Every day, 10,000 Americans turn 65. If you are reaching that birthday soon, you need to think about signing up for Medicare. If you don’t sign up when you are first eligible, you could face a penalty.
There are a number of questions you need to ask before signing up:
▪ Do you want to start getting Medicare on your birthday or do you want to delay and stay with your group health insurance?
▪ Will you incur a lifetime penalty if you delay?
▪ Do you want traditional Medicare (Parts A and B) or an Advantage plan that offers some coverage for vision and dental but may have higher co-pays when you’re sick?
▪ Do you need to sign up for Part D, the Medicare drug plan?
▪ Can you get Medicare if you’re an immigrant?
If you are already getting Social Security when you turn 65, you will be automatically enrolled in Medicare Parts A (hospitalization) and B (medical).
However, if you wait until your birthday to sign up, your Part B coverage will be delayed, which means you could have a gap in coverage between the time your private health insurance ends and Medicare begins.
There are only certain times you can enroll in Medicare. Signing up late could mean paying penalties every month. For instance, anyone who qualifies for Medicare can sign up during the General Enrollment Period, which runs from Jan. 1 to March 31, but their Medicare benefits won’t start until July 1.
If you are still working when you turn 65 and have health insurance, you may want to delay getting Medicare.
”A lot of people who are working are covering a younger spouse,” said Kathy Sarmiento, the manager of SHINE, Serving Health Insurance Needs of Elders, a federally funded program in which volunteers help seniors navigate Medicare. “They have to compare what they are paying [for private health insurance] versus going on Medicare and buying insurance for their spouse. They may choose to stay on their group plan to keep their spouse covered.”
“A lot of people are working for the insurance,” added Sarmiento, whose program works with residents of Miami-Dade and Monroe counties.
An individual earning less than $85,000 a year would pay $135.50 a month for Part B in 2019. As a person’s income goes up, so does the monthly premium. In 2019, the highest monthly premium for Part B was $460.50 for an individual whose income was $500,000 or higher, based on the adjusted gross income filed in your 2017 tax return. (To see the sliding scale of Part B premiums, go to https://www.medicare.gov/your-medicare-costs/part-b-costs)
If you have worked 40 quarters and paid Social Security and Medicare, you qualify for free Part A, which is hospitalization.
Edith Gooden-Thompson, volunteer-area coordinator for SHINE for Broward County, says working 65-year-olds may “find their employer’s plan may offer more generous drug co-pays and some additional services” that Medicare doesn’t offer. “There’s no one-size-fits all.”
The federal Medicare website, www.medicare.gov, recommends that everyone enroll in Part A, the hospital insurance, when they’re first eligible. It is free to those who qualify.
If you are working and want to keep your group health insurance, check with your human resources department to see if you have “credible coverage” as defined by the IRS. Generally, if your company has more than 20 employees, the plan will qualify as group health plan coverage. If your company has fewer than 20 employees, you need to sign up for Part A and Part B as soon as you are eligible.
“If you don’t do it, there’s a penalty for not enrolling in Part B,” Sarmiento said. You’ll pay a 10 percent higher premium for every 12-month period that you were eligible for Part B but did not sign up.
“If you have credible insurance from your employer, you can wait until later because you have a Special Enrollment Period. If you know you’re retiring in the next few months, tell Social Security to sign you up for Part B,” Sarmiento said.
When your employment is ending, you have eight months to sign up for Part B without a late-enrollment penalty. However, you do not want to have a gap in coverage between your group health policy and Medicare.
Angela Bitzenhofer and her husband encountered that gap and are stuck with the late sign-up penalty for life. He took a layoff and agreed to 10 months’ severance pay and their same Blue Cross Blue Shield insurance through COBRA.
The insurance plan and the payments were the same and “nobody told us that COBRA was not real insurance,” Bitzenhofer said by phone from Alabama, where she is helping her sister. When their COBRA was nearing an end, they went to the Social Security office to sign up for Medicare and were told they had to wait for the General Enrollment Period that would begin Jan. 1 and then coverage wouldn’t start until the next July 1.
They had to buy health insurance to cover the seven- to eight-month gap before getting Medicare. In addition, they now pay a monthly penalty.
“It’s not hundreds of dollars, but it’s a penalty I’ll be paying for the rest of my life and so will my husband,” Bitzenhofer said. She also pays a small penalty for not enrolling in time for Part D, the prescription drug coverage. Her husband gets his medicine through the Veterans Administration and opted not to buy Part D.
What about Part D? Do you need it?
“I liken it to car insurance or homeowners’ insurance,” Gooden-Thompson said. You can opt to take Part D when you sign up for Parts A and B. If you choose not to take it and later enroll, you’ll pay a penalty of 1 percent of the national Part D premium per month times the number of months you didn’t have coverage.
In 2019, the national base premium for Part D is $33.19, Sarmiento said.
For those who take no prescriptions, Gooden-Thompson suggested buying the least expensive plan. In both Broward and Miami-Dade, that plan is WellCare Value Script at $13.40 a month. Prices could change for 2020.
To sign up for Part D, you have to call 1-800-MEDICARE. To sign up for Parts A and B, go to ssa.gov.
If you’re not a citizen, you can still sign up for Medicare Parts A and B if you have been in the country for five continuous years as a legal resident.
“We have many South Floridians who are immigrants,” Sarmiento said. They would pay $437 a month for Part A and $135.50 for Part B, she said.
The final decision when to sign up is whether to enroll in traditional Medicare (Parts A, B and D) or to join a Medicare Advantage Plan that is often less expensive but the doctors and hospitals are all within a network. It often includes a drug plan as well. If you choose an Advantage Plan, you can switch out of it any time during the first year without a penalty. Anyone can switch programs during the Annual Enrollment Period, Oct. 15-Dec. 7.
One of the things SHINE does is help seniors compare the two types of plans and see what is best for them.
“Our snowbirds tend to want original Medicare so they don’t have to change plans every time they leave the area,” Gooden-Thompson said. Most of the Advantage plans are based on a particular locale, she said.