Learn About Medicare Eligibility Requirements

Understanding Medicare: The Basics of How the Program Works

Medicare is a federal health insurance program created in 1965 that serves people age 65 and older, some younger people with disabilities, and people with End-Stage Renal Disease (ESRD). As of 2024, over 67 million people receive Medicare coverage. The program is run by the Centers for Medicare & Medicaid Services (CMS), a division of the U.S. Department of Health and Human Services.

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The program is divided into four parts, each covering different types of care. Part A covers hospital stays, skilled nursing facility care, hospice care, and some home health services. Part B covers outpatient services like doctor visits, preventive care, laboratory tests, and durable medical equipment. Part D covers prescription drug costs. Part C, also called Medicare Advantage, is an alternative way to receive Parts A and B coverage through private insurance companies, and most Part C plans also include Part D drug coverage.

Medicare works differently than Medicaid, a program that is jointly funded by federal and state governments and serves people with lower incomes regardless of age. Many people confuse these two programs because they have similar names, but they serve different populations and have different rules.

The program is funded through payroll taxes. While employed, workers and employers each pay 1.45% of wages toward Medicare Part A. Self-employed people pay 2.9%. These contributions create an account associated with your Social Security record. When you turn 65 or become eligible through another pathway, you can begin receiving Medicare services.

Practical Takeaway: Understanding that Medicare has four distinct parts helps you recognize what types of medical care each part covers. This foundation is essential before learning about who may receive coverage.

Age-Based Medicare Eligibility: Turning 65 and Enrollment Periods

The most common way people become Medicare-eligible is by reaching age 65. You do not automatically receive Medicare benefits when you turn 65—you must take action to enroll. The enrollment process begins three months before the month you turn 65 and continues for three months after the month you turn 65. This seven-month window is called the Initial Enrollment Period (IEP).

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If you are already receiving Social Security benefits when you turn 65, Medicare Part A and Part B enrollment happens automatically. Your Medicare coverage begins on the first day of the month you turn 65. You will receive your Medicare card in the mail about two weeks before your coverage starts. However, if you are not yet receiving Social Security, you must enroll in Medicare yourself through Medicare.gov, by phone, or by visiting a Social Security office in person.

Timing matters for Part B enrollment. If you delay enrolling in Part B past your Initial Enrollment Period and you do not have other health coverage that is considered creditable (coverage that meets Medicare's standards), you may face a permanent penalty. This penalty increases your Part B premiums by 10% for each 12-month period you could have been enrolled but were not. For example, if you delay enrollment for two years, your premiums could be 20% higher for life.

People who have health insurance through an employer while working past age 65 may be able to delay Part B enrollment without penalty if that employer coverage is creditable. This requires that the employer has at least 20 employees. You have eight months from the time your employment or employer coverage ends to enroll in Part B without penalty.

There are other enrollment periods beyond the Initial Enrollment Period. The General Enrollment Period runs from January 1 to March 31 each year for people who missed their Initial Enrollment Period. However, enrolling during the General Enrollment Period does not prevent the permanent Part B premium penalty mentioned above. Medicare Advantage and Part D plans have their own enrollment windows, typically the Annual Enrollment Period (October 15 to December 7 each year) and the Open Enrollment Period (January 1 to March 31).

Practical Takeaway: Mark your calendar for three months before you turn 65. Enrolling during your Initial Enrollment Period is the way to avoid permanent penalties on Part B premiums and ensure uninterrupted coverage.

Eligibility for People Under 65 with Disabilities or ESRD

Medicare is not only for people age 65 and older. Certain younger people may receive Medicare if they have been receiving Social Security Disability Insurance (SSDI) benefits for at least 24 months. SSDI is a program that provides monthly income to workers who cannot work due to a severe medical condition that is expected to last at least 12 months or result in death.

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A person under 65 qualifies for SSDI through their own work record if they have paid enough Social Security taxes while working. The amount of work history required depends on your age when you become disabled. Generally, you need to have worked and paid into Social Security for a certain number of quarters (three-month periods). For example, someone age 24 needs six quarters of work history in the past three years, while someone age 31 needs 20 quarters of work history in the past ten years.

There is a 24-month waiting period from when SSDI benefits begin before Medicare Part A and Part B coverage starts. This means if someone's SSDI benefits begin on January 1, 2024, their Medicare coverage would begin on January 1, 2026. During this waiting period, beneficiaries may still need to find other sources of health insurance.

People with End-Stage Renal Disease (ESRD)—permanent kidney failure requiring dialysis or a transplant—become Medicare-eligible immediately, regardless of age or work history. ESRD Medicare coverage begins on the first day of the month in which dialysis treatment begins for people receiving in-center hemodialysis or peritoneal dialysis. For people receiving a kidney transplant, coverage begins on the date of transplant. This coverage continues for 36 months after a successful transplant, after which coverage may continue if other eligibility requirements are met.

People with ALS (Amyotrophic Lateral Sclerosis), also called Lou Gehrig's disease, do not face the 24-month waiting period. They become Medicare-eligible immediately upon approval for SSDI benefits.

Practical Takeaway: If you or someone you know has become disabled before age 65, learning about the SSDI-to-Medicare pathway and the 24-month waiting period helps you plan for health coverage during the transition.

Work History and Payment Contributions: The "40 Quarters" Requirement

Most people receive Medicare Part A (hospital insurance) without paying a monthly premium because they or their spouse paid Medicare taxes while working. However, this benefit requires meeting a work history requirement: accumulating at least 40 quarters of coverage. A quarter is a three-month period, so 40 quarters equals ten years of work history.

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During each calendar year, you can earn up to four quarters of coverage by earning a minimum amount of income and paying Medicare taxes. In 2024, earning $1,730 per quarter (approximately $6,920 per year) provides four quarters of coverage. These requirements increase slightly each year with inflation. You do not need to earn this amount every quarter—you can earn all four quarters within a single year.

Work history is tracked through your Social Security record, which is connected to your Social Security number. If you worked under different names or have had gaps in your Social Security record, you may want to verify your work history before you turn 65. You can create an account on ssa.gov and view your earnings record.

If you do not have 40 quarters of work history on your own record, you may be able to use your spouse's work record if you have been married for at least one year. If you are divorced, you may be able to use your ex-spouse's work record if the marriage lasted at least ten years and you have not remarried before age 60.

If you or your spouse do not have 40 quarters of work history, you can still receive Medicare Part A at age 65, but you will pay a monthly premium. In 2024, the Part A premium for people with 30-39 quarters of coverage is $278 per month, and for those with fewer than 30 quarters, it is $505 per month. These amounts are adjusted annually. Part B always has a monthly premium that varies based on income; the standard Part B premium for 2024 is $174.70 per