Moving to Medicare can be complicated.
But if you’re nearing 65, don’t wait to dive in.
Timely enrollment ensures continuous coverage and helps you sidestep painful penalties.
Is Enrollment Automatic?
If you have claimed Social Security benefits prior to age 65, Medicare enrollment is automatic for both Part A (hospital and skilled care) and Part B (doctor visits and outpatient services).
If you haven’t claimed Social Security benefits prior to age 65, you’ll need to sign up for Medicare.
When Can I Enroll?
In most cases, the first time you can enroll is during the Initial Enrollment Period, which begins three months before you turn 65, includes the month you turn 65, and ends three months after you turn 65.
For instance, if your birthday is in March, your enrollment period would begin December 1 of the year before you turn 65 and end June 30 of the year you turn 65.
For coverage to begin the month you turn 65, you must sign up in the first three months of your Initial Enrollment Period. Waiting until the last four months of your enrollment period can delay coverage.
What Happens if I Enroll Late?
If you miss the Initial Enrollment Period, you can sign up for Medicare during General Enrollment, which is January 1 through March 31 each year.
But coverage won’t begin until July, exposing you to months without coverage.
You will also be subject to a late enrollment penalty. For Medicare Part B, the penalty is 10% for each 12-month period you should have been enrolled.
For example, if you delay enrolling in Part B for three years, you’ll pay your Part B premium plus an extra 30% of that monthly amount.
The part that really stings? This penalty continues for the rest of your life.
What if I Retire Before 65 and/or Have Other Insurance Coverage?
If you have a commercial policy, federal law still requires you to switch over to Medicare at 65, as marketplace coverage is secondary to Medicare.
The same is true if you have other employer-related coverage such as retiree, severance, or COBRA.
If you delay, you must wait until the General Enrollment Period, which exposes you to gaps in coverage and penalties.
What if I’m Still Employed at 65?
If you or your spouse are actively employed at 65, you may delay coverage if you work for a company with more than 20 full-time workers.
If you work for an employer with fewer than 20 full-time employees, you still must sign up for Medicare at age 65.
Medicare has special enrollment periods for people who have health insurance through an employer at age 65. These periods begin the day you leave your job or when you lose access to employer-sponsored health plan coverage and last for eight months.
Note that COBRA is not considered active employer group coverage, which means you won’t be eligible for special enrollment when coverage ends.
The Bottom Line
To avoid penalties and lapses in coverage, be proactive when it comes to Medicare. Sign up as soon as you’re eligible.
For questions about Medicare, contact Vista. We’re happy to help.