In This Chapter

• Getting a grip on Medicare and how to qualify

• Checking out Medicare's benefits and costs

• Figuring out when and how to enroll in Medicare

• Discovering how to decrease your costs and increase your benefits

• Knowing where to go for more Medicare info

As you near 65, you're likely facing the mysteries of Medicare for the first time — and oh what a mystery it can be. You need to know whether you'll qualify, how to sign up, and how the different parts of the program — each with its own benefits and costs — fit together. This chapter takes the mystery out of Medicare so you know what to expect when you reach that magic milestone of 65.

Knowing When You Qualify

Medicare is the only national healthcare program in the United States, and it's enduringly popular among people who use it. Though Medicare doesn't pay all your medical bills, it still gives a lot of protection against today's high healthcare costs if you don't have other health insurance. And, unlike other forms of health insurance, you can't be excluded from Medicare, or pay more for it, because of advancing age or the state of your health. How's that for your tax dollars at work?

To qualify for Medicare, you must meet certain rules. We break it down in the following sections.

If you're age 65 or older

You qualify for Medicare as soon as you reach age 65 if you or your spouse has worked long enough to entitle you to Social Security or Railroad Retirement benefits, even if you're not yet receiving them. You usually need at least 40 credits (amounting to about ten years of work) to become eligible for these retirement benefits, which are paid through monthly checks. Anyone with enough work credits can claim these benefits from the age of 62 onward, though doing so means accepting lower payments than when starting at or after full retirement age. (For people born between 1943 and 1954, full retirement age is now 66.) But remember — even if you claim these benefits early, you still have to wait until age 65 to qualify for Medicare.

The annual statement you receive from Social Security says whether you qualify for Medicare or, if you're not eligible yet, when you will be. If you lose your statement, call Social Security at 800-772-1213 to ask for a replacement.

If you're younger than 65 and have disabilities

You're entitled to Medicare at any age if you have a severe illness, injury, or disability that prevents you from earning more than a certain amount of money each month and you've received Social Security disability benefits for at least 24 months. These months need not be consecutive. Anyone diagnosed with Lou Gehrig's disease (amyotrophic lateral sclerosis, or ALS) doesn't have to wait 24 months to join Medicare. If you think you may qualify and want to find out the earnings limits that apply to your circumstances, call Social Security at 800-772-1213 or go to www.ssa.gov.

You're entitled to Medicare at any age if you have end-stage renal disease (ESRD) — usually defined as needing a kidney transplant or regular dialysis — and if you or your spouse has paid into Social Security through work for a certain length of time. This period depends on how old you are.

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