Turning 65 is a great milestone for AICPA Members. It’s a time for celebrating your life’s accomplishments and anticipating the years to come. It’s also the time to make some important decisions about your future health care coverage.
Medicare is government issued health insurance for people aged 65 and older, but it doesn’t cover all medical and prescription drug costs. You may have already started receiving mail about Medicare Supplemental insurance (also called Medigap) plan options. Making sense of all this information can be overwhelming and confusing to say the least. So where do you begin?
Here are some steps you can take to help you get started with Medicare.
Mark your calendar for your Medicare enrollment period – You are first eligible to enroll in Medicare during your “Initial Enrollment Period” which is a seven-month timeframe including the three months prior, the month of your 65th birthday, and the three months following your birthday month. Keep in mind there are risks to signing up later, like a gap in your coverage or having to pay a monthly late enrollment penalty for as long as you have Part B1.
Tip: If at age 65 you are still covered under a creditable group health insurance plan, usually through your own or your spouse’s employer, you may qualify for a Special Enrollment Period (SEP) for enrolling in Medicare Parts A, B, C *and D without penalty.
Sign up for Original Medicare which includes Part A and Part B - When you’re eligible, you can enroll online or in-person at the Social Security office. If you are already receiving a Social Security benefit at age 65, the government will automatically enroll you in Medicare Parts A and B. If not automatically enrolled in Medicare Parts A and B, you must self-enroll.
Here’s how Original Medicare breaks down.
Medicare Part A is hospital insurance. It helps cover inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care.
Medicare Part B is medical insurance. It covers certain doctors’ services, outpatient care, medical supplies, and preventive services.
It’s not mandatory to sign up for Medicare Part B. But, if you don’t enroll in Part B when you're first eligible (or not covered by a creditable group health insurance plan). You’ll pay an extra 10% for each year you could have signed up for Part B, but didn’t. According to Medicare.gov, you'll have to pay this lifetime penalty each time you pay your premiums, for as long as you have Part B. The penalty will continue to increase the longer you go without Part B coverage
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Tip: Still covered under you or your spouse’s creditable group health care plan at age 65? Most people qualify to get Part A (hospital insurance) without paying a monthly premium. You can choose to sign up for just Part A when you turn 65 and still have creditable group health insurance. Effectively, you will have more comprehensive coverage for hospital expenses. If you enroll in Medicare Part A and/or Part B, you and your spouses employer should stop contributing to your HSA at least 6 months before you apply for Medicare
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Enroll in Medicare Supplement Insurance (optional)
You must be enrolled in Medicare Part A and Part B to purchase a Medicare Supplement Insurance Plan. Medicare is designed to cover only 80% of your medical costs. The remaining 20% is your financial responsibility. Medicare Supplement Insurance plans can help meet that 20%.
Your Initial Enrollment Period is the designated window of time to first enroll in Medicare Supplement Insurance. Plan options are standardized to make it easy to compare plans. Choose the plan option that best meets your needs for price, deductibles, copayments, and coinsurance. The plan option that you select is guaranteed issue during your initial enrollment period; you cannot be rejected for health reasons. Once enrolled, you will pay a private insurance company a monthly premium in addition to the monthly Part B premium that you pay to Medicare.
Tip: A Medicare Supplement Insurance Policy only covers one person. If you and your spouse both want Medicare Supplement Insurance coverage, you'll each have to enroll in separate policies.
Be informed
Visit
https://www.medicare.gov to learn more about Medicare, supplemental coverage options, and find additional resources.
*Medicare Part C not available in Alaska
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https://www.medicare.gov/basics/get-started-with-medicare/sign-up/when-does-medicare-coverage-start
2
https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-late-enrollment-penalty
EB3 2262929 S 11/23