D coverage in 2021). Part D coverage is not included in Medicare Savings Account (MSA) plans or Private Fee-for-Service (PFFS) health plans. If your MSA or PFFS plan does not provide Part D coverage, you may purchase a stand-alone Medicare Part D program to supplement it.

Furthermore, you might get approval for Part D prescription drug coverage if you don’t register when you first qualify. Still, you need to pay higher premiums if you register later unless you have credible coverage from another plan during the period that you have delayed your registration in Part D coverage.

Who is Eligible for Medigap Coverage?

If you are enrolled in Medicare (Parts A and B) but do not receive Medicare Advantage or Medicaid benefits, you may apply for a Medigap policy. These plans are designed to cover all or a portion of your out-of-pocket expenses when you have a Medicare coverage claim (i.e., they pay some or all of your deductible and coinsurance). 

You have a federal right to purchase a Medigap plan for six months after enrolling in Part B and reaching the age of 65. This is your open enrollment period for Medigap insurance. After this period expires, you will have only a few options for purchasing one in the future.

Some states allow applicants of any age or health condition to buy the Medigap plan throughout the year (or during a specific enrollment window) without a medical subscription, but most do not. In many regions, Medigap coverages may not be accessible to people who have Medicare before 65. Thirty-three states require Medigap programs to be guaranteed in at least certain circumstances when a candidate is under 65, but the standards vary from state to state; you can click a state to learn more about state-based Medigap rules.

Suppose you’re enrolling in Medicare coverage due to your age. In that case, the main factor affecting your ability to purchase a Medigap policy – regardless of your health status – would be whether you sign up during the Medigap open enrollment window. 

And suppose you don’t register during your Medigap enrollment period. In that situation, carriers in most regions can use their medical records to determine eligibility and set your premium rates if you apply for coverage afterward. More information on Medigap plan eligibility and enrollment can be found here. 

Medicare Eligibility: The Major Takeaways

• You become eligible for Medicare Part A if you are 65 and have lived in the U.S. state for at least five years.
• When you’re informed you’re qualified for Part A, you will be notified that you get approved for Medicare Part B.
• You need to be eligible for Part A and Part B coverage to sign up for the Medicare Advantage plan.
• To be eligible for Part D prescription coverage, you must have either Medicare Part A or Part B, or both.
• You can purchase a Medigap policy if you are enlisted in Medicare Part A and B and do not receive Medicare Advantage or Medicaid health benefits.