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Posted on: August 16, 2018

Understanding the MEDICARE Maze

Medicare MAZE

Back when 30 seemed old, you may not have believed this day would come – the day you become eligible for Medicare. Turning 65 is a big life event, and thousands of baby boomers are doing it every day. Here’s what you need to know right off the bat, you:

  • Must be 65 to enroll in Medicare – your spouse’s age doesn’t count.
  • May enroll in Medicare even if not collecting Social Security yet.
  • May enroll in Medicare even if working past age 65 and have employer coverage, or you are 65 and have coverage through your spouse’s employer.

When to Enroll in Medicare?

Your first chance to sign up for Medicare is called your Initial Enrollment Period (IEP). It happens around your 65th birthday and lasts a total of 7 months. It includes your birthday month plus the 3 months before and the 3 months after. It’s best to sign up early to avoid gaps in coverage and late enrollment penalties.

Medicare enrollment happens automatically for some people. Others need to enroll themselves when they first become eligible. It all depends on your situation.

You may be enrolled in Medicare automatically if you currently receive Social Security or Railroad Retirement Board benefits. You’ll receive a Medicare card in the mail a few months before your 65th birthday and still have an IEP to make Medicare coverage decisions.

Medicare Maze Options 1 and 2

Why would you need more than Original Medicare?

Original Medicare (Part A and Part B) doesn't pay 100% of your health care costs, and some services aren't covered. You have additional Medicare coverage options when you are enrolled in both Part A and Part B. These include Medicare and Medicare-related plans offered through private insurance companies.   Video:

If you have both Part A and Part B, you may choose to do one of the following:

There are no right or wrong choices here. Make decisions based on health care needs and budget. Your choices don’t have to be forever. You can change your Medicare coverage choices each year during Medicare Open Enrollment – October 15, 2018 to December 7, 2018 – or during a Special Enrollment Period, if you qualify.

Medicare Prescription Drug Plan late-enrollment penalty

If you don’t enroll in a Medicare Prescription Drug Plan (Medicare Part D or a Medicare Advantage plan that includes prescription drug coverage, called a Medicare Advantage Prescription Drug plan) during the Initial Enrollment Period (IEP) for Part D, you may have to pay a late-enrollment penalty to enroll in a Part D plan later. You won’t have to pay this penalty if you:

  • Enroll in the prescription drug plan when first eligible, during the IEP for Part D.
  • Make sure to have creditable coverage with your insurance plan. Every year the plan must say your prescription drug coverage is creditable. If a person goes 63 or more days in a row without creditable coverage, they could pay a late-enrollment penalty.
  • Qualify for Medicare Extra Help.
  • Never enroll in a Medicare Prescription Drug Plan or a Medicare Advantage Prescription Drug plan.

The late-enrollment penalty for Medicare Prescription Drug Plans depends on how long you go without creditable coverage. The late-enrollment penalty is calculated by multiplying 1% of the “national base beneficiary premium” by the number of months you were eligible, but did not apply, for a Medicare Prescription Drug Plan. This amount is rounded to the nearest 10 cents and added to your monthly prescription drug plan premium. The national base beneficiary premium may change each year, so the late-enrollment penalty may also change each year. Beneficiaries may have to pay the late-enrollment penalty the whole time they’re enrolled in a Medicare Prescription Drug Plan.

If all this is as clear as mud, watch this short video again, “How to Understand Medicare Plans.”

Also visit for more details.

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