The federal government defines Medicare as a federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with end-stage renal disease. Medicare is divided into four Parts. The first two parts, A & B, make up what is known as “Original Medicare”.
How & When to Enroll in Medicare – Part A and Part B When You Turn 65
As you near age 65, you have to make several important decisions about your Medicare coverage. This page will help you:
- Learn “What is Medicare”
- Identify your Initial Enrollment Period (IEP)
- Decide whether to enroll in Medicare Part A and Part B when you turn 65
- Find out how to sign up for Medicare Part A and Part B
What is Medicare?
What is Medicare Part A and Part B?
Part A (Hospital Insurance): Helps cover inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care.
Part B (Medical Insurance): Helps cover:
- Services from doctors and other health care providers
- Outpatient care
- Home health care
- Durable medical equipment (like wheelchairs, walkers, hospital beds, and other – equipment)
- Many preventive services (like screenings, shots or vaccines, and yearly “Wellness” visits)
How much will you pay for Medicare Part A and Part B?
Medicare premiums vary depending on how long you (or your spouse) worked, when you first signed up for Medicare, and your current insurance. Most people do NOT pay a monthly premium for Part A if they or their spouse worked and paid Medicare taxes for 10 years.
Everyone pays a monthly premium for Part B. The premium varies depending on your income and when you enroll in Part B. Most people will pay the standard premium amount (the base rate for 2022 is $170.10 per month). Tip: If you are at least 64 years and 9 months old, you can get an estimate of how much you may pay for Part A and Part B by using the Medicare Eligibility and Premium Calculator.
Do I need to sign up for Medicare when I turn 65?
Generally, if you have job-based health insurance through your (or your spouse’s) current job, you don’t have to sign up for Medicare while you (or your spouse) are still working. You can wait to sign up until you (or your spouse) stop working or you lose your health insurance (whichever comes first).
- If you’re self-employed or have health insurance that’s not available to everyone at the company: Ask your insurance provider if your coverage is employer group health plan coverage (as defined by the IRS.) If it’s not, sign up for Medicare when you turn 65 to avoid a monthly Part B late enrollment penalty.
- If the employer has less than 20 employees: You might need to sign up for Medicare when you turn 65 so you don’t have gaps in your job-based health insurance. Check with the employer.
If you have COBRA coverage: Sign up for Medicare when you turn 65 to avoid gaps in coverage and a monthly Part B late enrollment penalty. If you have COBRA before signing up for Medicare, your COBRA will probably end once you sign up.
Determine Your Initial Enrollment Period
The first time you can enroll in Medicare is called your “Initial Enrollment period” generally when you turn 65. It lasts for 7 months, starting 3 months before you turn 65, and ending 3 months after the month you turn 65. Your 7-month Initial Enrollment Period begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.
*NOTE* If you miss your 7-month Initial Enrollment Period, you may have to wait to sign up and pay a monthly late enrollment penalty for as long as you have Part B coverage. The penalty goes up the longer you wait. You may also have to pay a penalty if you have to pay a Part A premium, also called “Premium-Part A.”
| If you sign up: | Coverage starts: |
|---|---|
| Before the month you turn 65 | The month you turn 65 |
| The month you turn 65 | The next month |
| 1 month after you turn 65 | 2 months after you sign up |
| 2 or 3 months after you turn 65 | 3 months after you sign up |
How to Enroll
- If you are receiving Social Security benefits prior to age 65, you will be automatically enrolled in Parts A and B.
- If you want Part A and Part B coverage to start when you turn 65, sign up during the 3 months before you turn 65.
- You will need to submit an application with Social Security to get Part A and Part B. Sign up by:
- Applying with Social Security online at SocialSecurity.gov, visiting your local Social Security office, or calling Social Security at (800) 772-1213. TTY users should call (800) 325-0778.
Do I need to get Medicare drug coverage (Part D)?
You can get Medicare drug coverage once you sign up for either Part A or Part B. You can join a Medicare drug plan or Medicare Advantage Plan with drug coverage anytime while you have job-based health insurance, and up to 2 months after you lose that insurance.
Even if you have a Special Enrollment Period to join a plan after you first get Medicare, you might have to pay the Part D late enrollment penalty. To avoid the Part D late enrollment penalty, don’t go 63 days or more in a row without Medicare drug coverage or other creditable drug coverage. If you have other drug coverage: Ask your drug plan if it’s “creditable drug coverage.”
