Of all U.S. government social programs outside of Social Security, there’s a good argument to be made that it’s the most important one.
Launched 60 years ago, Medicare provides key health care coverage for over 68 million Americans, including nearly all adults age 65 and older as well as 7 million younger people with disabilities.
Like any government program, the more recipients know about Medicare, the more value they gain. And that process starts as you approach the program’s eligibility date, which is age 65.
“Most people qualify then, provided they have lived here five years as a citizen or legal resident,” Doug Carey, founder and owner of WealthTrace, a retirement and financial planning software for consumers, told NTD News.
While this age serves as the standard threshold, younger people dealing with ALS or kidney failure are eligible sooner. “Also, those on disability for two years can be eligible early as well,” Carey noted.
Financial Costs Medicare Recipients Need to Know About
New Medicare applicants may be surprised to see how complex choosing the right program plan is, and they can easily make cost mistakes that can be difficult to fix. That’s why understanding the financial side of Medicare is so important for newly minted recipients and getting to know these potentially cost-restrictive Medicare factors.Sign-up timelines matter
If they’re not careful, Medicare applicants can make two big mistakes when considering Medicare.“First and foremost, if a beneficiary does not sign up for Medicare upon their eligibility date, there are financial penalties in the form of higher premiums which accumulate as long as the patient waits to sign up,” Kent McKinney, associate professor of health policy and management at the Joseph Mailman School of Public Health at Columbia University, told NTD.
Program plans, benefits, and cost structure can be different
One big Medicare cost issue that people may not be aware of is that Medicare premiums may not be the same for everyone. “If a taxpayer looking to start taking Medicare earns more than $109,000 in modified adjusted gross income, their Part B and Part D monthly premiums will be higher,” Kevin Walton, founder at California-based Beyond Your Benefits, a health care planning firm, told NTD.Walton said there’s also a two-year lookback on your tax return to calculate the plan’s Income Related Monthly Adjustment Amount, which matters, too. “If you made over $109,000 for 2024 as an unmarried person or greater than $21,000 as a married couple in 2024, you would be subject to the higher Medicare Part B and Part D monthly premium for 2026.”
Track the coverage gaps
Another factor people need to know before enrolling in Medicare is that it has coverage gaps. “In particular, Medicare Part A and Part B cover 80 percent, but they don’t cover drug costs, and the beneficiary pays the other 20 percent out of pocket,” Walton noted. “There is additional coverage that can be purchased to cover the remaining 20 percent and drug costs, via a Medicare Supplement and a standalone Part D drug plan, or you can purchase a Medicare Advantage plan that bundles the 20 percent gap and drug plan into a single plan.”Get Good Medicare Help From a Trusted Professional
One way to avoid Medicare cost mistakes is to use a Medicare-approved licensed health agent.“Whether you apply for Medicare on your own or use a Medicare agent, the cost is the same,” Walton said. “It's nice to have someone on your side who can help you navigate these decisions because with Medicare, depending on the state you live in, the very first decision you make on what Medicare plan you choose may be the most important you make.”