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7 Essential Medicare Rules You Need to Know

By Maurie Backman - Feb 17, 2020 at 9:02AM

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Gearing up to enroll in Medicare? Make sure you understand how the program works.

Millions of seniors get health coverage through Medicare, and the more you know about the program, the better equipped you'll be to make the most of your benefits. Here are a few key rules you should familiarize yourself with.

1. Eligibility begins at 65

You're entitled to Medicare coverage beginning at age 65. You can enroll in Medicare Part A, which covers hospital care, for free if you or your spouse worked and paid Medicare taxes on your income for at least 10 years.

Pen resting on Medicare enrollment form


2. There are penalties for signing up late

Your initial Medicare enrollment window spans seven months, beginning three months before the month of your 65th birthday and ending three months after that month. If you don't enroll during that time and go too long without coverage, you'll risk lifelong surcharges on your monthly premiums for Medicare Part B, which covers outpatient services and diagnostics. Specifically, you'll be charged an extra 10% for each 12-month period you fail to sign up upon being eligible.

3. Higher earners pay more for Part B

The standard Medicare Part B premium changes from year to year, and currently, it's $144.60 per month. But if your income exceeds a certain threshold, you'll be subject to what are known as income-related monthly adjustment amounts (IRMAAs), and that's an expense you'll need to plan for accordingly. For the current year, you'll face IRMAA surcharges with earnings above $87,000 as a single tax filer, or $174,000 as a married couple filing jointly.

4. You can have original Medicare or Medicare Advantage -- but not both

Original Medicare consists of Parts A and B, as well as Part D, which covers prescription medications. As an alternative, you can sign up for a Medicare Advantage plan. Advantage plans are administered by private insurers and are required to offer at least the same level of coverage as original Medicare. Often, they offer a wider scope of coverage, though. For example, original Medicare won't pay for dental care or eye exams, but many Advantage plans will. But whereas original Medicare gives you access to medical professionals nationwide, Advantage limits you to a specific network, which some seniors find too restrictive.

5. You can have Medicare plus private insurance

If you're still working at age 65 and have access to a group health plan through your employer, or have access to a spouse's plan, you can retain that coverage but also enroll in Medicare simultaneously. If your employer has 20 or more employees, Medicare will serve as your secondary insurance, and since Part A is free, it could pay to enroll for backup hospital coverage alone.

6. Medicare and health savings accounts don't mix

Health savings accounts, or HSAs, offer a great opportunity to enjoy tax benefits in the course of socking away funds for healthcare expenses. But once you enroll in Medicare, you'll no longer be able to contribute money to an HSA, which is why some people who are still eligible for employer health coverage at 65 opt to delay their Medicare enrollment, even though Part A is free and can serve as backup insurance.

7. You can enroll in Medicare before Social Security

As stated earlier, Medicare eligibility begins at 65, and while you're allowed to sign up for Social Security as early as age 62, you're not entitled to your full monthly benefit based on your earnings history until you reach full retirement age. That age is either 66, 67, or 66 and a specific number of months, depending on the year you were born. As such, you're absolutely allowed to sign up for Medicare only at 65, and wait to sign up for Social Security. On the other hand, if you start collecting Social Security before the age of 65, you'll be automatically enrolled in Medicare when your 65th birthday arrives.

Educating yourself on Medicare is an important step on the road to maintaining good health. Study these rules so you understand the ins and outs of this important program.

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