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. The first thing you need to do is to enroll in "Original Medicare," which consists of Part A and Part B coverage provided by the Federal government. 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 the month after you enroll. In addition, you may incur late enrollment penalties on your Part B coverage. Those penalties continue for your lifetime. So in many cases, it's important to enroll in Medicare in the seven month window around your 65th birthday, with a few notable exceptions.
You can delay your Part B enrollment without penalty if you have other medical coverage. Usually this is a situation where you or your spouse will continue to work after you turn 65 and have coverage through an employer. The reason you might want to wait in this instance is because Medicare Part B has a monthly premium cost , which 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. ) For obvious reasons, people who have employer-sponsored medical coverage will want to avoid paying the premium for Medicare Part B coverage that they don't need. (In these cases you will want to consider enrolling in premium-free Part A even if you have employer coverage, but there are some factors that may influence that decision. Click here to learn more.)
But be aware that you are only 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. 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 any 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, Original Medicare does not cover prescription drugs, nor does it cover vision or dental services, or hearing aids. And there are still out-of-pocket costs that you will incur with Original Medicare: Parts A and B both have deductibles and co-insurance, which are amounts you will continue to pay for services received. Unfortunately, Original Medicare does not have an "out of pocket maximum." This means there is no limit to your financial liability if you have a health emergency.
For these reasons and more, many Medicare-eligible individuals choose to augment their Original Medicare coverage by 1) supplementing their Medicare coverage via a Medigap plan, which pays the Part A and B deductibles and co-insurance 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, in order to secure broader coverage with less exposure. And you will need to secure prescription drug coverage (either as part of your Medicare Advantage plan, or for those who stick with Original Medicare you will need to enroll in a Part D prescription drug plan.)
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 as they approach age 65, or retirement, or both.
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 coverage. They can review formularies to help ensure your prescriptions are covered, and covered at the lowest annual cost. 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. 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! (P.S. If you are interested in determining whether you should enroll in Medicare when you turn 65 or wait until you retire, click here.)