Medicare Basics for 2025

Medicare, a government-run health insurance program, is designed to provide health coverage to people aged 65 and older, as well as some younger individuals with disabilities or specific medical conditions. Understanding the process of enrolling in Medicare and knowing what insurance options are available once you’re enrolled can be confusing, but it’s essential for securing the right health coverage. This guide will walk you through the steps of signing up for Medicare and the various Medicare insurance options available to you.

Step 1: Understand When You Can Sign Up for Medicare

Before you sign up for Medicare, it’s important to understand the timing of your enrollment. There are several windows during which you can enroll, and failing to sign up during these periods can result in penalties or delays in coverage.

Initial Enrollment Period (IEP)
Your Initial Enrollment Period (IEP) is the seven-month window surrounding your 65th birthday. This includes:

Three months before the month you turn 65.
The month of your 65th birthday.
Three months after the month you turn 65.
If you sign up during your IEP, your coverage will generally begin the first day of the month in which you turn 65. If your birthday falls on the 1st of the month, your coverage will begin the month before.

General Enrollment Period (GEP)
If you miss your IEP, you can enroll during the General Enrollment Period, which runs from January 1 to March 31 each year. However, if you enroll during the GEP, your coverage won’t start until July 1 of that year, and you may face a late enrollment penalty.

Special Enrollment Period (SEP)
If you are still working at age 65 and have health insurance through your employer, you may qualify for a Special Enrollment Period (SEP). The SEP allows you to sign up for Medicare without penalties when you retire or lose your employer-based coverage. This period generally lasts for eight months after your employer health coverage ends.

How to SIgn Up for Medicare Parts A & B

To sign up for Medicare Parts A and B, you can begin by visiting the official Medicare website at www.medicare.gov. If you’re eligible due to Social Security or Railroad Retirement Board (RRB) benefits, you’ll be automatically enrolled in Parts A and B when you turn 65, if you have been receiving them for at least 4 months. If you’re not automatically enrolled, you can sign up during your Initial Enrollment Period, which starts three months before your 65th birthday and lasts for seven months. To sign up, you will need to visit the social security website at www.ssa.gov and apply online. You can visit your local Social Security office to sign up as well. To find a location near you, visit https://secure.ssa.gov/ICON/main.jsp.

Step 2: A, B, C’s of Medicare Coverage

Once you understand your enrollment windows, you need to decide which Medicare coverage options are right for you. Medicare consists of different parts, each covering different aspects of healthcare.

Medicare Part A: Hospital Insurance
Medicare Part A covers inpatient hospital stays, skilled nursing care, hospice care, and some home health services. Most people don’t have to pay a monthly premium for Part A if they or their spouse paid Medicare taxes while working for at least 10 years.

Medicare Part B: Medical Insurance
Medicare Part B covers outpatient care, doctor’s services, preventative services, and some home health services. Part B is optional, but most people enroll in it. There is a monthly premium for Part B, which is based on your income. If you don’t sign up for Part B when you’re first eligible, you may face a late enrollment penalty.

Medicare Part C: Medicare Advantage Plans
Medicare Part C, also known as Medicare Advantage, is a private health plan that combines coverage from Part A and Part B, and often includes additional benefits such as prescription drug coverage (Part D), dental, vision, and hearing coverage. These plans are offered by private insurance companies approved by Medicare and may have different costs and coverage options.

Medicare Part D: Prescription Drug Coverage
Medicare Part D helps cover the cost of prescription medications. Part D plans are offered by private insurance companies and are available to anyone enrolled in Medicare. You can either:

Enroll in a stand-alone Part D plan to add drug coverage to Original Medicare.
Choose a Medicare Advantage plan that includes Part D prescription drug coverage.
Like Part B, there is a monthly premium for Part D, and the amount you pay depends on your income. If you don’t enroll in Part D when you’re first eligible, you may face a late enrollment penalty. You can search for plans and enroll here.

Step 3: Compare Medicare Advantage vs. Medicare Supplement Plans

When signing up for Medicare, one of the most important decisions you’ll need to make is whether to choose a Medicare Advantage plan (Part C) or a Medicare Supplement plan (also known as Medigap). Both options provide additional coverage to Original Medicare (Parts A and B), but they differ in terms of benefits, costs, and how they work. Here’s a comparison to help you decide which option is best for you:

Medicare Advantage (Part C)
Medicare Advantage plans are offered by private insurance companies approved by Medicare. These plans provide an all-in-one alternative to Original Medicare and often include extra benefits such as prescription drug coverage, vision, dental, and hearing.

Pros:

Comprehensive Coverage: Medicare Advantage plans typically combine the coverage of Part A, Part B, and sometimes Part D (prescription drugs) into one plan. Many plans also offer additional benefits such as dental, vision, hearing, and wellness programs.
Lower Premiums: Many Medicare Advantage plans offer low or $0 monthly premiums, although you’ll still pay the Part B premium.
Out-of-Pocket Maximum: Medicare Advantage plans have a cap on your annual out-of-pocket expenses, which helps protect you from high healthcare costs. Once you reach this limit, the plan covers 100% of your costs for the rest of the year.
Convenience: All your healthcare services are included in one plan, which can simplify managing your coverage and providers.
Cons:

Restricted Provider Networks: Many Medicare Advantage plans have a network of doctors and hospitals. You may need to use in-network providers to get the lowest costs, and some plans may require referrals to see specialists.
Plan Variability: Medicare Advantage plans are offered by private insurance companies, and the coverage, costs, and provider networks can vary widely between plans. It’s important to compare different plans available in your area to find one that meets your needs.
Geographic Limitations: Some Medicare Advantage plans may have limited coverage outside of certain geographic areas, which could be a concern if you travel frequently.

