Turning 65?

For many people, turning 65 means getting started with Medicare. That process can feel daunting, but it doesn't have to be. Here, we will take a quick look at the steps involved.

First, let's understand what "enrolling in Medicare" means. For the purposes of this discussion, enrolling in Medicare means getting your Part A and Part B medical coverage from the Centers for Medicare & Medicaid Services, or CMS. CMS is a branch of the Federal Government, and enrollment is usually facilitated through the Social Security Administration. Part A is your hospital coverage, as well as skilled nursing care and hospice care. Part B is your outpatient coverage, and includes care by your physician, some preventative services, and medical supplies.

Next, let's understand when to enroll: Your Medicare Initial Enrollment Period, or IEP. Your IEP is a seven month window that begins three months prior to your birth month, includes your birth month, and extends to the three months after. So for example, if your 65th birthday occurs during the month of May, your IEP begins February 1 and continues through August 31. Your Medicare coverage will begin May 1 as long as you enroll prior to that date.

If you don't enroll in Medicare during your IEP, you can do so later. However, you may experience a gap in coverage if you do so. That's because you will have to wait and enroll during the General Enrollment Period for Medicare which occurs from January through March each year, with coverage beginning on July 1. In addition to having a gap in your medical coverage, you may also incur late enrollment penalties on your Part B coverage. Those penalties continue for your lifetime. So in most cases, it's important to enroll in Medicare in the seven month window around your 65th birthday.

There are times, however, where you may choose to delay your Medicare enrollment and are able to do so without paying a Part B penalty. Usually this is a situation where you have another source of medical coverage such as through your employer (if you will continue to work after age 65.) Medicare Part B has a monthly premium cost associated with it. In 2021, that premium amount is $148.50, and it is deducted automatically from your social security payment if you are receiving one. (Some people may pay a higher amount for their Part B coverage if their income exceeds certain thresholds. ) Obviously, people who have medical coverage already might not want to pay a premium for Medicare Part B that they don't need.

You are eligible to delay your Part B coverage without penalty if you can show that you have other coverage that is "creditable." Creditable coverage is coverage that the government deems equivalent to or better than the coverage you would receive through Medicare. Again, this coverage is most often due to continuing employment, or the employer policy of a spouse. If you have creditable coverage, you can delay your Part B without penalty, and your IEP begins the month after that coverage ends. The best way to tell if your coverage is creditable is to talk with your HR department, or whoever it is that administers your current health care plan.

How do you enroll in Medicare Parts A & B? If you are already receiving social security benefits when you turn 65, your enrollment will be automatic. In this case, you won't have to do anything except wait for your Medicare card to arrive. (However, if you are automatically enrolled in Part B and you don't want the coverage because you have other, creditable coverage, you will need to contact your social security office to disenroll.)

If you aren't receiving social security benefits when you turn 65, you will need to actively enroll to trigger your Medicare Parts A and B start dates. Ideally, you will want to start this process at the very beginning of your IEP, three months before your birthday month. You can enroll in Medicare Part A and/or Medicare Part B online at www.SocialSecurity.gov or by calling Social Security at 1-800-772-1213 (TTY users 1-800-325-0778), Monday through Friday, from 7AM to 7PM. Usually you can also apply in-person at your local Social Security office, but it is important to check the social security website for current Covid-19 restrictions related to in-person enrollment.

There are other things to consider during the three month window before you turn 65. Most importantly, you will need to understand what Parts A and B cover, and what they do not. For example, Parts A and B (also called "Original Medicare") do not cover prescription drugs. Both Parts A and B have deductibles, or amounts you will pay out of pocket before coverage begins. Neither A nor B have "out of pocket maximums." This means there is no limit to your financial liability if you have a health emergency and your costs exceed the thresholds of what Part A and/or Part B will cover. Original Medicare does not cover vision or dental services, or hearing aids. For these reasons and more, many Medicare-eligible individuals choose to augment their Original Medicare coverage by purchasing plans that either 1) supplement their Medicare coverage by covering costs not covered by original Medicare, or 2) by replacing their Original Medicare coverage with a Medicare Advantage Plan (offered specifically to Medicare beneficiaries by private insurance companies under contract with the Federal Government) that offers broader coverage with less exposure.

How do you decide if you need extra coverage, and what kind of extra coverage is right for you? You can find a lot of useful information online, including at the CMS website. But many people choose to get help in navigating the decisions around their health care coverage after age 65.

Independent Medicare insurance agents (who are not affiliated with the federal government or the Medicare program) can often offer valuable assistance. These professionals have specific knowledge about how your income might affect your premiums. They understand the rules around penalties related to delays in Part B coverage, as well as those that can be incurred with delays in prescription drug coverage. They can review formularies to help ensure your prescriptions are covered, and covered at the lowest annual cost. They can advise you as to plans that might require underwriting if you wait to enroll. They can discuss your financial situation weighed against your health care needs. Medicare insurance agents understand which plans are available to you based on where you live, and can look for coverage that will enable you to see the doctors and specialists you trust. The assistance provided to you by most Medicare insurance agents is available at no cost to you, the beneficiary. If you have questions specific to your enrollment in Medicare, or decisions you will be making as you approach your 65th birthday, be sure to reach out for help!