Five Things You Need to Know About Medicare!
TIP NUMBER 1 – When, Where, Why to Sign Up for Medicare Parts “A” & “B”
There are plenty of information resources available for the “turning 65” population. Probably the two best sources of information on Medicare include the www.medicare.gov website and the “Medicare & You” handbook which is mailed to you each year.
MEDICARE.GOV & “MEDICARE & YOU” HANDBOOK
Over the next few weeks, you will find me referencing www.medicare.gov which is the web- based version of the “Medicare & You” handbook and the government’s own Medicare website. This is the best source of information on Medicare because it is ALWAYS the most up to date. It’s live information.
“Medicare & You” is the paper version you will receive each year as a notification as to how Medicare works and it’s changes. It’s roughly 140 pages and I am pretty sure no one ever reads the thing. It’s just too much information. This is partially why I created this program. I know what you need to know and I can teach you what you need to know whenever you give me the ring!
As I discuss each item, I will include www.medicare.gov links to the discussed material below, and page numbers (eg. “PG 122”) on where you can find the information in the “Medicare & You” handbook.
Save these four cards for a special gift when we meet later on. At any point, if you feel like you need help, please feel to call me at 859.654.0120 extension 1000.
WHEN TO ENROLL IN MEDICARE PARTS “A” & “B” – (Pg 21-28)
Most citizens share the same seven (7) month “initial enrollment period” that begins three (3) months prior to their birth month when they turn 65 and lasts through three full months following that same birth month. This is your “Initial Enrollment Period” or “IEP”.
It’s during this period that you have several important decisions to make. Some of these decisions are irreversible so be careful.
- Find out if you will automatically be enrolled in Part “A” and Part “B” by calling 1.800.633.4227 (“1-800-MEDICARE”). Most people are already automatically enrolled in Part “A”. It’s the part of Medicare that you more than likely paid for all your life with your payroll taxes from your job. Remember? So, Part “A” is almost a no-brainer. Most are automatically enrolled (although not all).
- Part “B” however is optional, although very needed. Question; will you continue to work and have coverage at your work? If you are “actively” working and maintain insurance coverage at work, so you can defer your Part “B” until later. WARNING. This can be tricky and a pain in the butt.If you wait until later, you may find yourself having to wait to sign up for Medicare during their “open enrollment” period which runs January 1 – March 31 each year, and which provides only a July 1 effective date for Part “B”. BE CAREFUL if you intend to defer. You may cause yourself penalties if you do not enroll in Part “B” when you become eligible.So, decide if you want Part “A” or “A” & “B”. Again, BE CAREFUL!
- You need to also decide on a Part “D” Drug plan when you become eligible for Part “A” and/or have Part “B”. Again, BE CAREFUL. Not signing up for a Part “D” Drug plan may cause you a late enrollment penalty.
WHERE TO SIGN UP FOR MEDICARE
If you need to manually sign up for Medicare “A” and/or “B” you can do it either by phone calling 1.800.633.4227 (“1-800-MEDICARE), or going to www.medicare.gov or walk in to your local Social Security office.
WHY TO ENROLL IN A TIMELY FASHION
This is probably one of the most important things for you to know. Many beneficiaries later on in life tell me they wish someone had explained what I am about to tell you to them, when they turned 65.
This topic is all about the Late Enrollment Penalties charged Medicare beneficiaries for not signing up for Parts “B” & “D” in a timely fashion.
- Late Enrollment Penalty for Not Enrolling in Part “B” – The moment of eligibility for Part “A” and/or Part “B” begins a clock. If at the end of 63 days from that point, if you are not signed up for Part “B” and you have held no other “Credible Coverage”, you begin running up a late-enrollment penalty that you will pay for the rest of your life. That penalty is calculated as a 10% cost, added to your other Medicare Costs multiplied by each year that you did not have Part “B” and you should have. For instance, if you became eligible for Part “B” and waited for three years to sign up, and had no other “credible coverage” during that time, your late enrollment penalty would be 30% of the cost of Medicare Part “B” (currently $134.90/month) or $40.47 per month, for the rest of your life. Keep in mind that it is up to CMS and Social Security to actually calculate your late enrollment penalty.
- Late Enrollment Penalty for Not Enrolling in Part “D” – The moment of eligibility for Part “A” and/or Part “B” begins a clock here as well.. If at the end of 63 days from that point you became eligible, if you are not signed up for a Part “D” Drug plan and have no other “credible” prescription coverage, you will begin running up a late-enrollment penalty that you will pay for the rest of your life. That penalty is calculated as 1% per month that you should have had a Part “D” plan, multiplied by the average Part “D” plan premium nationally. So, for instance, in 2017, the average drug plan premium was $33.17. So, if you were eligible for for a Part “D” drug plan and failed to sign up for 9 months (after the initital 63 days), then your penalty would be calculated as $33.13 multiplied by 10% or $3.13 per month for the rest of your life.
Now these are just examples. Again, CMS and Social Security work together to calculate these penalties and they can go up every year if the Part “D” and Part “B” plan premiums go up (and they frequently do).
One of the best pieces of advice I can offer you is to tell you to not enroll in Medicare Part “B” or “D” late.
SUMMARY OF TIP 1
Make sure you are enrolled in Medicare Parts “A” and “B” early during your “Initial Enrollment Period”. If you chose not to enroll in part “B”, make sure you have insurance through some credible source, and if that is your work, that you are actively working in that job, not retired. You must be actively working in a job that offers health insurance coverage.
If not, you may be subject later on to a “Late Enrollment Penalty”.
- Getting Started with Medicare
- Getting Medicare if You Have a Disability
- The Part B Late Enrollment Penalty
- The Part D Late Enrollment Penalty
Additional Resources Right Here
Need more help, call me now at 859.654.0120 extension 1000