However, for some of us, that time is advancing rapidly. And as complicated as this whole Medicare sign-up is, it’s probably not a good idea to wait until the last minute.
If Medicare is closer than it appears for you or a family member, this series on Medicare basics may help.
- Did you know there are consequences to not signing up when first eligible?
- Do you know what those consequences are?
My huge disclaimer before we trudge on.
I am not an attorney or health care provider and cannot provide legal or health care advice. The information provided is for your general background only, and is not intended to constitute legal, insurance or health care advice as to your specific circumstances. I recommend reviewing your options with a qualified insurance adviser.
In the good old days when everyone retired at age 65, Medicare sign-up was part of the deal. You started collecting your social security benefits and signed up for Medicare.
Then events started changing.
- Congress expanded Medicare coverage to people with certain disabilities or conditions
- More people delayed retirement and worked beyond age 65
- Social Security increased the retirement age
- Medicare changed primary reimbursement rules (who pays first – employer-sponsored plans versus Medicare)
So, for someone in my age bracket, we cannot collect full social security benefits until age 66 (instead of the previous 65). Depending on your year of birth, it could be increased to as much as age 67.
Medicare sign-up did not change. It is still age 65 (assuming you are not collecting social security or qualify for Medicare before age 65). As discussed in the first Medicare Basics post, your first sign-up period starts three months before the month of your birthday. Coverage will not start before the first of the month of your birthday month.
Medicare or Not
You’re thinking (or maybe that’s just us old folks), what if I don’t retire at age 65? Do I still have to apply?
The simple (?) answer is you don’t have to but if you don’t, you may be penalized – in the pocket (or pocketbook). I’ll talk about those penalties in a bit, but let’s try to make sense of the best time for signing up.
MyMedicareMatters.org has some great tools to help untangle this web called Medicare. Let’s break this down into simple bites. Their graphic below shows the Initial Enrollment Period (the first time you or a family member signs up for Medicare).
Go to their webpage if you want to click on the Learn More… button.
The biggest question seems to be – what if I’m still working?
I adapted a previous graphic to act as a guide only. Like I’ve said, there are many moving parts, so your answer can change depending on your specific circumstances.
For Part B, Medicare applies a 10% penalty fee if you don’t sign up when first eligible. That penalty keeps on growing for each year you delay enrolling.
The monthly premium for Medicare Part B in 2016 is $121.80. Let’s say you were first eligible two years ago but are just now signing up. You would pay an extra 20% on your monthly premium for as long as you have Part B.
Part D (prescription drug coverage) can also have penalties applied for late enrollment. Medicare.gov offers tips on how to avoid Part D penalties.
Remember those moving parts? They really make a difference. For example, the following are a few of those differences.
- Health Savings Account – You cannot contribute to a health savings account (HSA) after enrolling in Medicare Part A and/or Part B.There’s a whole host of special rules for HSAs.
- Veterans with VA Benefits – Also TRICARE and CHAMPVA coordinate in different ways with Medicare.
Rather than list out all the moving parts, I recommend (again) using the MyMedicareMatters.org site. The screenshot below is on their webpage, Am I eligible for Medicare?
Find your specific circumstance and click on the green + sign (at the website) to expand the information that applies.
What You Don’t C
You may have noticed (I know you were hanging on every word) that there’s no mention about Part C (Medicare Advantage or Medigap Plans).
As you may suspect, there’s a bunch of rules about that, too. So we’ll talk about Part C in the next post.
I wish I could make this simpler. However, we are talking legislation. Hang tough.
Notice of Disclaimer –Cathy Miller is not an attorney or health care provider and cannot provide legal or health care advice. The information provided is for your general background only, and is not intended to constitute legal or health care advice as to your specific circumstances. We recommend you review legislation with legal counsel and visit your physician for health care issues.