Wondering when to sign up for Medicare Part B? It can be tricky.
In the United States, an astonishing 10,000 people enroll into Medicare each day. With a massive number like that, surely there must be a streamlined enrollment process, right? Not quite.
Remember those “Choose Your Own Adventure” storybooks where the reader would decide the fate of the story? Enrolling into Medicare is like the grown-up version of that series with a twist: if you don’t like the outcome, there is no option to flip back and choose a different ending.
Enrollment into Medicare is voluntary, but if you choose to do it at the wrong time – you may not like the outcome. This is why it’s important to sign up for Medicare Part B on time.
Will Medicare Mail Me an Enrollment Letter?
We talk to people often that are worried because they never received a letter from the government tipping them off to sign up for Medicare.
I hate to be the bearer of bad news, but there is no such letter.
Many people know there are penalties for not signing up for Medicare, but for many reasons, they do not know when they need to sign up.
Medicare gives five scenarios to help people understand whether they will be automatically enrolled in Medicare or if they need to take the task upon themselves:
- Scenario: You will be receiving Social Security or Railroad Retirement Board benefits at least 4 months before your 65th birthday. In this case, you should be automatically enrolled into Medicare Part A and Part B beginning the first day of the month you turn 65.
- Scenario: You won’t be receiving Social Security or Railroad Retirement Board benefits at least 4 months before your 65th birthday. In this case, you will need to enroll in Medicare Part A and Part B on your own.
- Scenario: You are under 65 and receiving (or going to receive) disability benefits. In this case, you will be automatically enrolled in both Medicare Part A and Part B and will receive your Medicare card one month before your Medicare benefits start. Most people qualify after 24 months on Social Security disability income benefits.
- Scenario: You have ALS (Lou Gehrig’s disease). In this case, you will be automatically enrolled in both Medicare Part A and Part B and will receive your Medicare card one month before your benefits start.
- Scenario: You Have End-Stage Renal Disease. In this case, you can enroll in Part A and Part B, but you will need to do so on your own. The benefits will not be automatic.
Once you determine which category you fall under, you are on the right track to avoiding lifetime late penalties (more about those later).
Should I get Medicare Part A and Part B When I Turn 65?
Most Americans who qualify for premium-free Part A have no reason not to go ahead and enroll in it at 65. If you are 65 and will still have employer coverage, Medicare Part A will coordinate with your current benefits.
The only reason not to get Part A at 65 is if you plan to continue contributing to an HSA account. In this scenario, you cannot be enrolled in any part of Medicare.
Moral of the story with Part A is that if you qualify for premium-free coverage, you might as well take advantage of it.
Medicare Part B coverage is not so cut and dry. For starters, Part B is not premium-free. Most people will pay a monthly premium based on their income. The only exception is for people with very low incomes who qualify for Medicaid. These folks may have their Part B premiums paid for by Medicaid.
Since there are premiums for Part B, it is only natural to second guess whether you should enroll in it at age 65 or not.
Unless you are going to have creditable employer coverage yourself or through your spouse – you will want to sign up for Part B at the same time as Part A to avoid the penalties we are going to discuss next.
Consequences of Signing Up for Part B at the Wrong Time
Waiting to sign up for Part B can be accompanied by some serious, life-long consequences. For some, signing up is a no-brainer (or even happens automatically) while for others, their situations can complicate the decision.
The New York Times recently featured the story of a senior who was a prime example of one of those complicated situations. The gentleman in the story, George Zeppenfeldt-Cestero, was a working professional who paid for a great private insurance plan through Aetna.
He went on paying his premiums and enjoying his private coverage 3 years beyond his 65th birthday. It was not until Aetna notified him of the discontinuation of the private plan that he realized he should have been on Medicare for the last 3 years. George will now pay penalties for life.
Medicare never notified him, and the insurance company never notified him. It was solely his responsibility to enroll in Medicare at the right time.
This story resonates with many people because it is an easy mistake to make and thousands of people make the same mistake every year.
Two Major Penalties
If you enroll in Medicare late without creditable coverage, there are two major consequences you can expect:
- You will only be able to enroll for your coverage in Medicare’s general enrollment period (GEP) which is a yearly window of time from January 1st through March 31st. Even if you sign up in this time, your coverage will not begin until July of that year, so there can be significant delays that leave you uncovered in the interim.
- You will incur a life-long penalty (or for as long as you have Medicare) of an additional 10 percent tacked on to your monthly premium for every year that you did not have creditable coverage but were eligible for Medicare.
Unfortunately, whether you have a good reason for signing up late or not – there is usually no remedy to these penalties. Unless you have proof of creditable coverage, you can expect to bear the responsibility of these penalties.
The stakes are high when it comes to choosing your Medicare coverage and this is exactly why there is no substitute for having a Boomer Benefits Medicare Expert on your side through the process.
Know Your Medicare Enrollment Periods
Every year, over 750,000 beneficiaries pay the late enrollment penalties listed in the previous section. Your Medicare enrollment period is one of those “Choose Your Own Adventure” options where you want to choose the right one.
Initial Enrollment Period (IEP)
The Initial Enrollment Period is arguably the most important enrollment periods for you to know and understand. Your IEP is a seven-month window of time and is the best time to sign up for Medicare.
It begins three months before the month of your 65th birthday and continues for three months after. It is during this time that you can enroll in Part A and Part B and a Part D drug plan or a Medicare Advantage Plan.
Special Enrollment Period (SEP)
The Special Enrollment Period is an eight-month window of time that begins when you or your spouse quit working or the month your employer coverage ends, whichever comes first. You should enroll in Medicare Parts A and/or B within that 8-month window to avoid penalties.
General Enrollment Period (GEP)
If you miss your IEP and you don’t qualify for any of the other enrollment periods, you will be able to sign up for Medicare benefits in the general enrollment period between January 1st and March 31st of each year. Remember, this is the one that gets you into Medicare but does not save you from those troublesome penalties.
It is also important to remember that even if you have great employer coverage and plan to continue working beyond 65, there must be 20 or more employees at your company for Medicare to consider this creditable coverage.
Get a Medicare Expert on Your Side
Every time we speak to a client that is going to get hit with life-long penalties, it stings just as much as the last. Our mission over the last 14 years has been to reach seniors far and wide to let them know we can be their advocate in avoiding situations just like these.
The best thing about using our service is that it truly comes at no cost to you. You will get our exceptional 5-star service from the enrollment process through the life of the policy.
With our team’s guidance from the beginning of your eligibility with Medicare, you can rest assured that you will never see those late enrollment penalties.
In the end, even if you have creditable coverage, the best time to enroll in Medicare is in your Initial Enrollment Period. If you do choose to delay your Medicare enrollment due to creditable coverage, we encourage you to get in touch with our team to form a relationship you can rely on when it comes time to sort out your Special Enrollment Period.