Research shows that between 10 and 12 thousand people turn 65 each day, making them eligible for Medicare. While working, you will notice Medicare taxes (for Medicare Part A hospital insurance) are taken out of your paychecks. Once you or your spouse work the required 40 quarters or 10 years, you will not have to pay a premium for Part A.
Once you become eligible, you may get caught up deciding on what plans or options you desire for your Medicare benefits. However, it can be argued that understanding when you can and need to enroll is more important. Failure to apply for and enroll in Medicare on time can result in lifetime penalties and delays in coverage. To help you avoid such outcomes, let’s walk you through a successful Medicare enrollment.
Many Beneficiaries Must Manually Enroll in Medicare
There are two enrollment scenarios for Medicare eligibility at age 65. First, if you are receiving Social Security income prior to age 65, you will be automatically enrolled in Medicare A and B, and three months prior to your 65th birthday, you will be sent your Medicare card. For those not receiving Supplemental Security Income (SSI) benefits, you will have to manually apply for your Medicare benefits and can also begin this process three months prior to your 65th birthday month.
If you meet any of the following criteria, you will be automatically enrolled in Medicare and sent your Medicare card in the postal mail:
- Receive retirement benefits from the Social Security Administration
- Receive retirement benefits from the Railroad Retirement Board
- Receive Social Security Disability Insurance (for at least the past 24 months)
- Have a diagnosis of Amyotrophic Lateral Sclerosis and are receiving disability benefits
- Have a diagnosis of End-Stage Renal Disease and need dialysis or a kidney transplant
If none of these apply to you, you will have to manually apply for your Medicare Parts A and B benefits. Please note, however, that the government will not notify you or send you and correspondences to remind you or help you enroll.
Know When to Enroll in Medicare
For those who are not automatically enrolled, Medicare enrollment happens during specific dates depending on when you become eligible. Most people first become eligible at age 65, which is often the best time to enroll in order to avoid incurring penalties. This timeframe is called the Initial Enrollment Period (IEP) and includes the three months before one’s 65th birthday, the birthday month itself and the three months after one’s 65th birthday.
There’s also a Special Enrollment Period (SEP) for people with specific, qualifying circumstances. Some SEPs are for individuals who didn’t enroll in the program when they were first eligible and others apply to current beneficiaries. A Special Enrollment Period will be granted to an individual that may experience:
- A change in employer coverage
- A loss of creditable drug coverage
- A change in address
- A move into or out of a care facility
If you want to learn more about qualifying for a Special Enrollment Period, read our blog post here. Understanding your Initial Enrollment Period and what you have to do regarding enrollment is vitally important. If you are delaying enrollment because of a perceived Special Enrollment event, investigate during your IEP to avoid any penalty scenarios by failing to enroll if it’s required.
For those who missed their IEP and do not qualify for an SEP, there is a General Enrollment Period (GEP) that occurs annually from January 1 through March 31 for beneficiaries to enroll in Parts A and B (but not Part C and Part D prescription drug coverage). It’s unadvisable to delay enrolling and be forced to enroll during the GEP since this means you missed your initial enrollment deadline and will face potentially lifelong late enrollment penalties. In addition, your Medicare coverage won’t begin until July 1 of the year you apply, which means you will potentially face gaps in coverage and a penalty. Part B penalties accumulate on a 12-month basis, so delaying enrollment will only increase your late enrollment penalty. Applying under the General Enrollment Period will allow you to enroll in Part B and stop the accumulation of the late enrollment penalty.
Know How to Enroll in Medicare
Now that we’ve identified those that need to manually enroll in Medicare and the best time to do so, let’s discuss how to enroll.
Once you reach your Initial Enrollment Period (or another suitable enrollment period), you can apply for Medicare Parts A and B via the Social Security Administration (SSA):
- Over the phone
- In-person at a local SSA office
- Through the mail
With many individuals and/or their spouses opting to delay retirement, it’s possible that you may wish to delay enrollment in Medicare Part B in favor of maintaining creditable coverage through your or your spouse’s employer. If that is the case, depending on your specific situation, it may make sense for you to enroll in Medicare Part A when you first become eligible. Click here to learn how creditable coverage impacts your Medicare enrollment. Also, if you are funding a Health Savings Account (HSA), you do not want to enroll in Medicare as it would negate your deductibility of your HSA contributions and potentially create a tax violation.
After successful enrollment into Medicare Parts A and B, many individuals will seek out additional benefits by enrolling in a Medicare Supplement plan, Medicare Advantage plan, and/or a Part D prescription drug plan. If you receive some form of employer benefits or government benefits (such as Medicaid, VA benefits or Tricare), it is important to find out how your Medicare enrollment impacts these benefits.
If, after you first enroll in Medicare benefits, you determine the plan(s) don’t meet your needs, you can make changes to your Medicare benefits during the Annual Enrollment Period (AEP). The Annual Enrollment Period opens every year on October 15th and runs through December 7th. Any changes during this enrollment period will begin on January 1st of the following year.
As we’ve discussed above, there are specific circumstances when you must manually enroll in Medicare, as well defined timeframes and processes for enrolling. If this overview did not answer all your questions or you need more assistance understanding Medicare eligibility or enrollment, contact a member of the Medicare Portal team today. Our licensed Medicare insurance agents can help you understand Medicare, learn about your Medicare benefits and enroll or change your Medicare plan. Learn more about how we can help you here or contact us to get started with one-on-one assistance.