None of us are exactly racing to the age of 65, but it’s good to remember that reaching retirement age can have its perks. I’ve said it before and I’ll say it again, Medicare’s benefits are undeniably strong, and they are something we should be eagerly looking forward to. Unfortunately, knowing when and how-to enroll can be a minefield. Not signing up in a timely fashion could be the difference between a seamless experience and getting nailed with a lifetime penalty.
Before we get started with our guide, it is important to understand the difference between Social Security income and Medicare health insurance. As early as 62 years old, we become eligible for the income portion — benefits are obtained by calling 800-772-1213 or online at ssa.gov. Our health insurance, however, is separately managed by The Centers for Medicare and Medicaid Services (CMS). At age 65, we become eligible for Medicare unless deemed disabled (SSDI) or you have End-Stage Renal Disease (ESRD) at an earlier age. Original Medicare, specifically Parts A and B, can be obtained by calling 800-Medicare or online at ssa.gov. With that clarification made, let’s get into our enrollment guide.
You qualify for Medicare when you reach the age of 65. Your Initial Election Period (IEP) is an important signup window spanning the 3 months before your 65th birthday, your birth month, and the 3 months after.
If you already receive Social Security income, or benefits from the Railroad Retirement system, you’ll automatically get enrolled in Original Medicare starting the first day of the month you turn 65. Your Medicare card will be mailed about 3 months before your 65th birthday. You will also receive a booklet explaining the different options available. While you are entitled to benefits, you do not have to enroll in Part B if you are covered under an employer or union plan.
If you are not receiving Social Security or Railroad Retirement benefits, you will need to sign up for Original Medicare within your IEP, explained above, yourself. To do this, call 800-Medicare, apply online at ssa.gov, or visit your local Social Security office.
For most people, Medicare Part A — which covers hospital services — was paid by your payroll taxes, costing you nothing. Everyone in the country, including our veterans, pay for Medicare Part B — coverage for medical services like doctor visits, MRIs and surgery. The cost of your Part B coverage is based on your income, though the average premium is $144.60 in 2020. If you are eligible for Medicaid, your Medicare Part B premium is covered by Medicaid.
Penalties for untimely entry
Penalties for not electing Medicare Part B when you are first eligible (excluding credible coverage like employer and union plans) increase your premium by 10% for every 12 months you could have had coverage. To add to that, you are only allowed to sign up from January through March for an effective day of July 1.
Keep in mind that Original Medicare does not cover everything. Medicare Part D — which covers prescription drugs — must be obtained when you are initially eligible or you may face an additional penalty that consists of 1% of the national average prescription drug plan for every month you didn’t have coverage.
What it Means
As you can see, Medicare enrollment is tricky and failure to understand the process can result in permanent, costly fees. As you navigate your options, be sure to enlist the help of a local Medicare agent, one that offers multiple insurance carriers, to help you find the right fit for your medical needs. Stay safe and be well.
About Dayna Schafer
Dayna is a licensed, professional Medicare agent, and a member of the Rise Community. Her agency is located in St. Petersburg, FL where she has helped thousands of individuals and Medicare beneficiaries understand their benefits by ‘Making it Make Sense’. Since 2002, Dayna has certified with triple the average amount of insurers in an effort to relentlessly seek out the right fit for her client’s healthcare needs.