Medicare eligibility is connected to age and disability.

Most people become eligible for Medicare by turning 65, but Americans on disability can receive Medicare after they’ve been on disability coverage for a period. Also, Americans with end-stage renal disease are eligible for the federal health insurance program.

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Medicare sends information about sign up as you approach your 65th birthday. You have seven months to enroll in Medicare -- from three months before your birth month to three months after your birth month

Medicare beneficiaries can pick between Original Medicare or Medicare Advantage.

  • Original Medicare is Parts A (hospitals) and Part B (physicians). Original Medicare doesn’t include prescription drug coverage, but you can get that insurance in a Part D plan.
  • Private insurance companies provide Medicare Advantage (Part C) plans, which incorporate hospital, physician, prescription drugs and may include other benefits, such as dental and vision.

After you choose a plan, you have an opportunity to change plans during open enrollment. Medicare open enrollment runs from Oct. 15 to Dec. 7 each year. During that time, you can switch Medicare Advantage plans, move from Medicare Advantage to Original Medicare, swap Original Medicare for Medicare Advantage and change Part D plans. There's also a limited open enrollment from Jan. 1 to March 31. At that time, you can only switch Medicare Advantage plans or move from Medicare Advantage to Original Medicare. 

Besides those times, you can only change Medicare plans during the year if you have a qualifying event that sparks a special enrollment period. Those life events include moving, losing other health insurance coverage or a spouse's death. 

How much does Medicare cost?

Medicare Part A doesn’t charge premiums for people 65 and over who paid Medicare taxes for at least 10 years.

If you’re under 65, you can get Part A without premiums if you receive Social Security disability benefits for 24 months or you’re being treated for kidney dialysis or kidney transplant. Also, people with Lou Gehrig’s disease receive Medicare benefits in the first month of disability benefits rather than waiting for 24 months.

Meanwhile, Part B costs $148.50 for those with an annual income of $87,000 or less or joint filers making $174,000 or less. You’ll pay higher Part B rates if you make more money.

Also, people who sign up for Part A but not Part B pay a penalty if they enroll in Part B later. The penalty is a 10% premium increase for every year that you didn’t sign up for Part B. That penalty lasts as long as you have Part B later.

If you’re eligible for Medicare, but still have health insurance elsewhere, you’ll want to weigh whether it’s worth signing up for that coverage or delaying Part B for now and face a later penalty.

People with Parts A and B are also eligible for Part D prescription drug coverage. The average monthly Part D premium is $30.50 in 2021.

The other alternative is Medicare Advantage. The Centers for Medicare and Medicaid Services predicted 42% of Medicare beneficiaries will have Medicare Advantage in 2021. The average Medicare Advantage monthly premium is $21, but deductibles and out-of-pocket costs vary. The more you pay for premiums, the less you’ll likely pay in out-of-pocket expenses -- and vice-versa.

Can you get Medicare if you never worked?

You’re still eligible for Medicare, even if you haven’t worked or only paid Medicare taxes for a short period, as long as you meet age qualifications and you’re a U.S. citizen or a legal resident for at least five years. However, you’ll have to pay for Part A coverage if you paid Medicare taxes for less than 10 years.

  • Part A premiums for people who paid Medicare taxes for fewer than 30 quarters are $458 monthly.
  • Part A premiums for people who paid Medicare taxes for between 30 and 39 quarters are $252 monthly.

How to choose a Medicare plan

You can pick between Original Medicare with Part D or Medicare Advantage.

Don’t base your opinion only on a plan’s premiums. Here’s what to review when choosing a plan:

  • Costs -- Look at both premium and out-of-pocket costs.
  • Coverage -- Both Original Medicare and Medicare Advantage offer comprehensive benefits, but you may find a Medicare Advantage plan with additional benefits.
  • Prescription drugs -- See what drugs each plan covers and the costs.
  • Doctor and hospital choice -- Not all doctors and facilities accept every Medicare plan. Check to make sure your providers, hospitals and facilities take the plan before choosing it.
  • Quality of care -- Medicare ranks each Medicare Advantage plan. If you’re comparing Medicare Advantage plans, you’ll want to see their star ratings.
  • Plan design -- Medicare Advantage insurers offer multiple plans, such as preferred provider organization (PPO) and health maintenance organization (HMO) plans. PPOs have fewer restrictions, but cost more than HMOs, which usually have smaller networks and don’t pay for any out-of-network care.

Deb Gordon, author of “The Health Care Consumer’s Manifesto,” said people looking for a health plan should figure out their “must-haves.” That includes making sure your doctor accepts the health plan.

Then, analyze your preferences and how much risk you’re willing to take. For instance, you may want a high deductible plan, if you want the lowest premiums with the understanding that you’ll pay more out-of-pocket when you need health care services.

“It’s impossible to predict your health needs or utilization. But you can assess the likelihood that you’ll need a lot of health care services or very little. If you know you’ll need a lot — you’re planning a surgery or you have a chronic disease — expect to run through your deductible; once you do, insurance will pick up most of the costs after that, so paying more in premium for a lower-deductible may save you money,” Gordon said.

If you’re eligible for Medicare, Medicare Plan Finder is one way to compare Original and Medicare Advantage plans offered in your area. Plan Finder provides a plan’s rating, and estimates for premiums, deductibles, health and drug costs. By answering questions, the tool also narrows choices for you.