Medicare Starter Guide
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-Andy Stroman
Medicare is a federal health insurance program primarily for people 65 and older. It consists of several parts:
Original Medicare
There are 2 main parts of Medicare: Part A and Part B. They were the original parts of Medicare when it started in 1965. Unsurprisingly, the combination of Part A and Part B is often called Original Medicare. Think of Original Medicare as the foundation of your coverage. You may be familiar with the term “major medical coverage” which is another good description of Original Medicare. Everyone who enrolls in the program needs to start with at least Part A and Part B.
Part A (Hospital Insurance)
Covers inpatient hospital stays, skilled nursing facility care, hospice, and some home healthcare.
Part B (Medical Insurance)
Covers outpatient care, doctor visits, preventive services, and some home health care.
What Original Medicare does not cover
Elective procedures/surgeries, routine dental and vision care, prescription drugs.
Private insurance plans to complete (or replace) Original Medicare
While Part A and Part B cover a lot of services, they do not cover 100% of the costs. With Original Medicare alone, you’ll be on the hook for about 20% of major medical expenses with no limit to that amount. Additionally, Original Medicare does not cover prescription drugs.
The other parts of Medicare fill the gaps in coverage left by Part A and Part B.
Part C (Medicare Advantage)
An alternative to Original Medicare, insured and sold by private health insurance companies like Aetna, Humana, UnitedHealthcare, and others.
Part D (Prescription Drug Coverage)
Helps cover the cost of prescription medications, insured and sold by private health insurance companies. Most Medicare Advantage plans include Part D coverage. You can purchase Part D coverage on a standalone basis if you don’t have a Medicare Advantage plan.
Medigap (Medicare Supplement)
If you prefer to keep Original Medicare, you can buy one of these private insurance plans that reduces your share of covered medical expenses to almost nothing. There are a few types of Medigap plans, including the most popular two: Plan G and Plan N.
Turning 65
If you don’t have health coverage through a large employer (20 or more employees), you should enroll in Medicare at age 65.
You have a 7-month Initial Enrollment Period (IEP) to enroll in Part A and Part B, which starts 3 months before your 65th birthday and ends 3 months after. It’s a good idea to get the enrollment done as soon as your IEP starts. That way your Medicare coverage can start on the earliest possible date, which is the 1st day of your 65th birth month. So, if you were born in July, your IEP is from April 1 through October 31, and coverage starts on July 1 if you enroll sometime between April and June.
If you enroll during your 65th birth month or during the last 3 months of your IEP, coverage will start on the 1st of the month after you enroll.
If you miss your IEP and don’t enroll during those 7 months, you will pay a permanent late enrollment penalty when you do enroll. You are exempt from the penalty if you have health coverage from an employer with 20 or more employees (see below).
Note: If you were born on the 1st of the month, your IEP starts 4 months before your 65th birthday and ends 2 months after. Your earliest Medicare start date is the 1st of the month before your 65th birth month. So, if you were born on July 1, your IEP is from March 1 through September 30, and coverage starts on June 1 if you enroll sometime between March and May.
Still working?
If you have employer-sponsored coverage from a company with 20 or more employees, you may delay Medicare enrollment without penalty. This coverage could be from your job or your spouse’s job. The coverage must be from active employment, not retiree or on-leave status.
When you lose this coverage from active employment, it triggers a Special Enrollment Period (SEP) which allows you to enroll in Medicare penalty-free when the employer coverage ends.
So, you have the choice of either 1) voluntarily dropping the employer coverage in favor of Medicare at age 65 or 2) waiting until you lose that employer coverage (usually due to retirement) and enrolling in Medicare at that point. In either case, you should start the Medicare enrollment process 3 months before the employer coverage’s end date. That allows enough time to get all paperwork submitted and solve any issues that come up.
