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En español l If you're just becoming eligible for Medicare, the open enrollment period at the end of the year (Oct. 15 to Dec. 7) is not for you. That time frame specifically allows people who are already in Medicare the option to change their coverage for the following year if they want to. As a Medicare newbie, you get an enrollment period of your very own.
With that awesome milestone coming up fast — the one with 65 written all over it — you may be panicking about what to do about Medicare. Should you enroll? What happens if you don't? What if you already have health insurance? What if you intend to keep on working? Whom should you be contacting? And when?
Getting it right is crucial in avoiding mistakes that could cost you a lot of money and hassle in the future. There's no single way for everybody. The when, what, where, who and why of Medicare depend on your own circumstances. So click on the links below to discover some surprising facts about Medicare enrollment that might have escaped you until now:
- What "qualifying for Medicare" really means
- Why you shouldn't wait for open enrollment or your full retirement age — or for the government to tell you it's time to sign up
- When you should sign up for Medicare — at the right time for you
- Why your spouse's Medicare won't provide family coverage for you
- What happens if you miss your enrollment deadline
- Where to go to sign up for Medicare
- Why you may need to sidestep online enrollment
- What to do about signing up for Medicare if you live abroad
- Who can help if you think you can't afford to enroll in Medicare
If you're approaching age 65, you may think that you don't qualify for Medicare because you haven't paid enough Medicare taxes while working. That is not true. But believing it's true might make you delay Medicare enrollment past your personal deadline — a mistake that could cost you dearly in the future.
Those payroll taxes that were deducted from your paycheck while you worked mean only that after turning 65 you can get Part A benefits without paying monthly premiums for them — provided that you've contributed enough to earn 40 credits (or "quarters"), which is equivalent to about 10 years of work. (Part A covers stays in the hospital and skilled nursing facilities, some home health services and hospice care.) If you don't know how many credits you have, call Social Security at 800-772-1213.
But you don't need any credits to qualify for the other parts of Medicare: Part B (doctors' services, outpatient care and medical equipment) and Part D (prescription drug coverage). As long as you're 65 or over and an American citizen or a legal resident who's lived in the United States for at least five years, you can get these benefits just by paying the required monthly premiums, same as anybody else.
What if you haven't contributed enough in payroll taxes to get Part A benefits without having to pay premiums? You may qualify on the work record of your spouse or, in some circumstances, a divorced or dead spouse. Otherwise, you can choose to buy Part A by paying a monthly premium. In 2020, this amounts to $458 a month if you have fewer than 30 work credits, or $252 a month for 30 to 39 credits.
Even if you're not eligible for premium-free Part A, you should still sign up for Part B (and Part D if you need drug coverage) at the right time for you. Otherwise, your coverage will be delayed and you'd most likely have to pay late penalties for all future years.
Note that you may qualify for Medicare younger than 65 if you have disabilities and meet certain conditions.
2. Why you shouldn't wait for open enrollment or your full retirement age — or for the government to tell you it's time to sign up
If you're just becoming eligible for Medicare, the open enrollment period at the end of the year (Oct. 15 to Dec. 7) is not for you. That time frame specifically allows people who are already in Medicare the option to change their coverage for the following year if they want to. As a Medicare newbie, you get an enrollment period of your very own, as explained in the section headed "When you should sign up for Medicare — at the right time for you."
Similarly, you shouldn't wait until you reach your full retirement age (currently 66) before enrolling in Medicare — unless you continue to have health coverage after age 65 from your own or your spouse's current employment.
And you shouldn't hang around waiting for the government to send a letter telling you that it's time to sign up for Medicare. It won't happen — unless you already receive Social Security benefits, in which case you'll be signed up automatically just before your 65th birthday.
In all these situations, postponing Medicare enrollment could bring serious consequences (delayed coverage and late penalties), as explained in the section headed "What happens if you miss your enrollment deadline.”
Knowing when to enroll is critical, because there's no single "right" time. It depends entirely on your situation:
- Initial enrollment period (IEP) at 65: This is the right time for you if you won't have health coverage from active employment (either your own or your spouse's) after you turn 65 — even if you get retiree benefits or COBRA coverage. The IEP lasts for seven months, with the fourth month usually being the one in which you turn 65. (For example, if your 65th birthday is in June, your IEP begins March 1 and ends Sept. 30.) However, if your 65th birthday falls on the first day of the month, your whole IEP moves forward. (In this case, if your birthday is June 1, your IEP begins Feb. 1 and ends Aug. 31.)
- Initial enrollment period under age 65: If you qualify for Medicare through disability, the fourth month of your IEP is usually the one in which you receive your 25th disability payment. Social Security will let you know when your Medicare coverage starts. You get a second seven-month IEP when you turn 65 and become eligible for Medicare based on age instead of disability — but your coverage continues automatically, without your having to reapply.
- Special enrollment period (SEP): This is for you if you delayed Medicare enrollment after 65 because you had health insurance from an employer for whom you or your spouse was still actively working. The SEP allows you to sign up for Medicare without risking late penalties at any time before this employment ends and for up to eight months afterward. (However, a small employer with fewer than 20 workers can legally require you to sign up for Medicare at age 65 as a condition for continuing to cover you under the employer health plan — in which case, Medicare becomes your primary insurance and the employer plan is secondary. But this decision is up to the employer, so you need to check it out before you turn 65.)
Note that if you are still working and have insurance from your employer in the form of a health savings account, under IRS rules you cannot contribute to your HSA if you are enrolled in any part of Medicare. In this situation you need to postpone signing up for Part A and Part B until you retire and also postpone applying for Social Security (because you can't opt out of Part A if you're receiving those benefits). You won't be penalized for this delay.
