Medicare 101: What You Need to Know Before Turning 65

Turning 65 is a major milestone—not just for birthdays, but for your healthcare. That’s because age 65 is when most people become eligible for Medicare, the federal health insurance program for retirees. But with different parts, deadlines, and plan choices, it’s easy to feel overwhelmed by the options.

Let’s break it down step by step so you can approach Medicare with clarity and confidence.

What Is Medicare?

Medicare is a federal health insurance program primarily for people aged 65 and older, although some younger individuals with certain disabilities or medical conditions may qualify as well. It’s designed to help cover many healthcare costs as you age, but it’s not one-size-fits-all.

The Four Parts of Medicare, Explained

Medicare is divided into four main parts:

Part A – Hospital Insurance

• Covers inpatient hospital stays, skilled nursing facilities, hospice care, and some home health care.

• Most people don’t pay a premium for Part A if they or their spouse paid Medicare taxes while working.

Part B – Medical Insurance

• Covers doctor visits, outpatient care, preventive services, and some home health care.

• Monthly premiums apply (standard premiums are set annually, and higher-income individuals may pay more).

Part C – Medicare Advantage

• Offered by private insurance companies approved by Medicare.

• Combines Parts A and B, and often includes Part D (prescription drug coverage), plus extra benefits like dental, vision, and hearing.

• You typically pay one premium for a Medicare Advantage plan.

Part D – Prescription Drug Coverage

• Helps cover the cost of prescription drugs.

• Offered through private insurers, either as a standalone plan (if you have Original Medicare) or bundled with a Medicare Advantage plan.

When Should You Enroll in Medicare?

Most people should enroll during their Initial Enrollment Period (IEP), which begins three months before the month you turn 65 and ends three months after.

If you’re still working and have employer coverage, you may be able to delay Part B without penalty—but it’s important to confirm this to avoid unexpected costs later.

Avoiding Late Enrollment Penalties

If you miss your initial enrollment window and don’t have qualifying coverage, you could face permanent late enrollment penalties for both Part B and Part D. These penalties can add up over time, so it’s best to plan ahead and enroll on time.

Original Medicare vs. Medicare Advantage: How to Choose

The biggest decision most people face is whether to go with Original Medicare (Parts A & B) or a Medicare Advantage plan (Part C).

Here are a few key differences:

• Original Medicare allows you to see any doctor that accepts Medicare and typically requires a separate Part D plan for prescriptions.

• Medicare Advantage may have provider networks and additional benefits, but limits you to specific service areas and doctors.

Choosing the right plan depends on your health needs, budget, and preferred doctors. Working with a trusted advisor or Medicare professional can help you weigh the pros and cons.

How a Financial Advisor Can Help

A financial advisor can be a valuable resource when it comes to planning for healthcare costs in retirement—especially as you navigate how Medicare fits into your overall financial picture.

A Financial Advisor can help:

• Estimate your potential out-of-pocket expenses

• Evaluate whether you may need supplemental insurance

• Coordinate Medicare benefits with your retirement income strategy

By working with a financial advisor, you can gain guidance and clarity to make decisions that support your long-term goals and financial well-being. If you have questions or need help evaluating your options, we recommend reaching out to your financial advisor for personalized guidance.

Final Thoughts

Medicare is a critical part of your retirement plan, and understanding your options before you turn 65 can help you avoid unnecessary stress—and unexpected expenses. By learning the basics, planning ahead, and seeking the right guidance, you’ll be well on your way to making smart, confident choices about your healthcare coverage.