Medicare before 65: what to do before your birthday

The milestone birthday of 65 opens up a whole new world of Medicare healthcare for senior citizens. The details of Medicare can be hard to unwrap, like the gift from a friend who always uses too much wrapping tape. Blue Cross and Blue Shield of Kansas want to help you celebrate and not complicate this big birthday and the health benefits that await as you transition to this exciting stage of life. 

What is Medicare? 

Medicare is a federal healthcare plan for people 65 and older or those with disabilities that meet the qualifications. Get started by reviewing our deep dive into the ABCs of Medicare

If it wasn’t for Medicare, health care might become really expensive at age 65 and beyond. 

  • Parts A and B are called “Original Medicare” and are provided by the government. Parts A and B cover some basics – like hospital stays and doctor visits – but they don’t cover everything.
  • Part D of Medicare is prescription drug coverage. 
  • Medicare Advantage, Part C, is an “all in one” alternative to Original Medicare offered through private insurance carriers like Blue Cross and Blue Shield of Kansas. These bundled plans include Part A, Part B and Part D prescription drug coverage with a Preferred Provider Organization (PPO). Plans include supplemental benefits like vision, hearing, dental, and fitness memberships.

Do I have to sign up For Medicare?

The Blue Cross and Blue Shield of Kansas team emphatically want you to realize the repercussions of delaying Medicare. Rejecting Medicare coverage isn’t breaking a law. That doesn’t mean there aren’t risks.

  • Late penalty fees: Each Medicare part comes with a penalty fee that is a lifetime feemeaning by the time you get around to enrolling late, you could pay 10%, 20%, 30%, etc., more each month for the rest of your life.
  • Waiting for enrollment periods: Even if you’re a few days late, the deadline for Medicare enrollment is firm, aside from extenuating circumstances. You could find yourself waiting months to get coverage at a time you desperately need it. 
  • Other risks: As we’ll discuss later on, rejecting certain enrollment can impact your eligibility to receive Social Security benefits.

When to sign up for Medicare before turning 65

While Medicare and retirement considerations generally go hand in hand, your retirement age is much more flexible than your Medicare eligibility and enrollment rules

The Initial Enrollment Period (IEP) of Medicare is only for those signing up for the first time. This period begins three months before you turn 65 and three months after your birthday month. That’s a total of seven months to complete your IEP. 

Confused? Use this handy Q&A tool to find out if you have special circumstances to apply later than the IEP timeframe.

Medicare costs for first-time enrollment

Those eligible for Medicare will get a package of information mailed to their home before their birthday to review the options. Medicare isn’t a cut-and-dry process, so you should know the nuances of each step in the process. 

Medicare Part A: premium-free or premium required

Medicare Part A is available premium-free for most applicants, assuming that person or their spouse has worked at least a decade in a job that required Medicare taxes to be paid. Those eligible for Social Security or Railroad Retirement Board benefits also qualify for free premium Part A.

To find out if you qualify, review your W-2s, log into your Social Security account, or talk with your employer. With a premium-free Part A, it’s wise for all eligible applicants to receive this benefit even in addition to other health coverage through an employer. 

The few who don’t qualify will be able to pay a premium of $278 or $506 based on the length of time, less than 10 years, with an employer who deducted Medicare taxes. 

MEDICARE TERMS: A Premium is the monthly cost you pay for the Medicare Part A, B, or D plan. The Deductible is what you pay out-of-pocket until you reach the limit and then Medicare takes over payment.

Medicare Part B: no premium-free option

Medicare Part B plans come with a premium, but that can change each year depending on the cost of living factors and the recipients’ income. In 2023, the premium for those making $97,000 or less as an individual or $194,000 or less as a couple who files a joint tax return is $164.90. 

You can delay Part B coverage if you are getting private health insurance through your job or your spouse’s job while one of you is still working; you have eight months to enroll after that coverage ends during a Special Enrollment Period (SEP). Please note that COBRA coverage is not considered part of this timeline.

Medicare Part D: prescription drugs

The prescription coverage for Medicare is known as Part D, but it isn’t part of Original Medicare. These are standalone plans but might also be wrapped up in a Medicare Advantage Plan. 

If you are covered for prescriptions under your employer’s health plan, through retiree benefits, or Veterans Affairs, you can delay enrollment in Part D. However, if you don’t have prescription coverage after you become eligible for Medicare, you have 63 days until you’ll face a late enrollment penalty fee AND you’ll need to wait until the next open enrollment. 

Medicare & Social Security: auto enroll or action required?

Those collecting Social Security benefits will avoid the risk of forgetting to enroll but still should be engaged in the process. 

Social Security eligibility starts at age 62 or 24 months after a disability requires a person to use Social Security benefits. Those who are already collecting social security before their 65th birthday will be automatically enrolled in Medicare Part A & Part B

Even if you don’t plan to collect Social Security benefits until you are 67, you can still enroll in Medicare. You will need to enroll on your own in that instance.

WARNING: Social Security recipients should not disenroll from Medicare Part A due to the risk of losing the Social Security benefits AND having to pay back the benefits received thus far. 

Start planning now

Blue Cross and Blue Shield of Kansas realize how overwhelming the Medicare process can be, and that’s why our team of dedicated representatives is ready to walk you through the process. Schedule a time now to talk with us, even if you’re a year or two away from turning 65. 

Leave a Reply