Originally Published July 15, 2015
This column has written about Medicare fairly
regularly, however, eligibility for Medicare has usually been focused on
those who get it after collecting Social Security Disability benefits
for 24 months.
Perhaps it would be appropriate
now, with improved treatments and a cure for HCV, to look at the
process of enrolling in Medicare when turning age 65. Unlike those on
SSD who are enrolled automatically in Parts A & B of Medicare,
people turning age 65 must actively choose whether or not to enroll in
Medicare in addition to deciding which parts are appropriate for them.
This is especially important because if
you don’t enroll in Medicare at the appropriate times penalty
surcharges can be added to the premiums and they will last as long as
you are on Medicare.
For people who are already on
Medicare due to disability, you are entitled to the same enrollment
opportunities at age 65 as those just joining Medicare. It is your
chance to make changes.
Here is a summary of the various parts and choices of Medicare:
Part A Hospital – This
covers hospital-related charges as well as Skilled Nursing Facilities
and hospice care. Most people have paid sufficiently through MedFICA
payroll taxes so there is no charge for Part A. For those that have
not, there is a premium charge based on how many “work credits” you
accumulated while working.
Part B Medical –
This covers other Medical charges, such as doctors, lab tests, X-rays
and other tests, durable medical equipment, and some injection
medications. The premium in 2015 is $104.90 per month, although high
income persons pay a higher premium.
Part C Medicare Advantage –
These are Managed Care Plans from insurance companies, HMOs, PPOs,
etc. Persons who are enrolled in Parts A and B of Medicare can “trade”
that coverage for one of these plans. Most of them also cover
prescription medications, and many do not charge a separate premium
over the Part B premium; which must still be paid.
Part D Prescription Drug Coverage –
coverage for prescription drugs is offered by private insurance
companies, although all plans must meet the federal law’s requirements
for such plans. Premiums vary by plan. To find the best Part D plan for
you, go to www.medicare.gov
; click on Find Health and Drug Plans.
You can enter your medications to find the plan that covers them for the least out-of-pocket expense to you.
Medicare Supplement (Medigap) Plans –
These plans are offered by private insurance companies and are
designed to accompany Parts A and B and cover portions of medical
charges not covered by Parts A and B. There are ten different levels of
coverage, and premiums vary by plan and insurance company. Since these
plans are private insurance plans, if you do not enroll during the
Initial Enrollment Period, you will be required to go through medical
underwriting to purchase a plan later.
Initial Enrollment Period. If
you are newly eligible for Medicare because of turning age 65, you can
enroll in Medicare Parts A, B, and D or a Medicare Advantage Plan
(Part C) during the initial 7 month enrollment period. The Initial
Enrollment Period begins three months before the month you turn 65,
includes the month you turn 65, and ends three months after the month
you turn 65. The coverage will be effective on either the first of the
month you turn 65 or the first of the month following your enrollment,
whichever comes later.
You can enroll in Medicare on line at www.ssa.gov
by phone at 800-772-1213, or at your local Social Security office.
During this period you also may enroll in a Medigap policy regardless
of your medical history or condition; you will need to do that directly
with the insurance company or through an insurance agent.
Late Enrollment. If you do not enroll in Medicare during this Initial Enrollment Period, and you do not qualify for a Special Enrollment Period, described below, then you must wait to enroll in Medicare during the annual General Enrollment Period.
Late Enrollment Penalty. If
you do not enroll in Medicare during the Initial Enrollment Period and
you do not later qualify for a Special Enrollment Period, the premiums
you pay will have a penalty surcharge. The surcharge varies slightly
by which part of Medicare is late in being enrolled; however, it is
about 10 – 12% additional for each year you could have enrolled in
Medicare but chose not to. This surcharge will be added to the regular
premium during the entire time you remain on Medicare.
General Enrollment Period. General enrollment is from January 1 through March 31 of each year, with coverage effective the following July 1.
Choices When Enrolling in Medicare.
Enrolling in Medicare requires making choices. Before enrolling in a
plan you should do some research to make sure you are getting into a
plan that meets your needs.
First you will need to enroll in both Part A (hospital) and Part B (Medical); see Special Enrollment Period below for exceptions.
Your primary choices for coverage are:
Remain with Parts A & B,
and add a stand-alone Prescription Drug Plan, Part D. You may also
want to add a Medicare Supplement Plan (Medigap) to cover deductibles
and co-insurance that Part A and B do not pay.
Trade your Parts A & B
coverage for a Medicare Advantage (Part C) PPO or HMO. You will still
have to continue paying the Part B premium. Most Medicare Advantage
Plans include Part D Prescription Drug coverage in their plan. For
those that do not, you will need to purchase a stand-alone Drug plan to
go with it. If you consider this option, make sure the medical
providers you wish to continue seeing are contracting or preferred
providers with the plan you choose.
As you might imagine, to find
the right combination of coverage for you, you will need to do some
research and perhaps speak with an insurance agent that specializes in
health coverage for people age 65 or over.
Special Enrollment Periods
Not everyone who turns 65 needs or wants to switch
their health insurance to Medicare. For those with a valid reason for
not joining Medicare at age 65, provisions are made to allow enrollment
at a later date without being subject to Late Enrollment Penalties.
Many people who already have
health insurance when reaching age 65 want to continue their coverage.
That is not always a good idea:
If you have individual health insurance,
and it is not from the Affordable Care Act, you may keep it, but
chances are you will have better coverage for a lower premium if you
enroll in Medicare A, B and D plus purchase one of the broad Medigap
If you have individual health insurance that is from the Affordable Care Act, the same would apply as the premium subsidies are no longer available after age 65.
If you have insurance through an employer due to current employment by you or your spouse, you
may wish to postpone signing up for Medicare. You can sign up for
Medicare anytime while covered. Also, when your employer-based coverage
stops, you have an 8-month Special Enrollment Period to sign up for
COBRA Continuation Coverage is NOT considered to be from active
employment so the 8-month enrollment period begins when your “active
employment” coverage stops.
To enroll in a Part D
Prescription Drug Plan during this period you will need to provide a
letter from your employer’s health insurance carrier, called a
“Certificate of Creditable Coverage” that states the drug coverage they
offered was as good or better than Medicare Part D coverage. Most
group plans meet this requirement.
If you are covered under TRICARE
(coverage for active-duty military or retirees and their families),
you will be required to enroll in Medicare Part B once you retire.
There are other times when you may take advantage of a Special Enrollment Period:
These are the major periods when
you can enroll in the parts of Medicare, but not all of them. If you
are approaching age 65, you should get more detailed information by
downloading the Tip Sheet, “Understanding Medicare Enrollment Periods”
You move to an area that is not in your Medicare Advantage Plan’s service area;
You move to an area that is
still in your Medicare Advantage Plan’s service area but which now has
options available in your new location; and,
You move back to the United States after living outside the country.
Labels: Age 65, Disability & Benefits, Jacques Chambers, medicare