Many people in this situation go ahead and enroll in Part A during their IEP at age 65. This is because Part A is free to most people, and it will act as secondary coverage for hospital expenses. However, if you have a Health Savings Account (HSA) and you want to keep contributing, you may want to delay Part A—but you’ll need to stop HSA contributions at least 6 months before enrolling in Medicare to avoid tax issues.
If you miss your enrollment period
If you miss your IEP or SEP, there is a “catch all” called the General Enrollment Period which runs from January 1 – March 31. You’ll have to wait until then to enroll, and you will pay a late penalty.
WARNING: COBRA does not count as employer coverage
When you turn 65 and lose your employer health coverage, you must enroll in Medicare immediately. COBRA is not a substitute for Medicare and doesn’t count as employer coverage. If you’re Medicare-eligible and only have COBRA, Medicare becomes your primary insurance, making COBRA secondary coverage. Without Medicare enrollment, you effectively have no primary coverage, leaving you financially exposed. If you choose to have COBRA coverage, you must enroll in Medicare at the same time. Delaying Medicare enrollment while on COBRA can result in late enrollment penalties.
Enrolling at age 65
Automatic enrollment
If you’re receiving Social Security benefits when you turn 65, Medicare enrollment happens automatically. Your Medicare card will arrive about 3 months before your 65th birthday, including both Part A and Part B coverage. Part B premiums are automatically deducted from your Social Security benefits. No action is needed unless you want to decline Part B.
Manual enrollment
If you’re not receiving Social Security benefits, you’ll need to enroll through the Social Security Administration (SSA). You have three enrollment options:
- Online enrollment (recommended): create or sign in to your my Social Security account, complete the Medicare application (takes about 10 minutes), and save your confirmation number. You can track your application status through your online account.
- Phone enrollment: call SSA at 1-800-772-1213 (TTY 1-800-325-0778). Representatives are available Monday through Friday, 8 AM to 7 PM. Best times to call are early morning or late afternoon. You will likely need to make a phone appointment at a separate time to complete the enrollment.
- For in-person enrollment, find your local Social Security office at ssn-check.org/offices. Schedule an appointment, bring any required documents, and request written confirmation of your enrollment.
Enrolling in Part A only at age 65
Follow the steps above, but only request Part A. The online method is the best way to get this done.
Delayed enrollment (after age 65)
Adding Part B when you already have Part A
Step 1: Complete Form CMS-L564 with your employer
Step 2: Apply for Part B online and upload your completed CMS-L564
Enrolling in Part A and Part B after age 65
Faxing, mailing, or walking the completed enrollment forms in to your local Social Security office is the most reliable and efficient method. You will need to schedule an appointment for in-person submission. Again, you can look up your local office’s location and contact info here: ssn-check.org/offices
Step 1: Complete Form CMS-L564 with your employer
Step 2: Complete Form CMS-18-F-5
Step 3: Complete Form CMS-40B
Submit the original completed forms to Social Security. Make a copy of each form to keep for your records.
If your local Social Security office is not responsive, you can try applying online as described above. Apply for Part A first, wait for the confirmation of Part A enrollment, then apply for Part B online. You will only need the completed Form CMS-L564, as the other forms are replaced by the online applications.
The 2 Medicare Plan Options
When enrolling in Medicare, you have two primary paths to choose from, each with distinct advantages and considerations.