In the past, you may have had health insurance that included your spouse and children in one benefit package. But there's no family coverage in Medicare. Each person must separately meet the conditions for eligibility:
- You must be 65 or older, or qualify at an earlier age because of disability; and
- You must be an American citizen, or a legal immigrant (green card holder) who has been living in the United States for at least five years, or a green card holder who has been married for at least one year to a U.S. citizen or legal immigrant who qualifies for full Medicare benefits.
If you lose employer health coverage when your older spouse retires and goes onto Medicare, you need to find coverage for yourself — through benefits from your own employment, from COBRA coverage (which may extend your spouse's employer insurance for a limited period), or from insurance you buy yourself, such as plans purchased through Obamacare.
5. What happens if you miss your enrollment deadline
Enrolling in Medicare is voluntary, but if you don't sign up during the appropriate enrollment period (whichever one applies to you) and then decide at some later date that you want Medicare after all, you face two serious consequences:
- You can sign up only during a general enrollment period (GEP) that runs from Jan. 1 to March 31 each year, and your coverage will not begin until July 1 of that year; and
- You will pay late penalties amounting to an extra 10 percent for each full 12-month period that had elapsed between the end of your IEP and the GEP in which you finally signed up — minus any time in which you had insurance from active employment (your own or your spouse's). Part B penalties must be paid for as long as you remain in Medicare. If you get penalties for late Part A sign-up (which is possible only if you have to pay premiums for Part A), you'll pay them for twice the number of years that you'd delayed enrollment.
Note that if you're hit with a late penalty while under 65 when you get Medicare because of disability, the penalty will be waived as soon as you reach 65 and become entitled to Medicare on the basis of age. Also, if your state pays your Medicare premiums because your income is low, any late penalties are waived.
6. Where to go to sign up for Medicare
To enroll in Medicare (the health program), you just call Medicare (the federal agency), right? Wrong! For historical reasons, the Social Security Administration handles Medicare enrollment — as well as related issues such as eligibility and late penalties. The Medicare agency deals mainly with coverage and payment issues.
If you're already receiving Social Security retirement or disability benefits when you become eligible for Medicare, SSA will automatically sign you up for Medicare Parts A and B, and you'll receive your ID card through the mail. Otherwise, you must apply. Call Social Security at 800-772-1213 or go to the Social Security website.
Note that if you're not already receiving Social Security benefits at age 65, you will not be notified when it's time for you to enroll in Medicare. And if you let your enrollment deadline trickle past and then get hit with late penalties, you can't appeal on the basis that you "didn't know." Ignorance of the law is not considered a defense.
7. Why you may need to sidestep online enrollment
Signing up for Medicare online — and you can sign up for Medicare on the Social Security website — may be convenient, but it doesn't work effectively in all circumstances. These are situations in which you need to produce documents as evidence of eligibility. For example:
- You are using your spouse's work record to qualify for premium-free Part A benefits: You need to show proof of your marriage, your spouse's birth date and (if appropriate) the date of divorce or your spouse's death.
- You are not an American citizen: You need to show proof of legal residency (green card) and of having lived in the United States for at least five years.
- You delayed Part B enrollment because after turning 65 you had health insurance from an employer for whom you or your spouse actively worked: You need to show proof of this insurance.
In these circumstances, even if the online enrollment allows you to sign up, you will still be required to send documents to Social Security through the mail or (if you don't want to entrust them to the mail) take them to a Social Security office. In the case of documents that are not easily replaced (such as green cards), you must take them to the local office.
8. What to do about signing up for Medicare if you live abroad
Turning 65 when living overseas can be tricky. On the one hand, you can sign up for Part B and pay monthly premiums, even though you can't use Medicare services outside the United States, and Medicare can't reimburse you for any medical services you do receive. On the other hand, if you wait to sign up until you return to the United States, you risk being hit with permanent late penalties and delayed coverage.
There's one exception to this draconian rule. You can delay Part B enrollment without risking late penalties if you're working abroad and have health coverage provided by your employer or by the national health system of the country you live in. This is also true if you're self-employed or if it's your spouse who is the working partner. To avoid late penalties, you must sign up for Medicare within eight months of the employment ending, whether or not you've returned to the United States by that time.
If you're abroad and want to sign up for Medicare, you can do so by contacting the American embassy or consulate in your host country. For contact information, go to the international operations page on Social Security's website.
9. Who can help if you think you can't afford to enroll in Medicare
Medicare is not free. Most people are required to pay premiums, deductibles and copayments for coverage. But if your income and savings are limited, you may qualify for programs that can eliminate or reduce those costs:
- Medicaid: This is the safety-net health program for people with very limited incomes. It is run by the states, and eligibility rules vary from state to state. If you qualify for both Medicare and Medicaid, your out-of-pocket health care costs should be very low.
- Medicare Savings Programs: If you qualify for one of the Medicare Savings programs, your state pays your Part B premiums (and maybe Part A premiums as well if you need to pay these) and, in some circumstances, your deductibles and copays.
- Extra Help: The Extra Help federal program provides low-cost Part D prescription drug coverage to people whose incomes and savings are under a certain level. If you qualify for full Extra Help, you don't pay premiums or deductibles and your copays are very low. Partial assistance under Extra Help still reduces the costs of drug coverage.
To find out if you qualify for any of these programs, and for help in navigating Medicare's options, contact your State Health Insurance Assistance Program (SHIP), which provides personal help from trained counselors on all Medicare and Medicaid issues, free of charge. You can use the locoator tool at the SHIP website to find contact information for each state's program (some go by different names).
Patricia Barry is the author of Medicare For Dummies, 3rd edition (Wiley/AARP, October 2017).
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