Signing up for Medicare at 65: What you need to know

Learning about how Medicare is structured will help you make the best decisions for your health care at age 65.

By: Sanford Health News .

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You become eligible for Medicare at age 65 or have a qualifying disability –- an important insurance milestone that can be overwhelming as you try to understand your options. Learning about how Medicare at 65 is structured will help you make the best decisions for your health care.

Signing up for Medicare at 65

Your Initial Enrollment Period begins three months before you turn 65 years old or the 25th month that a person receives disability benefits, and continues for four months afterward. It’s important to sign up for Medicare enrollment as soon as possible, because delayed enrollment can result in penalties. There is a waiting period for coverage, so you could be without any insurance for up to a year if you miss the seven-month initial enrollment period.

The General Enrollment Period usually runs between Jan. 1 and March 31 each year. People who enroll during the General Enrollment Period will not have their Medicare coverage begin until July 1 following the General Enrollment Period, and people who enroll during the General Enrollment Period may face penalties if they became eligible for Medicare coverage a year or more before they enrolled in Medicare. In very rare circumstances, people can qualify for a Special Enrollment Period.

Know the language

Medicare consists of four major programs:

  • Part A: Covers inpatient hospital services, inpatient skilled nursing facility care, inpatient blood services, home health care, and hospice care
  • Part B: Covers outpatient doctors’ services, preventive care, outpatient medical and surgical services/supplies, clinical lab tests, durable medical equipment, and diabetic testing supplies
  • Part C: Permits Medicare beneficiaries to receive their medical care from among a number of delivery options, such as HMOs and PPOs
  • Part D: Private insurance plans covering the costs of outpatient prescription drugs

Original Medicare, Part A and Part B, pays for only part of your medical costs. Part A and Part B cover many health care expenses, but beneficiaries are still responsible for a number of copayments and deductibles, prescription drugs, emergency health coverage abroad and routine dental and vision care. These gaps in coverage leave beneficiaries with additional expenses that can easily add up, which is why many choose to enroll in Medicare Supplement plans.

Medicare Supplement Plans

A Medicare Supplement (or Medigap) is an optional policy that helps pay for out-of-pocket-expenses like co-payments and deductibles for those who enroll is Original Medicare Parts A and B. A Medicare Supplement plan offers additional coverage to individuals enrolled in Original Medicare Parts A and B.

If you don’t purchase a Medicare Supplement when you enroll in Original Medicare Parts A and B, you won’t be guaranteed coverage and may be subject to medical underwriting, through which you could be denied coverage or charged a higher rate for preexisting conditions.

Signing up for Part B

If you are still working and have an employer or union group health insurance plan, it’s possible you do not need to sign up for Medicare Part B right away. You can find out from your employer whether or not your employer’s plan is the primary insurer. If Medicare, rather than your employer’s plan, is the primary insurer, then you will still need to sign up for Part B. Even if you don’t sign up for Part B, you should enroll in Medicare Part A, which may help cover some of the costs not covered by your group health plan.

If you don’t have an employer or union group health insurance plan, you need to sign up for Medicare Part B during your initial enrollment period, unless your health insurance is from an employer where you actively work. (If your employer has less than 20 employees, you will probably need to sign up for Part B.)

Understand open enrollment

Open enrollment is Oct. 15 through Dec. 7 each year. If you choose to switch your coverage during open enrollment, Medicare allows plans to evaluate your health. If you’ve developed an illness, you may be rejected or face a sharp rate increase.

Know the costs

Medicare is not free. You are required to pay annual deductibles and monthly premiums. You should buy the best coverage you can afford when you sign up, considering more than the cost of the premium. The cheapest premium might not provide you with the cheapest overall coverage – you’ll need to factor in co-payments and deductibles too.

Avoid penalties

For every month you delay enrollment past the initial period, your Medicare Part D premium will increase by at least one percent, raising your premiums for Medicare Part B and Part D for the rest of your life. Your monthly premium may go up by 10 to 12 percent for each full 12-month period you aren’t enrolled.

Don’t make the mistake of assuming your health insurance will stay the same when you turn 65. Retiree plans can end, including coverage from some small workplace plans. COBRA, retiree or VA benefits plans do not count as a health insurance plan for Medicare purposes.

You are exempt from delayed enrollment penalties if you have other drug coverage through a retirement plan offered by a private insurer, as long as the coverage is as good as Medicare’s. (If you’re currently receiving Social Security benefits then you are automatically enrolled in Medicare Part A and Part B, effective the month you turn 65.)

This marketing material is intended for informational purposes only as part of a solicitation of insurance campaign. Contact will be made by an insurance agent or insurance company. Neither Sanford Health Plan nor its agents are connected with or endorsed by any governmental entity or Medicare.