10 Things You Didn’t Know About Medicare

How the nation’s health insurance coverage for older adults and people with disabilities works

Dena Bunis and Kimberly Lankford,

AARP

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En español

Published October 24, 2023

/ Updated October 11, 2024

illustration of a medicare insurance card surrounded by elements of healthcare including x rays prescription drugs a calculator and stethoscope

KOTRYNA ZUKAUSKAITE

Key takeaways

Medicare covers millions of Americans, but you have several options.
There is a late penalty if you miss deadlines, but you can delay if still working.
You enroll through the Social Security Administration.
You have to pay premiums and copayments, but you could get financial help.
It’s not a family plan and it doesn’t cover everything, including foreign travel.
You can change plans each year.

Ever since President Lyndon Baines Johnson signed Medicare into law in 1965, hundreds of millions of Americans have relied on this program to help pay for their medical care.

Today more than 67.4 million Americans are enrolled. Of those, more than 60 million are 65 and older, and 7 million are younger people with disabilities.

Medicare has evolved through the years. Part A and Part B, called original Medicare, were included in the 1965 law. In 1997, Congress officially created Part C, now known as Medicare Advantage, the private insurance alternative to original Medicare. And in 2003, lawmakers added Medicare Part D, which covers prescriptions.

Here are answers to some frequently asked questions about Medicare. Detailed information on Medicare eligibility, enrollment and coverage can be found in AARP’s Medicare Made Easy series.

1. You have options

Medicare has four basic parts: Part A covers inpatient stays in a hospital or skilled nursing facility, hospice and some home care. Part B covers doctor visits, diagnostic tests and other outpatient services. Part C, Medicare Advantage, includes coverage for Part A and Part B, but with different copayments than original Medicare; some plans offer additional coverage. Part D covers prescription drugs.

When you sign up for Medicare, you’ll have to choose between enrolling in original Medicare or a Medicare Advantage plan.

If you pick original Medicare, you’ll need to enroll in a Part D prescription plan if you don’t have other drug coverage. You also should consider buying a supplemental Medigap policy, which will help pay for your out-of-pocket costs.

If you decide to go with Medicare Advantage, you’ll have to choose the right plan for your needs. These plans typically provide health care and drug coverage and may cover dental, hearing and vision care.

But each plan can have different coverage and costs. Medicare Advantage plans have provider networks, which means you may pay more or have no coverage if you use out-of-network doctors.

2. You could pay more if you enroll late

Medicare has a seven-month initial enrollment period for people turning 65. It starts three months before the month you turn 65 and ends three months after your birthday month.

Unless you or your spouse are working and you have health insurance from that employer, you usually need to sign up for Medicare Part B during that enrollment window or you’ll be subject to a late enrollment penalty for as long as you’re on Medicare. You also have to sign up for Part D coverage within certain time frames if you don’t have similar drug coverage or you’ll have to pay a separate late enrollment penalty.

3. You don’t have to sign up at 65

While the Medicare eligibility age is 65, you may not have to sign up then if you or your spouse are still working and you have health insurance through that employer. However, even if you have job-based insurance, an employer may require that you enroll in Medicare at 65 and use its insurance to fill any gaps in Medicare.

The rules vary by company size. Contact your employer.

Also, if you get health insurance through an Affordable Care Act (ACA) marketplace, you’ll have to sign up for Medicare when you turn 65. The same goes if you:

Are covered under COBRA, which extends a former employer’s coverage.
Have the military’s Tricare insurance.
Or take part in a retiree health plan.

However, special rules apply for retired federal employees covered under the Federal Employees Health Benefits program.

4. You enroll in Medicare through Social Security

The Social Security Administration (SSA) handles Medicare enrollment. You can sign up online. You can also go to your nearest Social Security office or call SSA at 800-772-1213.

You can enroll in Part A and Part B through SSA even if you aren’t ready to sign up for Social Security benefits yet. But if you want a Medicare Advantage plan or a Part D prescription drug plan, you’ll need to sign up for those plans through a private insurer.

You can enroll through the Medicare Plan Finder, where you can compare all plans available in your area. For assistance, call the Medicare hotline at 800-633-4227 or contact your local State Health Insurance Assistance Program (SHIP).

5. Medicare isn’t free

While Medicare pays the lion’s share of enrollees’ medical costs, the program is not free.

In addition to monthly premiums, you’ll be subject to copays and coinsurance costs for services such as doctor visits, diagnostic tests, hospital stays and prescription drugs. How much you pay will depend on which Medicare option you choose — original or Medicare Advantage — and the specific plan.

6. Financial assistance is available to help with costs

Depending on your income, the government offers several programs to help you afford your Medicare out-of-pocket costs.

You might qualify for Medicaid, the federal-state program for people with lower incomes. If you do, Medicaid will pick up many of Medicare’s out-of-pocket costs.

Medicare also has a number of savings programs that can assist, including Extra Help, which is solely for prescription drugs.

7. Medicare doesn’t offer a family plan

Each Medicare beneficiary needs to enroll on his or her own. Everyone must sign up individually when they become eligible. The same applies for supplemental insurance you may choose to purchase.

8. Medicare doesn’t cover everything

Medicare covers a lot of preventive care and most medical services associated with illnesses. But original Medicare doesn’t pay for dental, hearing and vision care, cosmetic surgery and other services.

9. Medicare coverage doesn’t extend outside the U.S.

For the most part, Medicare doesn’t cover you outside the United States.

It has a few exceptions — if you have a medical emergency while you’re in the U.S. but the nearest hospital is across the border. A Medigap policy may provide some coverage for foreign travel emergency care.

10. You’re not stuck with the same plan forever

Every fall — from Oct. 15 to Dec. 7 — beneficiaries can review their Part D or Medicare Advantage coverage and decide if they want to make changes.

This annual open enrollment period is a time to review your prescription plan and make sure the medications you take are covered and affordable. If you have Medicare Advantage, you can switch plans during open enrollment if you find another plan that includes your providers or has better coverage and costs for your drugs and health care needs.

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Dena Bunis covered Medicare, health care, health policy and Congress. She also wrote the “Medicare Made Easy” column for the AARP Bulletin. An award-winning journalist, Bunis spent decades working for metropolitan daily newspapers, including as Washington bureau chief for the Orange County Register and as a health policy and workplace writer for Newsday.

Kimberly Lankford is a contributing writer who covers Medicare and personal finance. She wrote about insurance, Medicare, retirement and taxes for more than 20 years at Kiplinger’s Personal Finance and has written for The Washington Post and Boston Globe. She received the personal finance Best in Business award from the Society of American Business Editors and Writers and the New York State Society of CPAs’ excellence in financial journalism award for her guide to Medicare.