Medicare Open Enrollment – Understanding Medicare Coverage

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Last Updated:Nov 16, 2024

Medicare Open Enrollment – Understanding Medicare Coverage

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October 15 is the official date to begin enrollment in Medicare, and for every person in the U.S. ages 65 and up, this is a required application. Those already enrolled in Medicare should know the ins and outs by now. For all of you newcomers: Welcome to the 65+ club. Medicare can be confusing to first-timers. Use this article to help you navigate the enrollment and understand all of the terms and programs associated with Medicare.

In this article

What is Medicare?

Medicare is the government's insurance program for people 65 or older and people with disabilities or chronic conditions. As retirement age is generally considered to be at age 65, this federally funded program helps with medical costs after losing health insurance from employment. However, even if you are still working at 65 and older and have insurance, you must complete Medicare enrollment, and some of its programs can help.

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What are the different parts of Medicare?

You may hear the terms Part D, Part A, etc. tossed around. These are different parts of Medicare, and each has its purpose. The following are the four different parts of Medicare coverage, as well as supplements.

Medicare Part A

This coverage manages hospitalization and bills associated with hospital care. This coverage includes hospice care for anyone terminally ill.

Medicare Part B

This coverage manages your medical care through your doctor and outpatient services. This coverage includes general health care and preventative needs, tests and screenings, and required medical supplies.

Medicare Part C

Also referred to as the Medicare Advantage plan is a health plan option through private insurance companies. Companies must be approved, and within these programs, everything covered in parts A and B are covered here.

Medicare Part D

This coverage manages the costs of prescriptions, including copayments. Under the Medicare Formulary is the full cost of drugs covered under the program, so you can work with your doctor to use drugs that fall into the prescription drug plan.

Medigap

This isn't a "part" but is still under Medicare's coverage. As the name implies, this is a supplement to expenses not covered by the other parts of Medicare, filling the gap. This coverage is offered through private companies and individual states and is also referred to as a Medicare Supplement Plan.

Medicaid

While Medicare is a federal insurance program, Medicaid is a state health insurance assistance program for low-income people. This program helps to lower the costs of Medicare, with coverage options and costs varying state by state.

Original Medicare

This term often refers to Medicare Part A and Part B.

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The costs of Medicare

Medicare.gov provides a costs at a glance chart for 2025.

Plan	Costs
Part A premium	Most people don't pay a monthly premium for Part A (sometimes called "premium-free Part A"). If you buy Part A, you'll pay up to $518 each month in 2025. If you paid Medicare taxes for less than 30 quarters, the standard Part A premium is $518. If you paid Medicare taxes for 30-39 quarters, the standard Part A premium is $285.
Part A hospital inpatient deductible and coinsurance	You pay: $1,632 deductible for each benefit period; days 1-60: $0 coinsurance for each benefit period; days 61-90: $419 coinsurance per day of each benefit period; days 91 and beyond: $838 coinsurance per each "lifetime reserve day" after day 90 for each benefit period (up to 60 days over your lifetime); and all costs beyond lifetime reserve days.
Part B premium	The standard Part B premium amount is $185 (or higher depending on your income).
Part B deductible and coinsurance	$257. After your deductible is met, you typically pay 20% of the Medicare-Approved Amount for most doctor services (including most doctor services while you're a hospital inpatient), outpatient therapy, and durable medical equipment (dme)
Part C premium	The Part C monthly premium varies by plan. Compare costs for specific Part C plans.
Part D premium	The Part D monthly premium varies by plan (higher-income consumers may pay more). Compare costs for specific Part D plans.

How to enroll in Medicare

If you have retired or have an illness that has you receiving social security benefits, you are automatically enrolled in Medicare through the Social Security Administration.

For others, you will receive notices about Medicare in the mail. These will explain coverage, costs and services.

This is also when private companies will begin to send you marketing materials on their programs so you can research and consider them.

As you review all the options of an employer's healthcare, including coverage costs, co-payment fees, prescription drug coverage, and more, you'll have a chance to do the same with Medicare once enrollment opens. You have until December 7 before Medicare open enrollment ends, so use the time to carefully review your options and what sort of coverage you feel you may need in the next year. The coverage goes into effect on January 1.

Medicare.gov provides care providers, formularies and other information you need about health plans, deductibles, premiums and more. There is also a way to reach someone in your area to answer questions.

Penalties

If you do not enroll in Medicare when you are first eligible, your costs could increase 10%. Medicare charges twice the number of years you could have been enrolled and didn't sign up.

If you (or your spouse) have health insurance through an employer-sponsored group health plan, you do not need to enroll in Medicare. You can wait until retirement or lose coverage without waiting for the open enrollment period. However, if you have insurance not defined by the IRS (self-employment, COBRA, or an employer with less than 20 employees for example), you could pay the penalty if you do not enroll.

To be sure you will not have any penalties, speak to someone within Medicare during the initial enrollment period.

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The bottom line

Medicare's annual enrollment period runs October 15 through December 7, providing health coverage for the following year to people 65 and older and those with disabilities or chronic conditions. Money may be tight throughout retirement, but this government-funded insurance plan will save your pocket costs in the long run. Be sure not to miss out and enroll to save money on drug costs, doctor's visits, hospital stays, medical tests, and more.

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Lissa Poirot is an award-winning journalist and editor with a focus on finance, travel and health. Her work has appeared online and in print, and she has often been cited as a source on both. She currently resides in Pennsylvania.

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