Which parts of Medicare do you need? What do they cover? How much do they cost? How do you get coverage? Many people have these same questions, and in this blog series, we are taking a closer look at Medicare to make it easier for you to navigate the journey.

We’ll cover Part A and B — also known as Original Medicare — as well as Medicare Advantage coverage (Part C), Medigap plans and prescription drug coverage (Part D). We’ll also address how and when you should sign up for Medicare and how to help a loved one understand their Medicare options.


When The Beatles wrote “When I’m 64,” they forgot the verse that talks about what you should be doing about Medicare coverage.

It’s never too soon to learn how Medicare works (especially if you’re helping a parent or friend to sign up for it). But if you’re going to be turning 65 soon or are already there, you’ll want to understand when and how to enroll in order to avoid any penalties or gaps in health care coverage.

 

Some people are eligible for Medicare before they turn 65. Generally speaking, if you are under age 65, you will qualify for Medicare if:

  • You have end-stage renal disease (ESRD)
  • You have received Social Security Disability Income (SSDI) payments for 24 months
  • You have received SSDI in the first month of disability for ALS (“Lou Gehrig’s Disease”)

There are four main parts of Medicare: Parts A, B, C and D. Parts A and B are also known as Original Medicare. Part C is known as Medicare Advantage, and Medicare Part D consists of prescription coverage.

Signing Up for Medicare at Age 65

You may be automatically signed up for Medicare Part A and Part B if you’re already getting Social Security benefits when you turn 65. If not, you can sign up through the U.S. Social Security Administration anytime during the seven-month period that begins three months before the month of your 65th birthday and ends three months after the month of your 65th birthday.

If you don’t enroll in Original Medicare when you are first eligible, you can sign up between Jan. 1 and March 31 each year. Regardless of when in that date span you sign up, your coverage will begin July 1.

But keep in mind that enrolling late could cause problems. You may have to pay a higher Part B premium for not signing up on time. The increased premiums would last as long as you are on Medicare.

Enrolling in Medicare sooner rather than later is best in order to be covered when you need it.

If you don’t sign up for Medicare because you’re employed and still covered by your employer’s health plan or covered by your spouse’s plan, you can sign up …

  • As soon as you know you’ll be leaving, or
  • During the eight-month period that begins the month after your employment or coverage ends; whichever happens first.

You will usually be able to avoid a penalty for late enrollment in this case.

If You’re 65 and Still Working, Do You Need Medicare?

Many people these days are deciding to delay retirement beyond the age of 65. The age at which you can receive full Social Security benefits is now 66 and likely to rise in the future. More than one-third of Baby Boomers are waiting for that extra year before they collect benefits, and some are opting to retire at age 70 to maximize their Social Security benefits. Other reasons to delay vary from simple enjoyment of their job to financial need.

If you plan to stay in the workforce, depending on where you work, you’ll need to understand a few things about Medicare.

  • If you work for a company with more than 20 employees, you’ll want to enroll in Medicare Part A as soon as you’re eligible three months before your 65th birthday. It’s free, and you’ve earned it. Plus, it’ll save you the hassle when you retire.
    • You probably don’t want to enroll in Part B until you retire, though, since you’ll have to pay the premiums. But when you do retire, remember that you have only eight months from the day you leave work to enroll in Part B.
  • If you work for a company with fewer than 20 employees, consider enrolling in Parts A and B as soon as you’re eligible three months before your 65th birthday.
    • Here’s why: Your small company’s insurance plan won’t pay for anything that Medicare will cover after the age of 65. In fact, if you decline to enroll in Part A and/or Part B, and your insurance company discovers you’ve had services that should have been covered by Medicare Part A or Part B, your insurance company will pursue you for a reimbursement of the costs.
  • If you get a new job after turning 65, consider whether you should use that as an opportunity to change health plans. If you are married and your retiree plan from the previous employer covers an under-65 spouse, you might want to keep the plan. You cannot re-enroll in certain retiree plans once you end your coverage. If you’re married, and you lose your new job, your spouse could be without coverage until age 65.
  • If you’re self-employed and don’t have a retiree plan, sign up for Medicare Parts A and B as soon as you can. The costs may be tax deductible as a business expense.
  • If your current health insurance plan covers prescription drugs and it’s at least as good as what you’d get through Medicare Part D (they call this “creditable coverage”), consider delaying getting Part D coverage until you retire.
    • If your current plan is creditable, you won’t have to pay any penalty when you enroll in a Part D plan within two months of losing your employer coverage.

Whether you plan to retire at 65 or continue to work, be sure to find out all of the Medicare options that are available to you so that you are covered when you need it.

 

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