Medicare Part A hospital coverage is mandatory for those receiving Social Security retirement or disability benefits or railroad benefits. However, because Part B medical coverage requires the payment of a monthly premium, those eligible can opt out or delay Part B coverage. Medicare Part D prescription drug coverage is optional.
Employees support Medicare through payroll deductions throughout their working lives until retirement, and for most people, Part A coverage is free. Those already receiving Social Security or railroad benefits are enrolled in Medicare Parts A and B automatically and receive Medicare cards in the mail three months before their 65th birthdays. Others need to sign up for Medicare Parts A and B.
The initial seven-month enrollment period is the month of a 65th birthday and the three months before and after. If those eligible do not sign up for Part B during the initial enrollment period, they must pay a higher premium for enrolling late in Part B. Those who are still working and covered by an employer group health plan can delay signing up for Part B coverage without penalty.
Instead of signing up for original Medicare Parts A and B, eligible applicants can sign up for a Medicare Advantage plan, also known as Medicare Part C. These are plans managed by private medical insurance companies that offer all the coverage of Medicare Parts A and B. Many Medicare Part C plans also offer additional coverage for such medical needs as dental, vision and prescription medications.