Option 1: Original Medicare + Medigap Plan + Part D Plan
This traditional combination provides comprehensive coverage with maximum flexibility. By combining Original Medicare with supplemental plans from private insurers, you get:
Cost structure
- Monthly cost: $300-$350 (higher for high-income earners)
- Annual medical out-of-pocket maximum: $257 (2025)
- Predictable costs with minimal surprise expenses
Key benefits
- No network restrictions
- No prior authorization requirements
- Freedom to see any Medicare-accepting doctor (approximately 98% of U.S. doctors)
- Consistent coverage that doesn’t change year to year
Important considerations
- Requires separate purchase of Part D plan for prescription drug coverage
- Dental and vision coverage must be purchased separately
- You can buy any Medigap plan no-questions-asked when you first join Medicare, but changing plans or enrolling at a later date will require medical underwriting
Option 2: Medicare Advantage (Part C)
This alternative involves replacing Original Medicare with a private insurance plan, offering a different balance of costs and benefits:
Cost structure
- Lower monthly premiums (often about half the cost of Option 1)
- Higher out-of-pocket costs when services are used
- Annual out-of-pocket maximum: up to $9,350
Key benefits
- All-in-one coverage (typically includes prescription drugs, dental, and vision)
- Often includes additional benefits not available in Original Medicare
- Lower upfront costs
Important considerations
- Requires staying within the plan’s provider network
- Plans can change annually
- Must choose a plan that includes drug coverage if needed (cannot be purchased separately)
Making your decision
Original Medicare with a Medigap plan (Option 1) is ideal if your budget allows for higher monthly premiums. This option provides maximum flexibility in choosing healthcare providers, offers predictable and minimal out-of-pocket costs, and maintains stable coverage year after year. The consistency and comprehensive coverage make it an attractive choice for those who want to minimize future healthcare uncertainties.
Medicare Advantage (Option 2) becomes a compelling choice when lower monthly premiums are a priority. These plans work well for those comfortable with a network-based approach and who appreciate all-in-one coverage including dental and vision benefits. While you’ll need to review and potentially change plans annually, the lower upfront costs can make healthcare more accessible.
If your budget permits, starting with Option 1 (Medigap plan) provides the most comprehensive coverage and flexibility. You can always switch to Medicare Advantage later if needed. However, switching from Medicare Advantage to Medigap isn’t guaranteed and may be more difficult.
Medicare Advantage plans, while more restricted, still provide excellent coverage compared to typical employer or individual market plans. The key is understanding your chosen plan’s specific details and ensuring it meets your healthcare needs. Both options can provide quality coverage – the best choice depends on your personal circumstances, healthcare needs, and financial considerations.
Shopping for plans
Medicare has a plan comparison tool that allows you to window shop plans without entering any personal information.
It doesn’t show every detail of the market’s plans, but it’s helpful to get an idea of pricing and benefits based on your ZIP code, age, and gender.
Original Medicare + Medigap + Part D
You will have 3 ID cards: Original Medicare (red/white/blue), Medigap, and Part D.
Before you see a doctor or go to a hospital/facility, confirm that your providers accept Medicare using Medicare’s provider directory. Also check with the office or facility by asking them if they accept Original Medicare.
You do not need to ask if they accept Medigap/Medicare Supplement plans, but you will give them your plan information/ID card. Because Medigap plans pay claims “in lockstep” with Medicare, if Original Medicare is accepted, your Medigap plan is accepted, too.
For prescription drugs, you will need to look up which pharmacies are in-network with your specific plan. That’s usually available on the insurance company’s website and/or on your online member account with them.
Medicare Advantage
If you have Medicare Advantage, you typically do not need to show your standard “red, white, and blue” Medicare card. Instead, you should use the card provided by your Medicare Advantage plan. However, you may need to show your original Medicare card in certain situations, like when accessing hospice care, so it’s best to keep it readily available.
You will need to look up your providers and pharmacy in your specific plan’s directory to make sure they are in-network. That’s usually available on the insurance company’s website and/or on your online member account with them.
Most people pay no premium for Medicare Part A. Part B has a standard monthly premium of $185.00 for 2025.
However, if your modified adjusted gross income from two years ago exceeds certain thresholds, you’ll pay more through Income Related Monthly Adjustment Amounts (IRMAA). IRMAA affects both Part B and Part D premiums.
You can appeal IRMAA if you’ve had a life-changing event that reduced your income, such as retirement, divorce, or death of a spouse.
Use this Medicare cost calculator to estimate your monthly premiums based on your income.
Schedule a Free Medicare Consultation With Andy
I’ll answer your questions and offer guidance. After our meeting, I’ll send you an action plan with your specific cost estimates, timelines, plan recommendations and quotes, and instructions.