Turning 65? Retiring? Sign Up for Medicare…or Not
Our certified agents at THE INSURANCE SUPERSTORE are here to help make your transition to Medicare smooth and easy.
FLORIDA / COLORADO SPRINGS / MISSOURI / NEBRASKA - Brad Keating (719) 244-2857
CASTLE ROCK / DENVER METRO AREA/FRONT RANGE– Joey Torregrossa (303) 814-1113
MISSOURI – Pall Hansen (417) 838-6550
COLORADO SPRINGS / NEW MEXICO – Mario Nevarez (719) 375-0685
The popular perception is that your 65th birthday marks the milestone in your life when you hang up your spurs, kick back, and reap the fruits of your labor as you enjoy sunsets from your porch.
For some, that perception is becoming a thing of the past.
Many of the 10,000 baby boomers who turn 65 every day and reach Medicare eligibility are choosing to work past the traditional retirement age. Some do it for financial reasons and others continue to work simply because they enjoy it.
Choosing to work beyond 65 for financial reasons could cost you in the form of Medicare premium penalties if you miss certain Medicare enrollment dates.
Here are some important points to keep in mind if you’re planning to continue working past your 65th birthday.
Here’s what you need to know:
You still have a Medicare Initial Enrollment Period (IEP) when you turn 65. You may want to enroll in Part A during this time. It’s premium free, as long as you or your spouse worked and paid Medicare taxes for at least 10 years.
You have to be proactive and enroll in Medicare yourself. Medicare doesn’t notify you about your IEP unless you currently get Social Security or Railroad Retirement Board benefits.
You may qualify for a Medicare Special Enrollment Period (SEP) that allows you to delay enrolling in Part B and Part D without incurring late enrollment penalties. You need to get confirmation of creditable coverage from your employer
Why You Should Consider Signing Up For Medicare at 65
If you’re approaching age 65, you will soon have your Medicare Initial Enrollment Period (IEP)when you need to make some decisions about signing up for Medicare. This 7-month window generally includes the month of your 65th birthday, the 3 months before and the 3 months after.
For example, if your 65th birthday is on June 20, then your IEP starts on March 1 and ends on September 30.
Your IEP is the time to learn about your Medicare coverage options, figure out what coverage you want and enroll. If you’re still working, it’s a good idea to check with your employer plan benefits administrator to see how Medicare might work with that coverage before making any final decisions. Call one of the experienced and certified agents at The Insurance Superstore to guide you in your Medicare decision.
If you don’t have health insurance through your employer or another source, you may want to enroll in both Medicare Part A (hospital insurance) and Medicare Part B (medical insurance) to get the full Medicare benefit.
Even if you have employer or other health coverage, you may want to sign up for just Part A when you turn 65 since most people can get it without paying a monthly premium.
How Social Security Benefits Can Affect Medicare Enrollment
If you are receiving Social Security benefits when you turn 65, you’ll be automatically enrolled in Medicare Parts A and B, even if you’re working. The two parts together make up what’s called Original Medicare. Your Medicare card will arrive in the mail about 3 months before your 65th birthday.
Once you’re enrolled in Medicare, a monthly Part B premium will be automatically deducted from your Social Security check. If you don’t want Medicare Part B, you need to notify Medicare to opt out. There will be instructions for doing this on the back of your Medicare card.
Many people wait to claim Social Security until they are 66 or older to increase their monthly benefits. If you fall into this group and still want your Medicare coverage to begin when you turn 65, you’ll need to enroll yourself because it won’t happen automatically.
Watch Out For Penalties When Delaying Medicare Enrollment
You could pay a late enrollment penalty if you delay enrollment in Medicare Part B. In most cases, the penalty payment sticks with you for as long as you have the coverage. The penalty is 10 percent of the Part B premium amount for each full 12-month period you delay enrollment past your eligibility month. For example, a person who delays Part B enrollment for 24 months could pay a 20 percent premium penalty. At 36 months, the penalty would go up to 30 percent.
If you delay Part B enrollment because you have employer health insurance, you may qualify for a Medicare Special Enrollment Period (SEP). During your SEP you may enroll in Medicare Part B without penalty. Your SEP lasts 8 months after the month you retire or after your employer health coverage ends.
Delaying Medicare Part D prescription drug coverage is another consideration. Your employer plan must provide drug coverage at least as good as Part D; otherwise you may have to pay a premium penalty if you don’t sign up when you’re first eligible. Ask your employer plan benefits administrator for proof of creditable drug coverage. This will protect you from penalty if you decide to get Part D coverage when you retire.
Act quickly if you want a Medicare Advantage or Part D plan when you retire
Medicare Advantage plans often bundle in Part D prescription drug coverage, which is not covered by Original Medicare. You may buy a separate standalone Part D plan to add drug coverage if you opt for Original Medicare.
You have a 2-month SEP to sign up for a Medicare Advantage or a Part D plan after you retire or lose your employer health coverage. This is shorter than the 8-month SEP you have to enroll in Parts A and B. You must be enrolled in Medicare Part A and/or Medicare Part B in order to qualify for Part D coverage.
Keep in mind that it can take some time for plans to process your application. Make your decisions and enroll early to avoid a lapse in coverage.
Just because you delay your retirement beyond the age of 65, it doesn’t necessarily mean you should also delay making Medicare decisions and dealing with Medicare enrollment.
Late-enrollment penalties for Medicare Part B and Medicare Part D are permanent and can have a meaningful impact on your finances throughout your retirement. So it’s important to know when your enrollment periods are and to take action.