Medicare Supplement (Medigap) Plans
Medicare Supplement plans, also called Medigap, are private insurance plans that work alongside Original Medicare (Parts A and B) to help cover the out-of-pocket costs that Original Medicare doesn’t pay, such as deductibles, coinsurance, and copayments.

Pros:

Comprehensive Coverage for Out-of-Pocket Costs: Medigap plans help pay for gaps in Original Medicare, including coinsurance, copayments, and deductibles. This can greatly reduce your out-of-pocket expenses and provide more predictable healthcare costs.
No Network Restrictions: Unlike Medicare Advantage plans, Medigap plans do not have networks. You can see any doctor or specialist who accepts Medicare, which gives you more flexibility in choosing healthcare providers.
Nationwide Coverage: Since Medigap plans work with Original Medicare, they provide coverage across the United States, so they’re ideal for people who travel frequently or live in multiple locations throughout the year.

Cons:

Additional Premium: Medigap plans have a monthly premium in addition to the Part B premium you pay for Original Medicare. While Medigap plans help with out-of-pocket costs, this additional premium can make them more expensive than Medicare Advantage plans.
Doesn’t Include Prescription Drug Coverage: Medigap plans do not include prescription drug coverage, so you will need to enroll in a separate Part D plan for medication coverage if you choose a Medigap plan.
No Extra Benefits: Medigap plans only cover the out-of-pocket costs for Medicare-approved services and do not include extra benefits like dental, vision, or hearing coverage, which may be included in some Medicare Advantage plans. Some plans offer limited extra benefits, see us for more details.

Key Differences Between Medicare Advantage and Medigap

Coverage: Medicare Advantage plans replace Original Medicare and may offer additional benefits such as prescription drug coverage and extras like dental, vision, and wellness services. Medigap, on the other hand, supplements Original Medicare by covering its out-of-pocket costs but doesn’t provide extra benefits like vision or dental.

Costs: Medicare Advantage plans often have low or $0 premiums, but you’ll still need to pay the Part B premium and could face copayments and coinsurance for healthcare services. Medigap plans have higher premiums but generally lower out-of-pocket costs when you need care. You’ll also need a Part D plan for prescription coverage if you choose Medigap.

Provider Flexibility: With Medicare Advantage, you often have to use in-network providers, and you may need referrals for certain specialists. With Medigap, you can see any doctor who accepts Medicare without referrals, providing more flexibility in choosing healthcare providers.

Out-of-Pocket Costs: Medicare Advantage plans come with an annual out-of-pocket maximum, which caps how much you pay for covered services each year. Medigap plans help cover your out-of-pocket costs from Original Medicare, but there is no cap on your out-of-pocket spending with Original Medicare itself.

Which Option is Right for You?

Choosing between a Medicare Advantage plan and a Medicare Supplement plan depends on your health needs, budget, and preferences. If you want an all-in-one plan that combines your Medicare coverage with additional benefits like prescription drug coverage and extras such as dental or vision care, a Medicare Advantage plan might be a good fit for you.

On the other hand, if you prefer the flexibility of seeing any doctor who accepts Medicare and want to minimize out-of-pocket costs when you need care, a Medigap plan might be the better option. Keep in mind that if you choose Medigap, you will need to enroll in a separate Part D plan for prescription drug coverage, and you will have to pay the premiums for both Medigap and Part B.

Carefully assess your healthcare needs, budget, and how much flexibility you want in your coverage before making a decision. Both options have their advantages, so it’s important to review the plans available in your area and choose the one that best fits your lifestyle and medical needs.

Step 4: Enroll in Medicare

After deciding on the type of Medicare coverage you want, you can sign up for Medicare Parts A and or Par B online at https://www.ssa.gov/, by phone, or in person at your local Social Security office. To enroll, you’ll need to provide basic information such as:

Your Social Security number.
Proof of U.S. citizenship or legal residency.
If you’re applying for Part B or Part D, you may need to provide information about any current health insurance you have.
Once you’ve signed up for Medicare, you’ll receive your Medicare card, which you’ll use to access your healthcare benefits.

Step 5: Review Your Coverage Annually

Medicare enrollment isn’t a one-time decision. It’s important to review your Medicare coverage every year, as your needs or the plan offerings may change. This period allows you to change your Medicare Advatage plan or your Part D drug plan. Annual Enrollment for Medicare occurs each fall, from October 15 to December 7, when you can switch plans or make changes to your coverage for the upcoming year. For Medicare Supplement plans, this can be done ANY time of the year, but typically you will need to pass medical underwriting to make changes. Schedule a call with us to get on our annual review calendar.

Conclusion

Navigating the Medicare system can be overwhelming, but by understanding when to enroll and exploring your insurance options, you can make an informed decision about your healthcare coverage. Whether you choose Original Medicare with a Medigap plan or a Medicare Advantage plan, it’s important to review your options, costs, and coverage needs to ensure you have the right plan for your situation. With careful planning and knowledge, you can maximize your benefits and ensure you receive the healthcare you need during your retirement years.