Medicare and Age 65
The following information from Bell Investment Advisors is designed to help you enroll in Medicare at the right time to ensure full medical coverage after reaching age 65.
Today’s Medicare consists of medical insurance that partially covers hospital, medical, physician, and prescription drug costs, all provided by the federal government beginning at age 65. Especially with the ever-increasing costs of healthcare, you will want to avoid paying more for private medical insurance premiums, or, worse, not have medical insurance when you need it the most!
As baby boomers retire in greater numbers, medical insurance premiums and medical health costs have become a primary concern. As this generation closes in on age 65, it should be a priority to learn about the health insurance system you’ve been paying into for the last 40 years via the federal payroll tax.
Anyone who qualifies for Social Security is also eligible to apply for Medicare three months before their 65th birthday. This is advisable because it ensures that you will be covered on the first day of your 65th birthday month. For those who continue working past 65 and who have private medical insurance, it is still important to apply even if you don’t plan on using the coverage until later in life.
Where to Start
Medicare.gov is a good place to start when you are enrolling for the first time or if you are changing coverage. Our recommendation is to visit your Social Security office in person, but you can also apply by calling 1-800-772-1213. Your local pharmacy or community center might also be a resource for information or seminars on how to enroll.
The Initial Enrollment Period (IEP) begins three months before your 65th birthday month, lasts through both the month of your birthday, and the three months after your birthday month. This equates to a seven-month window in which to apply for Medicare. [Note: If you have a qualifying disability, you are eligible to apply earlier than age 65.]
When to Enroll
If you enroll the month before your 65th birthday, coverage starts on the first day of your birthday month. If you enroll during your birthday month or later, coverage starts on the first day of the month following the date you enroll. This delay could mean that you might be without insurance when you need it. It is very important to check with your current private insurance and with Medicare to ensure there is overlap between the two.
Medicare consists of different types of medical coverage, each with different rules. Part A covers hospital insurance, and Part B covers medical insurance, both offered by the federal government. Part D covers prescription drug coverage offered by private insurance companies. You should sign up for each of these parts (A, B, & possibly D) by age 65.
Lastly, there is Part C, which covers the Medicare Advantage Plan. Part C packages Parts A, B, and sometimes D, and is an alternative to the original Medicare. Medicare Advantage plans are offered by private insurance companies, not the federal government.
Since Medicare only pays for part of your medical costs, there are also additional private insurance plans called Medicare Supplemental Insurances, or Medigap plans, that help pay for the portion of medical costs that Medicare does not fully cover. You’ll need to review the resource sites listed at the end of this article to thoroughly understand the different types of coverage and options.
After initially enrolling in Medicare at age 65, you may decide a change is needed to your Medicare Advantage (Part C) or Medicare prescription drug coverage (Part D). For changes after your initial enrollment on Part C and D, changes can be made during the Medicare open enrollment period, October 15 through December 7.
What happens if you forget to sign up for Medicare when you turn 65?
If you don’t sign up during your initial enrollment period (IEP), you are eligible to sign up for Medicare (Parts A & B) from January 1 through March 31. Your coverage then starts on July 1.
Penalties for Late Enrollment
Not signing up for Medicare during your initial enrollment period (IEP) may hit your pocketbook for life, so it’s extremely important to enroll in Medicare at the right time! The penalties for not signing up during IEP are quite high. For Part A, the penalty is an additional 20% of your premium added for each year you didn’t enroll after you became eligible. For Part B, the penalty is 10% per year for each year you missed after you became eligible. These penalties affect your premiums for life. The bottom line is: make sure you sign up for Medicare during your initial enrollment period (IEP).
In summary, you will want to begin applying for Medicare before your 65th birthday to ensure you have continued coverage even if you still have private medical insurance. For Parts C, D, and any Medigap plan, you will want to shop around and choose the right plan that fits your needs and budget. If you do need to make changes to Parts C or D after your initial enrollment period, you will be able to change during Medicare open enrollment. Lastly, if you forget to sign up at age 65, there could be stiff penalties that last a lifetime.