We often jump right into explaining the Medicare program and all your options without going over the fine print of eligibility. Who is eligible to enroll in Medicare? When do you qualify for Medicare? These are all important questions that must be answered because they impact the how and when of enrollment. Certain requirements must be met to qualify for Medicare.
Medicare Eligibility Requirements
Are you eligible for Medicare? Generally speaking, you qualify for Medicare if you meet three basic criteria.
- Medicare Eligibility Age: You must be 65 or older (some people under 65 years of age qualify due to certain disabilities)
- Residency is: You must be a U.S. citizen or a permanent legal resident who's been in the United States for at least five years
- Tax Payment: You must have worked 10 years AND paid Medicare taxes.
More specifically for the second eligibility requirement, you must be either a U.S. citizen, or be an alien who has been lawfully admitted for permanent residence and has been residing in the United States for five continuous years prior to the month of filing a Medicare application.
If you do not qualify on your own merit and are married to someone or have an ex-spouse who does, you may be able to qualify for Medicare from their status. If you’re unsure about your eligibility based on these criteria, you can contact your local Social Security office for more details. The federal Medicare website also has an Eligibility Checker Tool you can use.
Is Medicare Eligibility Based on Income?
There are no income limits to receive Medicare benefits, however, you may pay more for your Medicare premiums based on your income level. High wage earners pay a higher premium for Medicare Part B and Medicare Part D.
This additional monthly charge is called IRMAA- Income-Related Monthly Adjustment Amount. Your income is based on your wages (including tips), income from businesses/investments, interest earned, unemployment benefits, and alimony.
Is Medicare Free?
The purpose of the Medicare program is to help older Americans balance healthcare costs.
However, one of the most common misconceptions is the misunderstanding that Medicare is free.
When you turn 65, if you have worked at least 10 years, or 40 quarters, paying into Medicare taxes, and are eligible based on the other qualifying factors, you qualify for premium free Medicare Part A. Medicare Part B requires the payment of monthly premiums.
How do You Know if you are Eligible for Medicare Part A?
Medicare Part A covers hospital insurance. Most people obtain Medicare Part A at no cost, but some must pay a premium for this coverage. To be eligible for premium-free Medicare Part A, you must have a specified number of Quarters of Coverage (QC) and file an application for Social Security or Railroad Retirement Board (RRB) benefits.
Quarters of Coverage are earned through payment via payroll taxes under the Federal Insurance Contributions Act (FICA) during your working years. Most people pay the full FICA tax so the QCs you earn can be used to meet the requirements for both your monthly Social Security benefits and premium-free Medicare Part A.
NOTE: Certain Federal, State, and local government employees pay only the Medicare Part A portion of the FICA tax. The QCs earned can then only be used to meet the requirements for premium-free Medicare Part A; and may not be used to meet the requirements for monthly Social Security benefits.
How to Enroll in Medicare Part A?
If you are already receiving Social Security or RRB benefits at least 4 months before being eligible for Medicare and residing in the United States (except residents of Puerto Rico), you are automatically enrolled in both premium-free Medicare Part A and Medicare Part B.
If you live in Puerto Rico, you are eligible for automatic enrollment in premium-free Medicare Part A only and NOT enrolled in Medicare Part B.
If you are NOT receiving a Social Security or RRB benefit, you are NOT automatically enrolled. You must manually apply for Medicare by contacting Social Security or filling out a Medicare application online.
What if I am Automatically Enrolled in Medicare and I Don't Want it?
If you are automatically enrolled in Medicare (receiving Social Security or RRB benefits at least 4 months before being eligible for Medicare and residing in the United States) you have the choice to keep or refuse your Medicare Part B coverage.
People living in Puerto Rico who are eligible for automatic enrollment are only enrolled in premium-free Medicare Part A; and must actively enroll in Medicare Part B to get this coverage.
If you previously refused Medicare Part B, or terminated your Medicare Part B enrollment, you may enroll (or re-enroll) in Medicare Part B only during certain enrollment periods.
In most cases, if you do not enroll in Medicare Part B when you are first eligible, you will have to pay a late enrollment penalty (LEP) for as long as you have Medicare Part B.
Beware the Late Enrollment Penalty (LEP) for Medicare Part B
If you did not enroll in Medicare Part B when you first became eligible, you may have to pay a Late Enrollment Penalty (LEP) for as long you have Medicare. Your monthly premium for Medicare Part B may go up 10% for each full 12-month period you could have had Medicare Part B but did enroll in it.
For more details on what the different parts of Medicare cost, check out our blog on How Much Does Medicare Cost?
Who is Eligible for Medicare Part B
Medicare Part B covers medical insurance (think doctor’s visits, tests, outpatient care, etc.). The eligibility rules for Medicare Part B depend on if you are eligible for premium-free Medicare Part A or if you must pay a premium for your Medicare Part A coverage.
If you are eligible for premium-free Medicare Part A, you are also eligible to enroll in Medicare Part B once you are entitled to Medicare Part A. Keep in mind, enrollment in Medicare Part B can only happen at certain times.
The Medicare Program Isn't One of the Easiest to Understand
There are a lot of different parts and factors determining eligibility, how much you’ll pay, and what parts of the program make sense for you. Like we explained about Medicare Part B, making a mistake in enrollment, or determining eligibility can result in a gap in your health coverage, and a costly lifelong premium penalty.
Working with an independent Medicare agent like Medicare Dana can save you hundreds or even thousands of dollars as well as hours of your time!
You don’t have to understand every aspect of the Medicare program because that’s our job. Let us do it for you.
It doesn’t cost anything to work with us; so what are you waiting for? If you’ve got questions about eligibility, the different parts of Medicare, or what it costs, please give us the opportunity to meet with you.