Medicare is health insurance for people 65 or older. You are first eligible to sign up for Medicare 3 months before you turn 65. Below are some frequently asked questions we receive about Medicare.
When do I 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. If you miss this period, you can sign up between January 1st and March 31st each year. This is called the General Enrollment Period and you might pay a monthly late enrollment penalty, if you do not qualify for the Special Enrollment Period. The most common scenario that requires Special Enrollment involves you or your spouse working past 65 and the employer provides health coverage. You have 8 months to sign up after you or your spouse stop working or lose your group health plan coverage.
What do I sign up for?
There are multiple parts to Medicare:
Part A – helps cover hospitalizations.
Part B – helps cover doctors’ visits, medical equipment (walkers, wheelchairs, and other equipment), and many preventative services (screenings, shots or vaccines, etc.)
Part D – helps cover the cost of prescription drugs.
Parts A and B pay for about 80% of healthcare costs. Then you have the option of signing up for a Medicare Advantage Plan (also known as Part C) or a Medicare Supplemental Insurance Plan (Medigap) to help cover the other 20% of costs. We encourage folks to explore the different plan options under Medicare Supplemental Insurance as these plans generally provide better benefits than Medicare Advantage, but it does come at a cost.
How do I sign up?
You can go to ssa.gov and select Medicare. Or you can contact Diane Kurek from our team. She is our health insurance expert and can be reached at diane@harfordfinancialgroup.com or 410-838-2992.
What if I am still working at 65?
If you are still working at 65, it is prudent to review all of your options. Do a cost-benefit analysis of your employer plan compared to Medicare. If your employer plan offers a Health Savings Account (HSA) and you contribute to it, do not sign up for Medicare Part A while you are working. You are not allowed to contribute to an HSA once signed up for Medicare.
To summarize, it is important to sign up for Medicare during the Initial Enrollment Period in order to avoid paying a late enrollment penalty each month for life. There are special situations when you can sign up outside of Initial Enrollment without paying the late penalty. Parts A and B help cover 80% of healthcare costs while a Supplement or Medicare Advantage are available to help cover the other 20% of costs.