How Do I Sign Up with Medicare? Tips for Navigating Medicare in Retirement

Medicare is a national health insurance program that serves people aged 65 or older and younger people living with certain disabilities or illnesses. It is a complex program, so many questions concerning it arise in retirement. This article addresses the most common questions about Medicare.

In this article, you will learn:

• What Medicare is and whether it's mandatory
• The difference between Medicare and Medicaid
• The different parts of Medicare
• Eligibility for Medicare and plans that lower Medicare costs
• How to apply and leave Medicare plans

WHAT IS MEDICARE?

Medicare is a national health insurance program in the United States that provides healthcare coverage to people who are 65 years or older, as well as to some younger people with disabilities or end-stage renal disease. Medicare is administered by the Centers for Medicare and Medicaid Services (CMS), a federal agency within the Department of Health and Human Services.

Overall, Medicare is designed to provide healthcare coverage to seniors and certain disabled individuals in the United States. It helps to cover the cost of medically necessary services, such as doctor visits, hospital stays, and certain medical equipment. However, it does not cover all healthcare expenses, and some services, such as long-term care, are not covered at all.

IS MEDICARE MANDATORY?

No, it isn't. It's up to you whether to enroll. But if you don't enroll during your initial enrollment period, then decide to enroll later, you could face late enrollment penalties unless a special situation applies to you.

WHAT IS A MEDICARE LATE ENROLLMENT PENALTY?

A late enrollment penalty is a fee added to your monthly premiums as a punishment for not signing up for Medicare during your initial enrollment period or special enrollment period. 

Your initial enrollment period starts from the three months before your 65th birthday month, through your birthday month, and ends after the three months following your birthday month. 

Sometimes people are eligible for special enrollment periods where they won’t get penalized for not signing up at 65. One of the most common special enrollment periods is for people who work past 65 and have credible insurance coverage through their or their spouse’s employer. After you no longer have credible employer-based insurance, you have 8 months to enroll in Part A &B and 2 months to choose to enroll in Part C & D.

The longer you wait to sign up for Medicare the higher the fee charged. The penalty could last a few years or a lifetime depending on which part of Medicare you didn't sign up for when you were supposed to, as explained below:

• If you are one of those who have to pay for Part A, but didn't sign up during your initial or special enrollment period, the penalty lasts for twice the time you didn't sign up. So, if you missed two years, you will be penalized for four years.
• If you didn't enroll in Part B when you were supposed to, the penalty lasts for as long as you have Medicare. 
• The Part D late enrollment penalty will last as long as you have Medicare as well.

WHAT IS THE DIFFERENCE BETWEEN MEDICARE AND MEDICAID?

Medicare and Medicaid are two insurance programs that assist different populations get easy access to quality healthcare. While the two programs have the same motive, they are different in terms of who runs them and who they benefit.  

Medicare is a federal health insurance program run by the Centers for Medicare & Medicaid Services that serves seniors past retirement age and certain sick or disabled younger people. Medicaid is an assistance program run by state and local governments and serves low-income individuals of all ages.

WHAT ARE THE DIFFERENT PARTS OF MEDICARE?

Medicare has four parts: Part A, B, C, and D. Part A and Part B are known as original Medicare.

• Part A (hospital insurance): Helps pay for inpatient care in a hospital, some hospice and home health care, and limited stays at a skilled nursing facility. If you or a spouse have worked for at least ten years while paying Medicare taxes, you qualify for a premium-free Medicare Part A. You will have to pay a monthly premium if you don't qualify.
• Part B (medical insurance): Helps pay for outpatient costs, such as outpatient therapy and doctor visits. It pays for supplies and medical services not covered by hospital insurance, such as surgical dressings, neck and back braces, and one pair of eyeglasses after cataract surgery. There is a premium for Part B.
• Part C (Medicare Advantage): You can only join Part C if you have Parts A and B. It is offered by private companies through Medicare and covers all the services and supplies not covered by A and B, such as dental coverage and prescription medication. There is a cost for Part C and it varies by plan.
• Part D (prescription drug coverage): Offered by Medicare through private insurance companies. It helps pay for prescribed medications. There is a premium for Part D.

There is also a Medigap plan, also referred to as Medicare supplement insurance. It is a private insurance plan offered through Medicare that helps you pay for expenses not covered by Parts A to D, such as deductibles, co-payments, and healthcare for those who travel outside the United States.

