No, Medicare isn't completely free at 65; while most people get Part A (hospital insurance) premium-free if they've worked and paid Medicare taxes for 10 years, they usually pay a monthly premium for Part B (medical insurance), plus deductibles, copays, and coinsurance for services, with costs varying by income and plan.
Exemptions from Medicare tax apply mainly to specific employment situations, like certain religious objectors (Amish/Mennonite) and some foreign workers (students, temporary scholars). U.S. citizens working for foreign governments or specific state/local employees hired before 1986 (with public pension plans) can also be exempt, as can students working for their universities under certain conditions. Generally, if you have earned income and aren't in one of these categories, you'll pay the Medicare tax.
Your CalPERS health coverage will automatically be canceled the first day of the month after you turn 65. Review Cancellation of CalPERS Health Coverage for information on reinstating your health coverage.
Part A is free if you worked and paid Medicare taxes for at least 10 years. You may also be eligible because of your current or former spouse's work.
Here are some of the biggest Medicare mistakes to avoid:
Premium-Free Medicare Part A Based on Age
An individual who is receiving monthly Social Security or RRB benefits, at least 4 months prior to turning age 65, does not need to file a separate application to become entitled to premium-free Part A. In this case, the individual will get Part A automatically at age 65.
If you reach age 65 and already have comprehensive health insurance, you don't have to enroll in Medicare right away, but in some cases, enrollment at age 65 is essential to avoid gaps in coverage.
The standard monthly premium for Medicare Part B enrollees will be $185.00 for 2025, an increase of $10.30 from $174.70 in 2024. The annual deductible for all Medicare Part B beneficiaries will be $257 in 2025, an increase of $17 from the annual deductible of $240 in 2024.
Medicare Part B premiums are automatically deducted from Social Security checks, with the standard amount for 2026 being $202.90/month, but this can increase based on your income (IRMAA). Most people pay $0 for Medicare Part A, while Part C (Advantage) and Part D (Drug) plans also have premiums that can be deducted, depending on the plan and your choices.
If you don't sign up for Medicare at 65 when you're first eligible (and don't have creditable employer coverage), you risk significant, permanent late enrollment penalties for Part B (10% extra premium for each year you waited) and Part D (1% of national average premium for each uncovered month), can face gaps in coverage, and may have to wait to sign up later, potentially delaying your benefits. However, if you have high-quality employer coverage, you can delay Part B without penalty until you stop working, but should still enroll in Part A if you pay a premium, and get proof of your "creditable coverage" from your employer to avoid future penalties.
Supplemental insurance is advisable for those with Medicare to help cover out-of-pocket costs and gaps in coverage, offering financial protection for deductibles, coinsurance, and other medical expenses not fully covered by Medicare.
The "best" Medicare plan for seniors depends on individual needs, but top-rated providers for Medicare Advantage (Part C) in 2026 include Humana, UnitedHealthcare, Aetna, and Blue Cross Blue Shield (BCBS), offering nationwide coverage, large networks, $0 premium options, and extra benefits like dental/vision, while Medigap (Medicare Supplement) plans like Plan F provide comprehensive Original Medicare cost coverage. Key factors are your doctors, prescriptions, budget, and preference for network flexibility (MA) or broad coverage (Medigap).
Disadvantage 1: High Maximum Out-of-Pocket Limits
This is true. For 2023 Medicare Advantage enrollees, the average out-of-pocket limit is $5,070 for in-network services. For PPOs, the average is nearly $9,000 for both in-network and out-of-network services. These figures are expected to continue to increase.
Part A (Hospital Insurance) costs. $0 for most people (because they or a spouse paid Medicare taxes long enough while working — generally at least 10 years). If you get Medicare earlier than age 65, you won't pay a Part A premium. This is sometimes called “premium-free Part A.”
Yes, you can have both Social Security and Medicare at the same time, and they often work together, with your Social Security record qualifying you for Medicare, especially if you're 65+ or have received Social Security disability for 24 months. Most people sign up for both through the Social Security Administration (SSA).
The best people to talk to about Medicare are your local State Health Insurance Assistance Program (SHIP) (for free, unbiased advice) or your specific Medicare plan's customer service (for plan-specific questions). For enrollment, contact the Social Security Administration (SSA), while independent brokers can compare plans, and organizations like the NCOA or AARP offer resources and tools.
Vermont, Utah and Minnesota topped the Commonwealth Fund's Medicare performance scorecard in 2025, whereas Kentucky, Mississippi and Louisiana struggled the most.