What health insurance options exist for people 65 and older

Once you turn 65, you become may be able to access for Medicare, the federal health insurance program run by the Centers for Medicare & Medicaid Services. Medicare is not automatic — you must sign up during your enrollment window, which begins three months before the month you turn 65 and ends three months after. Missing this window can result in permanent penalties on your premiums, so the enrollment date matters.

Medicare has four parts, and understanding what each covers helps you decide which combination fits your situation. Part A covers hospital stays, skilled nursing facility care, and some home health services. Part B covers doctor visits, outpatient care, and medical equipment. Part D covers prescription drugs. Part C, also called Medicare Advantage, is an alternative to Original Medicare (Parts A and B) offered by private insurance companies that contract with Medicare.

Beyond Medicare, you may also have coverage through a current or former employer, or you may purchase a Medigap policy (supplemental insurance) to cover costs that Original Medicare does not pay. Some seniors may have access to for Medicaid as well, which is a joint federal-state program for people with lower incomes and assets, regardless of age.

Key Takeaways

  • You must enroll in Medicare during your enrollment window (three months before to three months after you turn 65), or you will face permanent premium penalties.
  • Original Medicare (Parts A and B) is run by the federal government, while Medicare Advantage (Part C) is offered by private insurers and combines hospital and doctor coverage in one plan.
  • Medigap policies fill gaps in Original Medicare coverage, such as copayments and coinsurance, but do not work with Medicare Advantage plans.
  • Prescription drug coverage (Part D) is separate from hospital and doctor coverage, and you should enroll during your initial enrollment window to avoid late penalties.
  • Your choice between Original Medicare and Medicare Advantage depends on your doctors, prescriptions, and how much out-of-pocket cost you can afford.

Original Medicare versus Medicare Advantage: how they differ

Original Medicare is the traditional option run directly by the federal government. You pay a monthly premium for Part B (and possibly Part A if you did not pay Medicare taxes for 10 years), and you can see any doctor or hospital that accepts Medicare. You pay a deductible, copayments, and coinsurance for each service. There is no annual out-of-pocket maximum, meaning your costs can grow without limit if you have serious illness.

Medicare Advantage plans are sold by private insurance companies such as UnitedHealthcare, Humana, and Anthem. These plans combine Parts A, B, and usually D into one plan with a single deductible and an annual out-of-pocket maximum — once you hit that limit, the plan pays 100 percent of covered services for the rest of the year. The trade-off is that most Advantage plans use a network, so you may pay more or nothing at all if you see an out-of-network provider. Some plans require referrals to see specialists.

If you choose Original Medicare, you must separately enroll in Part D (prescription drug coverage) through a private plan, and you should consider buying a Medigap policy to cover the gaps. If you choose Medicare Advantage, prescription coverage is usually included, and you cannot use Medigap. The choice depends on whether you prefer the freedom to see any doctor (Original Medicare) or the predictable annual costs and network structure (Medicare Advantage).

How to enroll in Medicare and meet the important date

Your initial enrollment period begins three months before the month you turn 65 and ends three months after. For example, if you turn 65 in June, your window opens in March and closes in September. During this seven-month window, you can enroll in Part A, Part B, Part D, and Medicare Advantage without penalty.

You can enroll online at Medicare.gov, by phone at 1-800-MEDICARE, or in person at your local Social Security office. If you enroll before the month you turn 65, your coverage starts the month you turn 65. If you enroll during the month you turn 65, coverage starts the following month. If you enroll after the month you turn 65, coverage starts the month after you enroll.

If you miss your initial enrollment window and do not have other may have access to coverage (such as an active employer plan), you will pay a permanent penalty for the rest of your life. Part B premiums increase by 10 percent for each year you were late, and Part D premiums increase by 1 percent per month of delay. These penalties do not go away, so meeting the important date is critical.

What Medigap policies cover and when to buy one

A Medigap policy is supplemental insurance sold by private insurers that pays some or all of the costs that Original Medicare does not cover — such as copayments, coinsurance, and the Part B deductible. Medigap policies are standardized by the federal government, meaning a Plan G sold by one company covers the same benefits as a Plan G sold by another. The price varies by company and location, but the coverage does not.

There are ten standardized Medigap plans, labeled A through N. Plan G and Plan N are the most common because they cover most out-of-pocket costs. Plan A is the least expensive but covers fewer costs. You can compare plans and prices on Medicare.gov or by contacting insurers directly. Medigap policies do not cover prescription drugs, dental, vision, or hearing aids.

You have the best rates if you buy Medigap during your open enrollment period, which is six months starting the month you turn 65 and enroll in Part B. After this window, insurers can deny you coverage or charge higher premiums based on your health history. If you choose Medicare Advantage initially and later switch to Original Medicare, you may lose the right to buy Medigap at standard rates, so the timing of your choice matters.

