Turning 65 and Medicare can seem daunting. Suddenly, you’re getting hundreds of pieces of mail about Medicare plans, retirement accounts, and maybe even retirement villages! You’re constantly asking people to stop calling you about all the amazing benefits you’re supposed to get, and you’re probably tired. We’re hoping that we can answer most of your questions and give you an idea about your next steps.
While getting older can feel a bit inhibiting, turning 65 is a huge milestone that should be celebrated! The biggest advantage you’ll notice as you age is that you’ll start to reap the benefits of all of the hard work you’ve completed throughout your life. Those Medicare and Social Security taxes that you’ve paid for all these years will finally start to benefit you. You can start withdrawing from your IRA or your 401k. You’ll finally be able to take advantage of all of the “senior discounts” at movie theaters, restaurants, and more. Most importantly though, you’ll be able to take advantage of government programs, like Medicare!
One of the first things you should do as you age is learn about turning 65 and Medicare enrollment. Medicare is a federal health insurance program for seniors and other eligible United States residents. Some people can qualify for Medicare before turning 65 if they are diagnosed with End-Stage Renal Disease, receive Social Security Disability Insurance, or have ALS.
Medicare and Medicaid are often confused, but they are two vastly different programs. Medicare is for all seniors and some disabled people, but Medicaid is for low-income adults and children. While Medicare is purely a federal program, Medicaid is both federally and state-funded. That means that all states are required to cover certain health benefits under Medicaid, but each state also has the ability to add additional benefits and to set their own eligibility requirements.
It’s important to first recognize the difference between the federal Medicare program and privately-owned insurance company Medicare plans. The federal program is what everyone with Medicare has to start with. It includes Part A, which covers hospital-related services, and Part B, which covers doctor’s appointment-related services. Those are the only parts included in the federal program - everything else comes separately.
Once you’re enrolled in Part A and Part B, you can decide whether or not you want to add additional benefits. The most important benefit that most people will need to add is prescription drug coverage. You can get drug coverage in one of two ways: enroll in a “Part C” plan that includes prescription coverage, or enroll in a “Part D” plan.
Parts A through D are the four main parts. The final part is Medigap, or Medicare Supplements. Medigap is different because it does not provide additional health benefits. Instead, it covers financial items such as your Part A and B copayments and deductibles.
The first Medicare enrollment period is called the “Initial Enrollment Period (IEP)” and is specifically for people who are aging into the program. It begins three months before your 65th birthday and ends three months after. During your “IEP,” you can enroll in Original Medicare for the first time and make a selection for your additional benefits (Medicare Advantage, Medicare Supplements, or Part D). If you do not enroll during your IEP, you may face a late enrollment penalty fee. The penalty fee is meant to encourage you to enroll as soon as you are eligible so you can start taking advantage of your benefits. Most people can get premium-free Part A anyway, so there’s no reason NOT to sign up.
You can still make changes to your benefits after your IEP. Most people will have to wait until the fall of each year to do this during the “Annual Enrollment Period (AEP).” AEP runs from October 15 through December 7. During AEP, you can make virtually any change to your Medicare coverage. You can enroll in a new Medicare Advantage plan, a new Part D plan, etc. This is a good time to review your benefits every year and decide whether or not you want to make changes.
Some people are also able to make changes during two other enrollment periods. The Open Enrollment Period (OEP) runs from January 1 through March 31 and is designed for people who enrolled in Medicare Advantage during the Annual Enrollment Period and do not like their plan. You can’t make just any change during OEP; you can only change from one Medicare Advantage plan to another (or drop your current Medicare Advantage plan). Then, there’s the Special Enrollment Period (SEP). SEP is for people who have a special circumstance (like a chronic illness or a major life change, like moving to a new state) and need to make a plan change. Your SEP can occur during any time of year, depending on the circumstances that granted you a SEP.
The Medicare enrollment process will be different depending on what you want to enroll in. If you are enrolling in Medicare for the first time and just need Parts A and B, you can do that through Social Security. If you want a Medicare Advantage or Medicare Supplement plan, the best way to enroll is through an insurance agent.
To enroll in Parts A and B, visit the Social Security website or call Social Security at 1-800-772-1213 (TTY 1-800-325-0778). You can also visit your local Social Security office. Once you’re enrolled, you’ll receive a Medicare card in the mail (it may take a few months).
We advise that anyone turning 65 speak to an insurance agent. Your plan(s) won’t be any more expensive whether you speak to an agent or not, so you have nothing to lose. We do recommend that you work with an agent who can sell a large variety of plans so that there is no bias. Agents who only work with one major carrier are going to push you to purchase that carrier’s plans, but someone (like a Medicare Plan Finder agent) who can sell several different plans can truly help you select the best one.
Yes, you can sign up for Original Medicare (parts A and B) online at SocialSecurity.gov as long as you are at least 64 years and nine months old and you do not already have Medicare coverage. You cannot use the online application if you are currently receiving or want to receive Social Security benefits.
The administration claims that the application takes less than 10 minutes to complete! Unlike applying for Medicaid, you should not need any additional forms or documentation - it can all be done online very quickly. So, don’t wait!
You must contact Social Security either in person or online/by phone to enroll in Part A. However, once you have Medicare Part A, you can download the Medicare enrollment application for Part B (medical insurance). You must already have Part A to complete this form. This form is valid for 2019.
While it is not technically mandatory to sign up for Medicare at age 65, it is advised. If you wait to enroll, you will face a penalty fee of up to 10% of your premium costs. There are penalty fee exceptions for those who are still working.
If you sign up during the three months before your 65th birthday, your Medicare coverage will begin on the first day of your birthday month. However, if your birthday is on the first day of the month, your coverage will begin on the first day of the month before your birthday.
If you’re still working when you turn 65, you may be able to hold off on your Medicare enrollment without facing a late enrollment penalty fee. If your company has less than 20 employees, you need to enroll in Medicare when you turn 65. If you have health insurance through your employer and your company has at least 20 employees, you can wait. If you prefer, you can sign up for Medicare anyway and have both Medicare and your employer plan. Medicare can act as your backup insurance and will provide coverage second to your employer plan. Since most people who have worked through most of their lives will get premium-free Part A, there is no harm in enrolling regardless of your current employment status.
In 2019, the full retirement age is 66. You can still claim your Social Security retirement benefits at age 65, but you’ll lose 6.67%, so it’s best to wait if you can. The longer you wait, the more benefits you can receive (payments can go up by as much as 8% for every year you wait). Additionally, claiming Social Security before you actually quit working can hurt you. If you earn more than $17,640 in 2019, you’ll lose $1 in benefits for every extra $2 you earn.
When you turn 65, single filers can get an extra $1,600 and married filers can get up to $2,600 in tax returns. Additionally, those 65 and older can get a tax credit for the elderly between $3,750 and $7,500 based on income. To qualify for this tax break, your yearly income and benefits (Social Security, pensions, annuities, disability) cannot exceed:
Turning 65 and Medicare are different experiences for everyone. Some people are already retired when turning 65, and others plan on working well into their 70’s! Regardless, 65 is still the average age for most Americans to retire and start looking for benefits. Below is a list of things you should start thinking about now. Consider downloading our checklist of items you should complete before you turn 65 for more information!
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