Often, when discussing Social Security with our clients, the conversation naturally segues to Medicare. Medicare is a federal health insurance program for people aged 65 or older (although you may be able to get Medicare earlier if you have a disability or certain diseases). Like Social Security, the Medicare program is quite complex. Enrollment periods, late-enrollment penalties, and coverage options are just a few of the major points of the program requiring consideration before your 65th birthday.
Enrollment Periods
Your initial enrollment period (IEP) in Medicare revolves around your 65th birthday. The IEP lasts seven months, with the window being both three months before and after your birthday month. For example, if your birthday is June 15, you’ll have from March 1 until Sept. 30 to enroll. For the most part, if you don’t enroll during your IEP, you must wait until the general annual enrollment period of Jan. 1 - March 31. Except for certain circumstances, if you fail to enroll during your IEP, your applicable Medicare premiums will likely be higher. There are instances where you can delay enrolling without a late penalty, for example, if you (or your spouse) are still working and have health insurance through an employer. However, employer-sponsored insurance programs sometimes require you to enroll in Medicare Parts A and B for primary coverage, so it is essential to understand your specific plan’s requirements. Once your employer-sponsored insurance ends, you have eight months to enroll in Medicare without being subject to applicable late-enrollment penalties.
Next month, we will discuss some of the more common Medicare coverage options (Medicare Parts A-D). Working with a financial planner experienced in Medicare before your enrollment period can help make the process much less confusing.
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