Each year, your plan must tell you if your non-Medicare drug coverage is creditable coverage. Keep this information — you may need it when you’re ready to join a Medicare drug plan.
| If you: | Do this: |
|---|---|
| Don’t have any drug coverage | Join a Medicare drug plan or Medicare Advantage Plan with drug coverage within 3 months of when your Medicare coverage starts to avoid a monthly Part D late enrollment penalty. |
| Have drug coverage that’s creditable | You can wait to get Medicare drug coverage (Part D). If your drug coverage switches to ‘not creditable,’ you’ll have 2 months to join a Medicare drug plan. You won’t get the Part D late enrollment penalty as long as you don’t go more than 63 days without creditable drug coverage. |
| Have drug coverage that’s not creditable | Join a Medicare drug plan or Medicare Advantage Plan with drug coverage within 3 months of when your Medicare coverage starts to avoid a monthly Part D late enrollment penalty. If your other drug coverage just switched to ‘not creditable,’ you’ll have 2 months to join a Medicare drug plan or Medicare Advantage Plan with drug coverage. You won’t get the Part D late enrollment penalty as long as you don’t go more than 63 days without creditable drug coverage. |
Medicare Supplement (MediGap) vs. Medicare Advantage
Original Medicare (Part A and B) still can leave considerable costs for the insured to pay for when they receive care. Original Medicare generally pays 80% of costs and leaves the insured to pay 20% of billed costs BUT there are deductibles for each episode of care that must be met before coverage will pay. To limit exposure the vast majority of Americans either choose a Medicare Supplement also called a MediGap plan or a Medicare Advantage Plan.
Medicare Supplement Insurance (Medigap)
Medicare Supplement Insurance (Medigap) is extra insurance you can buy from a private company that helps pay your share of costs in Original Medicare. You need both Part A and Part B to buy a Medigap policy. Generally, Medigap policies don’t cover long-term care (like care in a nursing home), vision, dental, hearing aids, private-duty nursing, or prescription drugs. Medigap policies are standardized, and in most states named by letters, like Plan G or Plan K. The benefits in each lettered plan are the same, no matter which insurance company sells it.
One of the main benefits of choosing a Medicare Supplement Policy instead of a Medicare Advantage policy is that you have wide open network access to any provider that accepts original Medicare. You have no restriction on which system or doctor you choose to see as long as they accept $1 from Medicare they have to take payment from a supplement plan as payment in full after any applicable co-pay and deductible has been met.
When you choose a Medicare Supplement plan, you have the freedom to go with any Medicare Part D policy that is available for sale in the zip code of your primary residence. This structure allows for greater freedom for insureds to choose a Part D card that will cover the prescriptions they personally are prescribed at a more competitive cost from year to year than they may have with a Medicare Advantage plan that has its own Part D automatically attached without option for alternatives.
Talk to your Medicare Advisor at The Salvati Insurance Group to discuss your options with the multiple carriers available in your area.
Medicare Advantage (Part C)
Medicare Advantage (MA) Plans are also known as Part C. Medicare Advantage plans are when a private insurer takes the burden of plan administration for Part A, Part B, Part D, and also generally includes dental, vision, and some other fringe benefits. The commercials that run during Medicare season for $0 premiums are the Medicare Advantage plans, but some more benefit rich MA plans will have a monthly co-pay.
When you have a Medicare Advantage there is almost always a co-pay and coinsurance charge when you consume care. Medicare Advantage plans also include Part D coverage, but they do not give choice of Part D plans, they will have a bundled package for that MA plan.
One major difference and drawback of Medicare Advantage plans is that for the most part, they are network based, meaning that they will only cover insureds for care delivered by providers and hospitals that are in-network with that MA plan. If you want to see other providers, generally it would be out of pocket and either not reimbursed or reimbursed at a lower cost than an in-network provider.
All Medicare Advantage plans have additional benefits thrown in that may include, dental, vision, over the counter product reimbursement or ordering tool, appointment transportation, and gym memberships. These benefits are not standardized and vary greatly, but due to competition, most companies have a somewhat similar offering. Talk to your TSIG Medicare advisor to identify which plan may be the best choice for you.