Most people don’t pay a Part A premium because they paid Medicare taxes (for at least 40 quarters) while working.  If you buy Part A, you'll pay $506.00 per month in 2023.  If you paid Medicare taxes for less than 30 quarters, the standard Part A premium is $506.00 per month.  If you paid Medicare taxes for 30-39 quarters, the standard Part A premium is $278.00 per month.

You can get premium-free Part A at 65 if:

• You already get retirement benefits from Social Security or the Railroad Retirement Board.
• You're eligible to get Social Security or Railroad benefits but haven't filed for them yet.
• You or your spouse had Medicare-covered government employment.

Although Part B is optional, you should sign up for it when you first become eligible because there is a late-enrollment penalty if you wait – i.e., the cost for Part B may go up 10% for each full 12-month period that you delay.

The amount paid for Part B (Medical insurance) coverage is based on your modified adjusted gross income (MAGI) from your income tax return.  Note that the Social Security Administration uses tax returns from two years ago to determine your MAGI and correspondingly your Part B premium (e.g., the 2023 premium is based on your 2021 MAGI).  As the name implies MAGI includes Adjusted Gross Income (line 11 of IRS Form 1040) plus any tax-exempt interest income (line 2a of Form 1040).  Note that your Adjusted Gross Income (and MAGI) may include one-time only income such as capital gains, the sale of property, withdrawals from an IRA, or conversion from a traditional IRA to a Roth IRA.

Note that the Medicare Part B deductible for 2023 is $226. You pay this before original medicate starts to pay.

The monthly premium paid for Medicare Part B insurance for 2023 is as follows:

Alternative insurance can be purchased from private insurance companies approved by Medicare.  These are called Medicare Advantage Plans (Part C) and include HMOs and PPOs that follow Medicare rules and receive monthly payments from Medicare for your insurance.  Advantage Plans must provide at least all Part A and Part B benefits that the original Medicare Plan provides.  Each Medicare Advantage Plan can charge different out-of-pocket costs and have different rules for how you get services (like whether you need a referral to see a specialist or if you have to go to only doctors, facilities, or suppliers that belong to the plan for non‑emergency or non-urgent care).  These rules can change each year.

While Medicare provides important healthcare coverage for those 65 or older, it does not cover the following:

1. Opticians & eye exams - Routine eye exams, glasses or contact lenses.
2. Hearing aids - Routine hearing tests or hearing aids.
3. Dental work - Routine checkups, teeth cleaning, dentures, crowns, root canals, etc.
4. Overseas care - Medical costs incurred outside of the United States.
5. Podiatry - Foot exams or treatment unless related to diabetic nerve damage or foot injuries/ailments.
6. Cosmetic surgery - Face lifts, tummy tucks, liposuction, etc. However, plastic surgery related to an accidental injury is covered.
7. Chiropractic care - Most chiropractic services or tests that a chiropractor orders, including x-rays.
8. Nursing home care - Assisted living facility or nursing home. However, it does pay for limited stays in rehab facilities.

To simplify the Medicare decision-making process, the "Medicare & You" Benefits Booklet provides the following chart:

To simply your decision-making process, I suggest that these are really only two options for retiree hospital, medical and drug coverage (note that option #2 has two additional choices):

1. If your prior employer allows continuation of your health insurance benefits (hospital, medical and prescription drugs) when you retire and you are happy with the plan, then it is usually in your best interest to continue with your employer’s group plan. For retirees this could be a Medicare Supplement Insurance (Medigap) or Medicare Advantage plan. For both plans you will probably still be required to enroll in Medicare Parts A & B and possibly Part D. If your employer provides prescription drug coverage, it must be “creditable” or you will have to pay a penalty if you later choose to switch to Medicare Part D coverage. (Your employer can tell you whether its plan is “creditable”).

2. If you were unemployed prior to retirement and didn’t have coverage under your spouse’s employer, then you need to do one of the following:
   • Enroll in a Medicare Advantage Plan (Medicare Part C) that includes Medicare Parts A, B & usually Part D, or
   • Enroll in Medicare Parts A and B, and then purchase prescription drug (Part D) coverage from a private supplier. Optionally, you may want to purchase a Medigap policy for supplemental hospital and medical coverage.

Medicare Supplement Insurance (Medigap) or secondary insurance coverage picks up where Medicare leaves off, providing additional hospital, medical, and sometimes prescription drug coverage. Note that Medigap policies that are currently being sold (i.e., after January 1, 2006) can’t include prescription drug coverage. You will need to purchase this separately.

One factor to remember is that if you and your spouse are different ages and one qualifies for Medicare and the other doesn’t, you will have different primary insurance coverage and consequently different rules (co-payments, coinsurance and deductibles) for each person.