When and How to Enroll in Medicare

It’s always best to start early because the rules and deadlines for Medicare enrollment can be confusing. Here’s what you need to know…

 

Firstly, Medicare has two parts: Part A, which is your hospital coverage and has no monthly premium for most people, and Part B which is your Medical coverage (doctor’s visits and other medical services).  Part B costs $104.90 per month for most enrollees in 2015.

 

 

Everyone is eligible for Medicare at age 65, even if your full Social Security retirement age is 66 or later.

 

You can enroll any time during the Initial Enrollment Period (IEP), which is a seven-month period which starts three months before your 65th birth month, includes the month of your birth and three months after. It is a good idea to enroll when you are first eligible (three months before your birth month) to make sure your coverage starts when you turn 65.

 

If you miss this seven-month sign-up period, you will have to wait until the next “General Enrollment” which starts each year on January 1st and runs through March 31.  Your Medicare benefits will begin the following July 1st. You also might incur a 10% penalty for each year you wait beyond your initial enrollment period, which will increase to your monthly Part B premium by the penalty amount.

 

 

If you are eligible for Medicare and still working then you may have an exception to the penalty. If you have group health insurance coverage through your employer or your spouse’s employer, and the company has 20 or more employees, you have a “special enrollment period” in which you can sign up. This means that you can delay enrolling in Medicare Part B, and are not subject to the 10 percent late-enrollment penalty as long as you sign up for within eight months of losing that coverage.  This would generally happen when either you or your spouse eventually retire.

 

 

Original Medicare does not cover prescription medications, so if you don’t have creditable drug coverage from an employer or union, you’ll need to buy a Part D drug plan from a private insurance company during your initial enrollment if you want coverage. Some health plans include drug coverage and some do not.  You will want to compare each of your options carefully because drug prices and co-pays can vary between different companies.  If you don’t enroll in a Part D prescription drug plan when you are eligible you’ll also have a penalty.  This is 1 percent of the average national premium ($33.13 in 2015) for every month you don’t have coverage and will also be added to your monthly premium at the time you enroll in a plan.   So, even if you do not take any medications it is wise to consider the plans available weigh the costs of the plan with the eventual penalty you may incur.

 

 

When you enroll in Medicare it is also a good idea to get a Medigap (Medicare supplemental) policy within six months after enrolling in Part B to help pay for things that aren’t covered by Medicare, such as co-payments, co-insurance and deductibles. 

 

 

Instead of getting original Medicare, plus a stand-alone Part D drug plan and a Medigap policy, you could sign up for a Medicare Advantage plan that covers everything in one plan. These plans, which are also sold by insurance companies, are generally available through HMOs and PPOs and often have cheaper monthly premiums, but their deductibles and co-pays are usually higher which makes them better suited for healthier retirees.

 

 

If you’re already receiving your Social Security benefits before 65, you will automatically be enrolled in Part A and Part B, and you’ll receive your Medicare card about three months before your 65th birthday. It will include instructions to return it if you have group health coverage through an employer that qualifies you for late enrollment without a penalty.  If you’re not receiving Social Security, you’ll need to enroll either online at http://www.ssa.gov/medicare/, over the phone by calling Social Security Administration 800-772-1213 or through your local Social Security office.

 

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