Turning 65 has some advantages, one of which is being eligible for Medicare insurance. Medicare can be helpful, yet the choices can be confusing, so it’s important to talk to a trusted advisor, rather than being swayed by television commercials and mail offers. Medicare coverage needs are not the same for everyone, so you need to find the best solution for your particular needs.
WHEN SHOULD I SIGN UP FOR MEDICARE?
There is a seven-month Initial Enrollment Period (IEP) that begins three months before you turn 65, and includes your birth month, then ends three months later. For example, if you turn 65 in August, your IEP begins May 1 and ends November 30. During this time, you may enroll in a Medicare Supplement without answering any health questions. You may also enroll in a Part D prescription drug plan (PDP).
If you continue working past your 65th birthday and participate in your employer’s health plan, you are not required to contact Social Security until you are ready to stop working. At that time, you will have a limited time to contact Social Security and get your Parts A & B initiated. I suggest calling three months before you expect to retire to give them time to get your application processed and your card issued.
You will have eight months to sign up after you or your spouse (or your family member, if you’re disabled) stop working or you lose group health plan coverage (whichever happens first). Your 8-month Special Enrollment Period (SEP) starts when you stop working, even if you choose COBRA or other coverage that’s not Medicare.
LATE ENROLLMENT PENALTY FOR PARTS A & B.
If you miss your seven-month Initial Enrollment Period, you may have to wait to sign up and pay a monthly late enrollment penalty for as long as you have Part B coverage. The penalty goes up the longer you wait. Generally speaking, you may have to pay a 10% surcharge on Medicare Part B premiums for each year you go without coverage starting the month you're eligible for coverage. You'll have to pay this penalty each time yo u p ay your premiums for as long as you have Part B.
LATE ENROLLMENT PENALTY FOR PART D PRESCRIPTION DRUG PLAN (PDP).
Even if you do not take prescription drugs now, you should consider joining a Medicare drug plan or a Medicare Advantage Plan with drug coverage to avoid a Late Enrollment penalty.
If you are still working and participate in your employer’s health plan, please make sure it includes creditable coverage! Your plan must tell you each year if your non-Medicare drug coverage is creditable coverage. If you go 63 days or more in a row without Medicare drug coverage or other creditable prescription drug coverage, you may have to pay a penalty if you sign up for Medicare drug coverage later.
HOW MUCH MORE WILL I PAY FOR A LATE ENROLLMENT PENALTY ON MY PDP? The cost of the late enrollment penalty depends on how long you didn’t have creditable prescription drug coverage. Currently, the late enrollment penalty is calculated by multiplying 1% of the “national base beneficiary premium” ($33.37 in 2022, $32.74 in 2023) by the number of full, uncovered months that you were eligible but didn’t enroll in Medicare drug coverage and went without other creditable prescription drug coverage. The final amount is rounded to the nearest $.10 and added to your monthly premium. Since the “national base beneficiary premium” may increase each year, the penalty amount may also increase each year.
SPECIAL CONDITIONS FOR ENROLLMENT PRIOR TO AGE 65. You may be eligible to get Medicare earlier than age 65 if you have a disability, End-Stage Renal Disease (ESRD), or ALS (also called Lou Gehrig's disease).
ANNUAL ENROLLMENT PERIOD (AEP).
Medicare’s AEP runs from October 15 to December 7 each year. During that time, you can make changes to your Part D prescription drug plan or your Medicare Advantage plan. If you have Medicare Supplement, you can make changes any time during the year.
WHO CAN YOU CALL FOR ANSWERS? We represent several carriers, so we will help find the best plan for your specific needs. Please give me a call at (806) 549-9029 so we can set up a time to visit about your particular situation. We want to help!
Carrie Blair is a Medicare consultant based in Dickens and Motley Counties, in West Texas.
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