What Are Cases When Medicare Automatically Starts
Medicare will automatically start when you turn 65 if youve received Social Security Benefits or Railroad Retirement Benefits for at least 4 months prior to your 65th birthday.
Youll automatically be enrolled in both Medicare Part A and Part B at 65 if you get benefit checks. According to the Social Security Administration, more than 30% of seniors claim Social Security benefits early.1 For those seniors, Medicare Part A and Part B will automatically start when they reach the age of 65.
When do You Get Your Medicare Card?
You can expect to receive your Medicare card in the mail three months before your birthday. Your Medicare card will come with a complete enrollment package that includes basic information about your coverage. Your card wont be usable until you turn 65, even though youll receive the card before that time.
What Are Your Costs?
Keep in mind that youll still have to pay the usual costs of Medicare, even though youre automatically enrolled. Once your Medicare is active, the cost of your Part B premium will be deducted from your Social Security or RRB benefits.
What If You Already Enrolled in Medicare?
What about Medicare Supplement ?
What If I Switch to Medicare Advantage?
What I Have Part A?
Nearing Age 65 What You Need To Know About Medicare
- If you don’t sign up for Medicare when first eligible and don’t have qualifying coverage elsewhere, you’ll pay life-long penalties for enrolling late.
- Some people are automatically enrolled and others need to take action on their own.
- Medicare doesn’t cover everything, which means preparing for those gaps in coverage.
If you’re getting close to celebrating your 65th birthday, it’s time to review how Medicare will fit into your life.
Whether you’re still working or not, it’s best to make sure you understand the rules for signing up instead of making assumptions that could cost you down the road.
“If you don’t enroll and don’t have coverage from an employer, you could end up getting late-enrollment penalties that stick with you for the rest of your life,” said Danielle Roberts, co-founder of insurance firm Boomer Benefits in Fort Worth, Texas.
Each day, about 10,000 baby boomers in the U.S. turn 65. Fidelity Investments estimates that the average couple will spend a whopping $280,000 on health care from that age on.
This makes figuring out your Medicare coverage a key part of managing your expenses. Here’s what you need to know to get you started.
If You’re Still Working
The rules for enrolling are different if you are actively working and you get health insurance from your employer.
If your company has 20 or more employees, you can delay signing up for Medicare without facing late-enrollment penalties. Generally speaking, the employer will alert the program that you have qualifying coverage. Once you stop working, you get up to eight months to sign up.
Or, you can go ahead and enroll in Parts A and/or B. Be aware, though, that in this case your employer health care would be your primary coverage and Medicare would only pick up the tab if the primary policy doesn’t cover a service but Medicare does. This means that if you sign up for Part B, you’ll be paying a monthly premium whether the coverage is used or not.
Roberts said many people who continue to get primary coverage through their employer sign up for Part A and delay getting Part B.
Meanwhile, if your company has fewer than 20 employees, you likely would need to sign up because in that situation, Medicare would be your primary insurance. The policy through your employer would only pay if Medicare doesn’t cover the service and it does.
“In this situation, the insurance company knows that when you’re 65, Medicare is your primary insurance and they are secondary,” Roberts said. “They often aren’t going to pay the portion that Medicare would normally pay.”
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Sign Up: Within 8 Months After You Or Your Spouse Stopped Working
Avoid the penalty & gap in coverageIf you miss this 8-month Special Enrollment Period, youll have to wait to sign up and go months without coverage. You might also pay a monthly penalty for as long as you have Part B. The penalty goes up the longer you wait to sign up. How much is the Part B late enrollment penalty?
Should You Wait Until 65 To Sign Up For Medicare
If you wait to sign up right before your 65th birthday , you may go for months without coverage.
Initial Enrollment Period
Your Initial Enrollment Period will last for 7 months. This Initial Enrollment Period begins 3 months before the month of your 65th birthday and ends 3 months after your birthday month. If you fail to enroll before your birthday month, your coverage will be delayed by a month or more.
General Enrollment Period
Youll have the option to sign up during the General Enrollment Period which falls between January 1 and March 31 every year if you didnt sign up during the Initial Enrollment Period. But youll potentially be charged a late enrollment penalty. Your premiums for Part B will be permanently increased by 10% for each year that you neglected to sign up for Part B and your monthly premiums for Part A will temporarily increase by 10%. As a rule, most people dont pay premiums for Part A, but then again, most people dont delay signing up for Part A. Your coverage will start on July 1, three months after the General Enrollment Period ends.
You may be able to avoid the late enrollment penalty and having to wait for the General Enrollment Period if you qualify for a Special Enrollment Period.
