Turning 65 years old this year?
That’s the magic age when older workers or retirees can apply for Medicare benefits. Medicare is the name of the federal health insurance program for anyone 65 and older. Signed into law in 1965, Medicare has been providing medical coverage to seniors as they approach then end of their working years.
But, signing up for Medicare can be daunting, and as you approach 65, you’ve seen lots of advertising about different Medicare plans.
If you want Medicare at 65 and are not sure how to start the sign-up process, read here to learn how to apply.
Initial Enrollment Period
Your first step is to determine exactly when you are first eligible to sign-up for Medicare. This is called your Initial Enrollment Period, or IEP.
Your IEP is a seven-month period, which includes the three months before and the three months following your 65th birthday. For example, if your 65th birthday is June 1, your IEP runs from February 1 to August 31. You can, but are not required to, sign up for Medicare Parts A, B, C, and D during this time.
There is a General Enrollment Period each year from January 1 through March 31 when you can sign up if you didn’t already during your IEP. But you may incur a penalty for not taking Medicare at age 65 during your IEP.
There is also a Special Enrollment Period, which allows for penalty-free sign-ups under certain conditions. For example, you can enroll in Medicare without penalty for up to eight months after you lose your group health coverage or you or your spouse stops working, whichever is earlier.
Working at 65?
If you are turning 65 and are already receiving Social Security benefits, you will automatically be enrolled in Original Medicare, (Parts A and B) and your Medicare ID card will arrive in the mail.
If you are working and not collecting SS benefits at age 65, you can forgo Medicare enrollment for a time, as long as your employer is the PRIMARY provider of your medical insurance needs. If your job employs fewer than 20 people, however, you must sign up for Medicare as your employer cannot be considered the primary in this case.
Make sure you contact your employer’s HR department to be aware of any coverage they will still offer to you, and how much you must pay in premiums for that coverage.
Remember if you are working, you will need to manually sign up for any Medicare plan, either online, in person at the Social Security office, or with an agent.
Medicare comes in different “parts” or different types of health coverage. Here’s a brief explanation of each:
- Medicare Part A includes MOST inpatient hospital care, skilled nursing facility care, home health care, and hospice care. If you have worked most of your life, you have already paid for the majority of your Part A benefits through Social Security deductions in your paycheck. However, there are copays and coinsurance that will be out-of-pocket for you.
- Part B is medical insurance. It covers MOST medical services and supplies that are required to diagnose or treat your medical condition. It also includes preventative services like checkups. Again, there could be copays and deductibles.
- Part C is called Medicare Advantage. It differs from Orignal Medicare in that it is not administered by the government, but by private insurers. As an alternative to Original Medicare, Medicare Advantage plans cover all of your Part A and B benefits plus extra coverage for dental, vision, hearing, or prescription drugs. However, you need to stay in an approved provider network to use this option.
- Part D is prescription drug coverage. It is a stand-alone policy from Parts A and B and is optional, but usually a needed plan for most seniors.
- Medicare Supplements also known as Medigap, are supplemental plans to Orignal Medicare (that is, NOT Part C) that you can buy to cover deductibles or copays. For example, Original Medicare only pays about 80% of doctor and outpatient visits, but with a Medicare Supplement plan, most of these remaining costs can be covered.
Notice that Original Medicare (Parts A and B) is quite basic, and does NOT include prescriptions, dental, vision, or hearing loss coverage. You will either need to buy Plan C to obtain all of this coverage or compliment your A and B plans with a supplemental plan.
What to Choose?
Signing up for Medicare at 65 is like piecing a small jigsaw puzzle together, using your personal circumstances and needs as the puzzle pieces. Out-of-pocket costs will be the largest determiner of your choice. And, those costs vary from plan-to-plan.
It is best to find an advisor who can help you examine what is available to you, given your health needs and past work life. Online sites such as medicareonvideo.com will walk you through all the different parts of Medicare, and help you to determine what kind of benefits are best.
An online calculator can give you a sense of what premiums you might have to pay under both Orignal Medicare and Medicare Advantage plans. Use this to compare plans from different providers, and start this research long before your birthday, as it is best to apply for your chosen plan at least a month before you turn 65.
Changing Your Plan
In addition to the enrollment periods listed earlier, there is an Annual Enrollment Period each year from October 15 to December 7, where you can make changes in your plan.
For example, you can stop an Advantage plan (Part C) to return to Original Medicare or visa-versa. You can switch Part C or D plans or even sign up for Part D without penalty if you didn’t get it earlier.
So, don’t panic if your first choice of a plan package is not quite right. You can easily change to something more appropriate.
Signing Up For Medicare at 65
Before signing up for Medicare at 65, get to know of basic Medicare plans and terms by doing some online research. This will help you work well with your consultant so that together you will understand your eligibility and what plan is best for you.
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