Is your 65th birthday approaching? We’d like to be the first to congratulate you on this milestone! It’s an exciting time in anyone’s life, but there are a lot of things to consider—including Medicare.
Medicare is the federal health insurance program for people who are 65 or older (as well as certain younger people with disabilities, and people with end-stage renal disease). Original Medicare, which we’re focusing on today, includes Medicare Part A and Medicare Part B.
Whether you’re preparing to retire when you turn 65, or you still have some working years left, it’s important to understand your Medicare options and know when to sign up. Missing deadlines could result in penalties, which could affect your retirement budget for years to come.
We know you don’t want to pay more than you need to for Medicare, so we’re here to help with some guidelines on when to sign up for Original Medicare. As you’ll discover, the sign-up period for Medicare Part A is pretty cut-and-dried, while there are a few more things to consider for Medicare Part B. Let’s get into the nitty-gritty…
Medicare Part A
Medicare Part A provides partial coverage for inpatient hospital stays, skilled nursing care and some in-home health care services. If you or your spouse worked and paid Medicare taxes for at least 10 years, you’re eligible for premium-free Part A.
As this applies to most, the majority of people should enroll in premium-free Medicare Part A when they’re first eligible during their Initial Enrollment Period—even if they still have employer-sponsored health insurance. The Initial Enrollment Period is the seven-month period that begins three months before they turn 65, includes their birth month and ends three months after they turn 65. You can sign up for Medicare Part A online or contact your local Social Security office, where they’ll review your records and determine your eligibility.
Medicare Part B
Medicare Part B provides partial coverage for a long list of medical services, including doctor visits, outpatient care, outpatient procedures, mammograms, cancer treatment and more.
Most people pay the standard Part B premium, which is $144.60 for 2020.1 If you still have health insurance coverage through your employer, or your partner’s employer, you obviously don’t want to needlessly double up on your premiums. That in mind, here’s what you need to know about when to sign up for Medicare Part B:
If you’re turning 65 and need health insurance coverage…
If you won’t have employer-sponsored coverage when you turn 65, you should sign up for Medicare Part B during your Initial Enrollment Period (the seven-month period that begins three months before you turn 65, includes your birth month, and ends three months after you turn 65). You can sign up for Medicare Part B online or contact your local Social Security office, where they’ll review your records and determine your eligibility.
If you’re turning 65 and you still have health insurance coverage through an employer…
Whether your health care coverage is through your own employer, or your partner’s, having this coverage in place means you don’t need to sign up for Medicare Part B when you turn 65—and you usually won’t be penalized for deferring coverage.
When you lose your employer-sponsored health care coverage (whether it’s yours or your spouse’s), you need to go ahead and sign up for Medicare Part B. In this situation, you should qualify for a Special Enrollment Period. A Special Enrollment Period is a time outside your Initial Enrollment Period, or the Open Enrollment Period when you can sign up for Medicare. You qualify for a Special Enrollment Period if you experience certain life events, including losing health care coverage.
Your Special Enrollment Period typically starts the month after the employment ends, and lasts for eight months. Contact your local Social Security office, where they’ll review your records and determine your eligibility.
If you didn’t sign up during your Initial Enrollment Period, and you don’t qualify for a Special Enrollment Period…
You can enroll in Medicare Part B during the General Enrollment, which runs from January 1 through March 31 annually.
In this situation, because you didn’t get Part B when you were first eligible, your monthly premiums could go up 10% for each 12-month period you could’ve had Part B, but didn’t sign up. The penalty increases the longer you go without Part B coverage. In most cases, you’ll have to pay the penalty each time you pay your premiums, for as long as you have Part B.
To avoid penalties, it’s crucial to sign up for Medicare Part B during your Initial Enrollment Period—or have employer-sponsored health insurance coverage that grants you a Special Enrollment Period!
Medicare can be confusing, but we’re here to help!
Many Bankers Life agents are experts on Original Medicare, Medicare Advantage and Medicare Supplement insurance. If you have questions about your coverage, please reach out and let us know how we can help. Get started finding a local agent HERE.