The Medicare mailings never seem to end, do they?! If you’re approaching your 65th birthday, you’re nearing the age at which you can enroll in Medicare. Insurance companies start circling months before you’re eligible in an effort to entice enrollees into choosing their supplemental health programs. For many, it all boils down to a bunch of confusing mail and alphabet soup. Let us help you cut through the clutter with the following enrollment facts.
- You’re eligible for Parts A and B of Medicare (called Original Medicare) when you’re age 65 or when you qualify on the basis of a disability or other special situation, AND you’re a U.S. citizen or legal resident in the U.S. for five or more consecutive years.
- Once eligibility is met, you have an Initial Enrollment Period, which lasts seven months. It starts three months before your birthday, includes the month of your birthday, and goes three months past your birthday.
- Special Election Periods for enrollment exist for Medicare-eligible individuals with specific situations, including loss of employer coverage, leaving a plan’s service area, gaining assistance from the state, or a diagnoses of certain disabilities or chronic health conditions.
- If you have group coverage through an employer, you are not required to enroll until you either retire or lose your health coverage.
- For those already enrolled in Medicare, the period during which you can change your plan occurs annually between October 15 and December 7. This period is called Open Enrollment.
Additional confusion surrounds the options for filling in the holes in Medicare coverage by purchasing additional coverage. Here are the facts.
- Medicare Part A is designed to cover hospital stays, after a deductible.
- Medicare Part B covers doctor and outpatient visits.
- Medicare Parts A and B are not designed to cover every health need. Enrollees are encouraged to carefully evaluate their health care needs and select a plan that provides the appropriate level of coverage if needed.
Did you know that there’s a cost associated with Original Medicare? The premium is connected to Part B coverage. Check out the chart below from www.Medicare.gov. Perhaps you’re tempted to skip Part B coverage? It’s rarely a good idea. There are penalties and they get expensive fast!
| If your yearly income in 2013 (for what you pay in 2015) was: | You pay (in 2015) | ||
| File individual tax return | File joint tax return | File married & separate tax return | |
| $85,000 or less | $170,000 or less | $85,000 or less | $104.90 |
| above $85,000 up to $107,000 | above $170,000 up to $214,000 | Not applicable | $146.90 |
| above $107,000 up to $160,000 | above $214,000 up to $320,000 | Not applicable | $209.80 |
| above $160,000 up to $214,000 | above $320,000 up to $428,000 | above $85,000 and up to $129,000 | $272.70 |
| above $214,000 | above $428,000 | above $129,000 | $335.70 |
We can’t stress enough the importance of considering health care costs as part of your retirement planning process. Enrollees who elect to include supplemental coverage as part of their medical coverage may face thousands of dollars in premiums each year. It adds up quickly and could make a difference in how soon retirement becomes affordable. If you’re nearing Medicare eligibility, we strongly encourage you to start researching your options and speak with more than one Medicare specialist. We’re happy to provide referrals to experts who can help you make sense of the system.