Happy year of your 65th Birthday! You've reached a milestone and are about to enjoy Medicare eligibility. Congratulations! Here are some things you need to know BEFORE signing up for Medicare:
1) Initial Enrollment Period (IEP) - You get a seven-month window to enroll in Medicare, and timing counts. Your enrollment window starts three months before you turn 65, includes the month of your 65th birthday, and continues for three months after you turn 65. If you miss this enrollment period you may experience coverage delays and pay ongoing penalties. We recommend you play it safe and enroll during the three months prior to your 65th birthday. Not only will you avoid delays and penalties, you can also enjoy Medicare coverage as soon as you turn 65.
2) Enrollment options - Some people get Medicare benefits automatically (when they apply for retirement or disability benefits from Social Security) and some people have to sign up for it. If you have to sign up for it, you have three enrollment options:
3) Coverage Options - The building blocks of Medicare are identified as "parts," which are defined below from Medicare.gov.
Part A (Hospital Insurance): Helps cover inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care.
Part B (Medical Insurance): Helps cover:
Services from doctors and other health care providers
Home health care
Durable medical equipment (like wheelchairs, walkers, hospital beds, and other equipment)
Many preventive services (like screenings, shots or vaccines, and yearly “Wellness” visits)
Part C (Medicare Advantage Plan): Medicare Advantage is a Medicare-approved plan from a private company that offers an alternative to Original Medicare for your health and drug coverage. These “bundled” plans include Part A, Part B, and usually Part D. In most cases, you’ll need to use doctors who are in the plan’s network. Plans may have lower out-of-pocket costs than Original Medicare. Plans may offer some extra benefits that Original Medicare doesn’t cover — like vision, hearing, and dental services.
Part D (Drug coverage): Helps cover the cost of prescription drugs (including many recommended shots or vaccines). You join a Medicare drug plan in addition to Original Medicare, or you get it by joining a Medicare Advantage Plan with drug coverage. Plans that offer Medicare drug coverage are run by private insurance companies that follow rules set by Medicare.
Medicare Supplemental Insurance (Medigap): Extra insurance you can buy from a private company that helps pay your share of costs in Original Medicare. Policies are standardized, and in most states named by letters, like Plan G or Plan K. The benefits in each lettered plan are the same, no matter which insurance company sells it.
4) Avoid Penalties - Medicare assesses penalties for both Part B and Part D if you do not sign up for those coverages when you first become eligible.
You'll pay an extra 10% of premium for each year you could have signed up for Part B, but didn’t. (Premium amounts are determined by your income.)
This penalty is added to your monthly Part B premium.
The penalty is not a one-time late fee — you’ll pay the penalty for as long as you have Part B.
Exception: Generally, you won’t have to pay a penalty if you qualify for a Special Enrollment Period. To qualify, you (or your spouse) must still be working and you must be covered by a group health plan based on that job.
You’ll pay an extra 1% for each month you could have signed up for Part D, but didn’t. (That’s up to 12% a year.)
The penalty is added to your monthly premium.
It’s not a one-time late fee — you’ll pay the penalty each month for as long as you have Part D coverage (even if you change plans).
Exception: Generally, If you have creditable drug coverage or if you qualify for Extra Help, you won’t have to pay a penalty. However, you may owe a late enrollment penalty if at any time after your Initial Enrollment Period is over, there's a period of 63 or more days in a row when you don't have Medicare drug coverage or other creditable prescription drug coverage.
5) Free Expert Advice - There is no one-size-fits-all option when signing up for Medicare. Where you live, the doctors you see, your hospital of choice, the medications you take, how much and where you travel...are some of the factors to take into consideration when finding the plan that is right for you. You can do the research and figure it out on your own, but wouldn't it be great to have an expert to talk to?
With Bozer Financial Solutions, our loyalty is to our valued clients. We are appointed by all of the major Medicare providers so we offer you unbiased facts and help you find the plan that is right for you. Best of all, we do this at no cost to you. Schedule a free consultation with our Medicare expert today.