Nevertheless, Medigap policies do not cover long-term care, eyeglasses, vision care, dental care, hearing aids, and private-duty nursing. Moreover, most Medigap plans do not cover prescription drugs.

AM I ELIGIBLE FOR MEDICARE?

If you are a U.S. citizen or legal resident who has lived in the country for five years in a row, you are eligible for Original Medicare once you turn 65. If you haven't reached 65, you qualify for Medicare if you have a qualifying disability or End-Stage Renal Disease.

WILL I AUTOMATICALLY BE ENROLLED IN MEDICARE WHEN I TURN 65?

If you have been receiving Social Security benefits for 4 or more months before you turn 65, you will be automatically enrolled in Medicare Part A and Part B.   You will receive a “Welcome to Medicare” package about 3 months before your 65th birthday. There is no automatic enrollment for Part D. If you want Part D, or if you would rather have a Medicare Advantage plan, then you will have to apply during your initial enrollment period.

If you are not receiving Social Security benefits when you turn 65, you are not automatically enrolled in Parts A and B and must apply.

HOW DO I APPLY FOR MEDICARE?

If you are eligible for Medicare and aren't receiving Social Security benefits when you turn 65, you must apply. Here are some of the ways you can apply for Medicare:

• Online at Social Security, which is the easiest and fastest way
• Calling 1-800-772-1213 
• Contacting or visiting your local Social Security Office
• Calling the Railroad Retirement Board (1-877-772-5772) if you or your spouse worked for a railroad.

WHEN CAN I APPLY FOR MEDICARE?

You can only apply for Medicare or change your plan in designated enrollment periods. 

Your initial enrollment period is when you turn 65. This enrollment period lasts seven months: the three months before your 65th birthday month, your birthday month, and the three months following. This is when you first enroll in Medicare.

Every year there is another enrollment period called, “open enrollment.” This runs from October 15th to December 7th. There are many things you can do during this period:

• Switch from Medicare Advantage to Original Medicare and vice versa
• Change from one Medicare Advantage plan to another
• Enroll in or quit Part D (Prescription plan)
• Switch to a different Part D plan

There is another annual Medicare enrollment period called general enrollment. It lasts from January 1st to March 31st and changes made become effective July 1st. This enrollment period allows people to enroll in Medicare Part A and/or Part B if they failed to enroll during their initial or special enrollment periods or if they ended coverage for some reason. People needing to enroll during this enrollment period often receive penalties. 

AM I ELIGIBLE FOR PROGRAMS THAT LOWER MEDICARE COSTS?

Several programs help low-income individuals pay for Medicare costs, such as copays and premiums. Some of them are state-specific, and others are federal. Their eligibility requirements and application procedures vary by state and program, so you must investigate each to determine whether you're eligible.

CAN I APPLY FOR MEDICARE IF I DIDN'T WHEN I REACHED 65?

Yes, you can. If you missed the initial enrollment period for Part A, you must wait for the General Enrollment Period or Special Enrollment Period if you qualify. You may be required to pay late enrollment penalties.

If you delayed applying for Part B because you were creditably covered in a group health insurance through your or your spouse's employer, you qualify for the Special Enrollment Period. If you apply within this period, you don't have to pay the late enrollment penalty.

If you weren't creditably covered when you became eligible, you don't qualify for the Special Enrollment Period, and you will be required to pay a premium surcharge.

HOW CAN I LEAVE A MEDICARE HEALTH PLAN?

There are three ways to disenroll from a Medicare health plan:

• Call the plan you want to disenroll from and ask for a disenrollment form
• Call Medicare at 1-800-633-4227 and request a disenrollment that is processed over the phone
• Visit your local Social Security Office or call the Social Security Administration to file your request

If you request date 10, your disenrollment goes into effect from the following month. If you don't, your disenrollment goes into effect the second month after making the request.

You need not file a disenrollment form if you are joining another plan. You are automatically disenrolled from the old plan as soon as your new plan becomes effective.

CONCLUSION

Understanding how Medicare works is crucial in retirement planning. It protects you from the high costs of health care services, helps you avoid any penalties, and ensures you stick to your financial plan, which is critical in retirement as you no longer have your main source of income. It plays a huge role in ensuring you reach your financial goals in retirement.

 But that's only a piece of the puzzle—there is much more you need to learn and plan for as you approach or leave retirement age. It also helps to have financial advisors who specialize in retirement planning at your corner.

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