The word “Medicare” has been buzzing around for the last several weeks as we approach the Fall Open Enrollment Period specifically for Medicare. Just like employer and ACA healthcare plans, Medicare plans adhere to a variety of enrollment periods depending on the circumstances. While the Fall Open Enrollment for Medicare is meant for folks already signed up for Medicare, there may be questions surrounding signing up for Medicare in general if you are approaching the eligibility age of 65. Below are explanations for those new to Medicare, those who may wish to make changes to their plan, and those that are eligible but may still have employer coverage. No matter the coverage you currently have now is the time to review your situation and prepare or make changes.
New to Medicare?
As you or a family member approach age 65, it is important to learn the differences in Medicare A, B, and D so that you can make the best choices for you and your family. Reading this webpage or this post about Medicare basics is a great start for your research.
- For most individuals, they can enroll once they turn 65 (outside of this Fall Open Enrollment Period). Every person is eligible for an Initial Enrollment Period (IEP) that runs for seven months (three months prior to their birth month, their birth month, and then three months after their birth month)
- If you are already receiving Social Security benefits, you will be automatically enrolled in Medicare
- If you are not receiving Social Security benefits, you can enroll on your own either through Social Security or by working with a health insurance broker
→ Call Social Security at 1-800-772-1213
→ In person at your local Social Security office
Already have Medicare?
Now is the time to review your current plan, think about any changes you may want to make, and then act accordingly before the deadline of December 7th. If you found gaps in your Medicare plan this year, even though Medicare is a national health insurance program, you can benefit greatly from working with an insurance broker to make sure your coverage is exactly what you need and to make sure any gaps are closed by using a Medicare supplement. Supplemental plans are provided through private insurers that are approved by Medicare and the premiums may vary depending on the plan and provider. Below are a few tips and reminders as you go through the open enrollment period.
- Review current Medicare and Drug coverage: If you are not happy with your coverage for next year, now is the time to make changes
- If you have Original Medicare: You will receive next year’s “Medicare & You” handbook which will outline your costs and benefits for the coming year
- If you have Medicare Advantage Plan or a Part D Plan, you will receive an Annual Notice of Change (ANOC) and/or Evidence of Coverage (EOC) from your plan.
- Even if you are happy with your current coverage, it is wise to look at other options in your area that may better suit your needs for the upcoming year. Part D is particularly important to shop around for each year as coverage and costs change year in and year out
- Any changes you make will go into effect on January 1, 2022.
Working Past 65?
For many, work continues beyond the age of 65, which often begs the question of what to do about your health insurance options. There are choices and flexibility depending on your employer plan. It is important to research the impact on spouses as well if they are covered by your employer plan or if you are covered by theirs.
- If your employer has more than 20 employees, you can choose to delay Medicare enrollment, drop your employer coverage for Medicare, or have both Medicare and employer coverage
- If your employer has less than 20 employees, you will need to enroll in Medicare during your Initial Enrollment Period (IEP)
- If you are covered under your spouse’s employer plan, it will depend on the plan rules. You may be able to delay, or you may have to enroll in Medicare at age 65. In some cases, you may be able to have both Medicare and the employer coverage.
- If you qualify to delay Medicare coverage, you can do so without penalty as long as you enroll within eight months of either losing your employer coverage or ceasing to work, whichever comes first. You will enroll during a Special Enrollment Period and will need to provide proof of creditable drug coverage (see below) to avoid Part D penalties.
- Medicare Part A is usually premium free for most people, so you could opt to enroll in Part A while still working. HOWEVER, if you have a health savings account (HSA), be aware that once you enroll in any part of Medicare, you can no longer make contributions to your HSA account.
- In order to “officially delay” Medicare, you have to make sure you have creditable drug coverage. This means that any employer plan you are still on has drug coverage that is at least as good as the standard Medicare part D plan. If it is not as good, you have to enroll in Part D during the Initial Enrollment Period (IEP) in order to avoid the late penalty.
- You do not need to provide notice that you are delaying enrollment unless you are receiving Social Security or Railroad Retirement Board benefits. If you are receiving either, you will automatically be enrolled in Parts A & B when you turn 65. You will need to let Social Security know you wish to delay Part B. By law, if you are receiving Social Security benefits, you must also have Medicare Part A.
At ML&R Wealth Management, we help our clients navigate all aspects of their financial life, including thinking through health insurance options. Health insurance is a big part of your overall financial picture and we want to make sure our clients are adequately protected. If you need guidance or resources, please do not hesitate to contact us or reach out to a member of our team.