Special Enrollment Period
Its important to check with your insurer or HR department to make sure that your coverage is sufficient to postpone Medicare enrollment.
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How Does Cobra Affect The Decision Of When To Enroll In Medicare
In most cases, after a persons employment ends, they may continue to receive coverage from their group health plan for 18 months. This continued coverage is called COBRA. The premiums of the plan may cost more during this period.
To avoid a Medicare penalty, an individual must enroll in Part B within 8 months after their employment ends. This is a requirement whether or not someone is receiving COBRA.
Once a working person enrolls in original Medicare, parts A and B, they are eligible to join two other Medicare programs to get additional coverage: Part D, which provides prescription drug coverage, and Medigap, which is Medicare supplement insurance.
Medigap helps pays 50100% of parts A and B out-of-pocket costs less deductibles and premiums.
Someone with original Medicare may also choose to switch to Medicare Advantage , which is the alternative to parts A and B.
Advantage plans provide the hospital and medical insurance of original Medicare, but many also include prescription drug coverage. Some plans offer extra benefits, such as dental and vision care.
What Should I Do As I Am Waiting To Reach The Medicare Eligible Age
If you retire at 62, your wait for your Medicare eligible age may only be 3 years. As you wait, you can start researching about Medicare so that you are prepared to make well-informed coverage decisions. For example, you may not know that:
- Original Medicare doesnt generally cover prescription drugs you take at home. You can get coverage for prescription drugs through Medicare Part D, which is offered by private insurance companies contracted with Medicare.
- Original Medicare generally doesnt cover routine dental, hearing aids, or eyeglasses. You may be able to get coverage for these benefits through a Medicare Advantage plan offered by a private insurance company. Medicare Advantage plans must cover everything Original Medicare covers, with the exception of hospice care, which is still covered by Part A.
- Original Medicare has no out-of-pocket maximum. To get help paying for out-of-pocket costs such as copayments, coinsurance, and deductibles, you can get a Medicare Supplement insurance plan, also offered by private insurance companies.
New To Medicare?
Becoming eligible for Medicare can be daunting. But dont worry, were here to help you understand Medicare in 15 minutes or less.
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Sign Up: Within 8 Months After Your Family Member Stops Working
- If you have Medicare due to a disability or ALS , youll already have Part A .
- Youll pay a monthly premium for Part B , so you may want to wait to sign up for Part B.
Avoid the penalty & gap in coverageIf you miss this 8-month Special Enrollment Period, youll have to wait to sign up and go months without coverage. You might also pay a monthly penalty until you turn 65. The penalty goes up the longer you wait to sign up. How much is the Part B late enrollment penalty?
If You Work At A Large Company
The general rule for workers at companies with at least 20 employees is that you can delay signing up for Medicare until you lose your group insurance . At that point, you’d be subject to various deadlines to sign up or else face late-enrollment penalties.
While everyone’s situation is different, there’s a good chance your current insurance through work is a more cost-effective option, said Danielle Roberts, co-founder of insurance firm Boomer Benefits in Fort Worth, Texas.
This may be due to lower premiums and other cost-sharing aspects such as copays or co-insurance, or lower costs for prescriptions under the group plan.
“We often find that their insurance is already quite good and it doesn’t make sense to leave it,” Roberts said.
We often find that their insurance is already quite good and it doesn’t make sense to leave it.Danielle Robertsco-founder of Boomer Benefits
Again, however, if Part A is free, you can sign up as long as it wouldn’t interfere with your plans to contribute to a health savings account.
There are, of course, instances where Medicare might be the better option.
“If you’re going to, say, therapy every week and it’s a $40 co-pay, it might be cheaper to go on Medicare and get a supplement with it,” Gavino said.
On the other hand, if you take a specialty drug that is covered by your group plan, it might be wise to continue with it if that drug would be more expensive under Medicare.
How To Apply Online For Just Medicare
If you are within three months of turning age 65 or older and not ready to start your monthly Social Security benefits yet, you can use our online retirement application to sign up just for Medicare and wait to apply for your retirement or spouses benefits later. It takes less than 10 minutes, and there are no forms to sign and usually no documentation is required.
To find out what documents and information you need to apply, go to the .
Eligibility For Medicare Part A
Medicare Eligibility begins at age 65 for most people.
You are eligible for Medicare Part A at age 65 if you or your spouse has legally worked for at least 10 years in the U.S. During those years, you paid taxes toward your Part A hospital benefits. This is why most Americans pay no Part A premiums when they become eligible for Medicare. Part A mainly covers your hospital stays. If you have worked and paid taxes in the US then you will be issued Medicare Part A automatically. Even if you are employed with a company with over 20 employees it makes perfect sense to have this benefit.
