“Here are the vital parts of Medicare, the costs, the eligibility rules and the consequence of missing the enrollment deadline.”
Medicare was enacted in July 1965, as part of Title XVIII of the Social Security Act.
Think Advisor’s article, “Essential Medicare Facts & Penalties Advisors Should Know on One Page,” says that 53 years later, Medicare has four parts. They are Part A: Hospital, Part B: Outpatient Services, Part C: Medicare Replacement, and Part D: Prescription Drugs.
As a general rule, if you are 65 and you or your spouse have paid Medicare taxes for at least 10 years, you may enroll in the program. Those under 65 may also enroll, if they are disabled or have end stage renal disease.
Let’s look at the different parts of Medicare:
Part A is free for most people. If you didn’t pay Medicare taxes, you may be able to enroll and pay for Part A. If you’re under 65 and didn’t pay into Medicare, you may be eligible if you have been entitled to Social Security or Railroad Retirement Board disability benefits for 24 months or you are a kidney dialysis or kidney transplant patient.
Everyone is required to pay a premium for Medicare Part B, which is deducted from your Social Security retirement payment. If you’re eligible but haven’t yet begun to receive a Social Security retirement benefit, Medicare will send you a bill.
Part C is also known as a Medicare Advantage plan. It’s issued by a Medicare-approved private insurer. Even if you choose Medicare Part C, you still are required to pay a Part B premium. Although these plans cover all services in Part A and Part B, they frequently have other benefits like vision, dental, hearing, and prescription drugs.
Part D covers prescription drugs. Each Medicare drug plan list its approved drugs and a “tier” for them. A lower tier drug will generally cost less, and a higher tier drug will cost more.
The window to enroll in Medicare starts on the first day of the third month prior to your birth month and ends on the last day of the third month following the month of your birth.
In addition, there’s a separate “late-enrollment” penalty for Part B and Part D.
Reference: Think Advisor (July 31, 2018) “Essential Medicare Facts & Penalties Advisors Should Know on One Page”