Prescription drug coverage through Part D and how to choose a plan

Part D is prescription drug coverage offered by private insurance companies approved by Medicare. If you have Original Medicare, you must enroll in a Part D plan during your initial enrollment period or during the annual enrollment period (October 15 to December 7 each year). If you do not enroll when first may be able to access and do not have other creditable drug coverage, you will pay a permanent penalty of about 1 percent of the national average Part D premium per month of delay.

Part D plans vary in which drugs they cover, how much you pay at the pharmacy, and which pharmacies are in their network. You can use the Medicare Plan Finder tool on Medicare.gov to enter your current prescriptions and see which plans cover them at the lowest cost. The tool shows your estimated annual costs, including premiums, deductibles, and copayments, so you can compare plans side by side.

Part D coverage has a structure: you pay a deductible (which varies by plan), then you pay copayments or coinsurance until you reach a threshold called the "initial coverage limit." After that, you enter the "coverage gap" (sometimes called the "donut hole"), where you pay a higher percentage of drug costs. Once your out-of-pocket spending reaches a certain amount, catastrophic coverage kicks in and the plan pays most of your drug costs for the rest of the year. Understanding this structure helps you predict your annual drug costs.

Income-based programs that may reduce your premiums and out-of-pocket costs

If your income is low, you may may have access to for Extra Help, a federal program that pays Part D premiums and reduces copayments for prescription drugs. You can explore through the Social Security Administration online, by phone at 1-800-772-1213, or at your local Social Security office. Extra Help is based on your current income and assets, not on your tax return from the previous year.

You may also may have access to for Medicare Savings Programs, which are run by your state and pay some or all of your Part A and Part B premiums, deductibles, and copayments if your income and assets fall below certain thresholds. Each state sets its own income limits, so you must contact your state Medicaid office or call 1-800-MEDICARE to learn whether you may have access to. These programs can significantly reduce your out-of-pocket costs.

If you have limited income and assets, you may also may have access to for Medicaid in addition to Medicare. Medicaid covers services that Medicare does not, such as long-term care and dental care. Medicaid rules vary by state, so contact your state Medicaid office to learn what you may be may be able to access for. Combining Medicare with Medicaid and Extra Help can substantially lower your health care costs.

Common mistakes to avoid when choosing senior health insurance

The most costly mistake is missing your enrollment important date. A permanent penalty on your premiums follows you for life, even if you enroll years later. Set a reminder three months before you turn 65 so you have time to research plans and enroll without rushing.

Another common mistake is choosing a plan based on premium alone without checking whether your doctors and prescriptions are covered. A plan with a low premium may have a high deductible or exclude your medications, leaving you with higher out-of-pocket costs. Use the Medicare Plan Finder to enter your specific doctors and drugs before deciding.

Some seniors enroll in Medicare Advantage and later regret it because they cannot switch to Original Medicare and buy Medigap at standard rates. If you think you might want to switch later, Original Medicare with Medigap may be the safer choice, even if the upfront cost is higher.

Finally, do not assume you are automatically enrolled in Medicare. You must actively enroll, even if you are already receiving Social Security. Social Security does not automatically sign you up for Part B or Part D.

Frequently Asked Questions

Do I have to enroll in Medicare at 65 if I am still working?

If you or your spouse are still employed and have health insurance through that job, you may be able to delay enrolling in Part B without penalty. This is called the "special enrollment period." However, you should still enroll in Part A at 65 because it is usually free and covers hospital care. Contact Social Security to confirm your specific situation before delaying Part B enrollment.

Can I switch from Medicare Advantage to Original Medicare later?

Yes, you can switch during the annual enrollment period (October 15 to December 7) or if you have a may have access to life event such as moving out of your plan's service area. However, if you switch to Original Medicare after your initial enrollment period, you may not be able to buy Medigap at standard rates — insurers can charge more based on your health. Switching is possible but may cost more.

What happens if I do not enroll in Part D when I first become may be able to access?

If you do not have other creditable drug coverage and do not enroll in Part D during your initial enrollment period, you will pay a permanent penalty of approximately 1 percent of the national average Part D premium for each month you were late. This penalty is added to your premium every year for as long as you have Part D coverage, so enrolling on time saves money over your lifetime.

Are dental, vision, and hearing covered by Original Medicare?

Original Medicare does not cover routine dental, vision, or hearing services. Some Medicare Advantage plans include these benefits, though usually with limits. If these services matter to you, check whether your Medicare Advantage plan covers them, or budget for these costs separately if you choose Original Medicare.

How do I know if I may have access to for Extra Help or Medicare Savings Programs?

Income and asset limits vary by program and state. You can explore for Extra Help through Social Security at 1-800-772-1213 or online. For Medicare Savings Programs, contact your state Medicaid office or call 1-800-MEDICARE and ask about programs in your state. Having your recent income and asset information ready speeds up the process.