If you have not worked and paid taxes the required 10 years, Part A may be available for you to purchase. You can call Social Security at 1-800-772-1213, or visit your local Social Security office for more information about buying Part A.
Find out about your Medicare Eligibility
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Exceptions To Medicare Age Requirements
While you are typically not eligible for Medicare unless you are 65 and a U.S. citizen, there are some other ways that you can qualify.
If you have been receiving Social Security disability insurance for two years or more, you can be eligible for Medicare early.
You can also enroll if you have ALS or end-stage renal disease. In these circumstances, you are exempt from the requirement to have been on disability insurance for two years.
If you meet none of these requirements, you will have to wait until your standard eligibility period. According to AARP, your initial enrollment period will begin three months before the month of your 65th birthday.
There is a third part, Part C, which is also known as Medicare Advantage. Private insurers provide Part C plans which offer expanded benefits and coverage like vision and dental.
Prepare for the Medicare Advantage Open Enrollment Period
Your First Chance To Sign Up
Generally, when you turn 65. This is called your Initial Enrollment Period. It lasts for 7 months, starting 3 months before you turn 65, and ending 3 months after the month you turn 65.
Avoid the penaltyIf you miss your 7-month Initial Enrollment Period, you may have to wait to sign up and pay a monthly late enrollment penalty for as long as you have Part B coverage. The penalty goes up the longer you wait. You may also have to pay a penalty if you have to pay a Part A premium, also called Premium-Part A.
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Medicare Part D Prescription Drug Coverage Eligibility
Like Medicare Advantage and Medicare Supplement, Part D prescription drug coverage is provided by Medicare-approved private insurance companies. These plans accompany Original Medicare. Generally, you cant have a standalone Part D plan if you have a Medicare Advantage plan.
To qualify for a Part D plan, you must meet the following requirements:
- You must have both Part A and B .
- You must live where plans are available.
- You must pay Part A, Part B, and Part D premiums, if applicable.
Do I Automatically Get Medicare When I Turn 65
Some people automatically get Medicare at age 65, but those numbers have declined as the Medicare and Social Security ages have continued to drift apart.
Most people who automatically get Medicare at age 65 do so because they have been receiving Social Security benefits for at least four months before turning 65. Traditionally, Medicare premiums are deducted from your Social Security check. For the longest time, you could retire with full Social Security benefits at 65 and start on Medicare at the same time.
You are still automatically enrolled in Medicare Part A and Part B at 65 if youre drawing Social Security, but not as many people draw Social Security that early these days because of changes to the eligibility age for full Social Security benefits.
In 2000, the Social Security Amendments of 1983 began pushing back the standard age for full Social Security benefits. The progressive changes are nearing their conclusion: Beginning in 2022, the standard age for full benefits will be 67 for anyone born after 1960.
Besides the Medicare eligibility age of 65, what remains unchanged is that you can opt to begin drawing partial Social Security benefits as early as age 62. So, if you opt for accepting partial Social Security benefits before age 65, you are automatically enrolled in Medicare.
A smaller group of people also automatically get Medicare at age 65: people who receive Railroad Board benefits for at least four months before 65.
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Do I Have To Enroll At 65 If I Have Other Health Insurance
If you are covered by another health insurance plan, such as through an employer, you should ask the benefits administrator if you have to sign up for Medicare.
If it’s not required, you don’t need to sign up during your initial enrollment period, and will be granted an eight-month special enrollment period once your coverage or employment ends .
On the other hand, if your employer requires you to enroll at age 65, or you are retired and keep your employer’s health coverage, or you have insurance under COBRA, you do need to enroll in Medicare. You can keep your other insurance, but Medicare becomes your primary health coverage after you apply.
How Soon Can I Take Social Security
When it comes to receiving the maximum Social Security benefit possible, timing is important. Sometimes beneficiaries may receive more by delaying withdrawal, but some older adults may need the funds sooner.
Start by asking yourself some questions:
- Do I want to retire early?
- Do I want to/need to work past age 70?
- What happens to my Medicare if I work past age 65?
The SSA website offers future planning calculators, opens new window to help you estimate things that can affect retirement. These include life expectancy, pension eligibility, spousal benefits and retirement age.2
While you can take benefits as early as age 62, it may not be recommended. Only those on disability, or surviving spouses, can take Social Security earlier than 62.3
Your full retirement age, also known as normal retirement age, determines if you can receive full benefits. While the original full retirement age was 65 for all, heres a snapshot of how the law has changed:
If you take Social Security up to 36 months before your full retirement age, your benefit will be permanently reduced by 5/9 of 1%. If you withdraw more than 36 months early, your benefit is reduced by 5/12 of 1% each month.4
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