Medicare Coverage Age: 10 Things to Know BEFORE You Turn 65

The Medicare Coverage Age is set at 65 years of age. On your 65th birthday, you become eligible for enrollment and coverage under the Medicare Part A & B Health care system administered by the United States government. You may have already heard the stories and salty language of peers who have gone through the Medicare enrollment process already. The initial enrollment process and policy fine-tuning is not for the faint of heart. There are a number of fairly weighty decisions to be made that will have a significant effect on your life at a later date. The good news is, you don’t have to make these big decisions alone.

Senior Solutions Group has created this site to provide an easy-to-use resource that you can access freely to expand your knowledge about the healthcare and retirement products available for you. We are always available by phone or email to help you locate the specific resources you need and to help guide you through the more complex areas of the enrollment process. Best of all, we won’t charge you a cent for our assistance.

10 Medicare Coverage Facts You Need to Know Before You Turn 65

Enrolling in Medicare for the first time can feel a tad overwhelming. There are many policies and services to select from, and it is important that you select the package that best suits your current and future needs.

1. Medicare Coverage Age & Initial Enrollment Period (IEP)

Most Americans become eligible for Medicare benefits on their 65th birthday. It is important to note that the Medicare coverage age and the Full Retirement age are no longer aligned.

The Medicare Coverage age is 65 years old. However, the initial enrollment period for Medicare coverage begins in the applicant’s 64th year. Initial enrollment begins 3 months prior to the applicant’s 65th birthday and ends 4 months after the applicant’s birthday for a total of 7 months. Enrollment within this 7-month Initial Enrollment Period is ideal and will provide the easiest enrollment process.

2. Retirement Timeline

Individuals may begin collecting monthly social security benefits at 62 years old, or they may wait until their 70th birthday to begin collecting benefits. There are pros and cons to both early and delayed retirement schemes, as discussed briefly below.

Early Retirement:

At this stage, you will need to determine your own personal timeframe for retirement. You may collect social security benefits as young as 62 years old. However, you will receive a reduced benefit amount each month. For example, if you were born after 1960 and your full retirement benefit would have been $1,000 each month, choosing to retire early, at 62 years old rather than at 66 years old, your monthly benefit would be reduced to $700 monthly.

Delayed Retirement:

If you are in good health and would like to continue working, you have the option of delaying retirement. You can delay retirement until you reach your 70th birthday. Delayed Retirement Credits may be offered as an incentive to delay retirement.

3. Automatic Enrollment

When Medicare was introduced in 1965, the Medicare coverage age, was aligned with the full retirement age. When American workers reached 65 years old and began to collect social security benefits, they were automatically enrolled in Medicare at the same time.

Today the process is a bit more complicated. The Medicare coverage age remains set at 65 years old. However, the full retirement age when retirees may begin to collect social security has risen to 66 years old and is scheduled to rise to 67 years old in the coming years.

With the two milestones occurring at separate times, the onus is shifted to the beneficiary to ensure they are enrolled in Medicare at age 65.

4. Special Enrollment Periods

If you have already missed your initial enrollment period, You may still be able to avoid penalties and coverage gaps if any of the following special circumstances apply to your specific situation.

  • You are fully insured through your employer
  • You were given incorrect or inaccurate information by a Federal employee causing you to miss the deadline
  • Certain extenuating circumstances like a sudden unexpected move, a death or illness in the family, or a political shift in the White House caused

5. Premium Penalties

The penalty for failing to enroll in Medicare Part B during the Initial Enrollment Period is significant. Medicare Part B premiums increase by 10% every year that enrollment is delayed past the age of 65 years old. The penalties are permanent, which means delaying enrollment may come with a very steep price tag.

Medicare Part D coverage is optional. However, if you opt-in after the initial enrollment period has ended, you will be assessed a 1% penalty for each month during which you were not covered. Like the Medicare Part B penalty, this is a lifetime penalty that will be added to every premium payment.

6. Medicare Advantage Plans (Part C)

Medicare Advantage plans or Medicare Part C are private insurance policies that are not administered by the Federal government as Medicare Part A and B are. These plans are regulated by the government, keeping the cost for various coverages at a rate that is competitive with the Medicare Part A & B plans provided by the government.

Medicare Advantage plans will often include a more comprehensive level of coverage than the basic Medicare Part A & B plans. Advantage plans often feature Dental Plans, and Vision care plans packaged in the Advantage Part C plan. These all-inclusive plans may offer significant savings over the cost of adding supplemental policies à la carte to the basic Medicare Part A & B plans. Medicare Advantage (Part C) are likely to contain the same level of coverage without requiring any additional supplemental plans.

7. Supplement Plans

There are 10 different supplemental plans available through private insurers with each supplemental policy covering a different specific area of medicine or health care that is not covered under Medicare Part A & B. The following requirements must be met to qualify for enrollment under any of the supplemental policies.

Minimum Requirements

  • You must be subsequently enrolled in a Medicare Part A & B plan
  • Must have full-time residency in the state where the policy is purchased
  • Premiums must be paid directly to the private insurer administering the policy

Popular Supplemental Plans

  • Medigap supplemental plans were created to fill in the gaps in coverage missed by Medicare Part A & B
  • Travel Insurance or International supplemental plans provide healthcare coverage while you are out of the country.
  • Long-Term Care supplemental plans can help pay for assisted living and hospice care in the future

8. Prescription Drug Plan (Part D)

Medicare Parts A & B do not cover prescription drug charges. Most Medicare Advantage (Part C) plans do cover the cost of medications; however, you will want to confirm that the coverage included in your Part C plan will be sufficient for your needs.

If you are opting to enroll in Medicare Parts A & B, you will need to add a separate Prescription Drug or Part D policy to cover the cost of prescription medications.

9. Health Savings Account (HSA)

If you have a high-deductible Health Savings Account (HSA) option which you or your employer contributes to regularly on your behalf, you will need to stop the contributions once you enroll in Medicare Part A & B. On the first day that you are eligible for coverage and enrolled in a Medicare Part A & B plan you will no longer be able to contribute to a Health Savings Account.

If you have the means, it is a good idea to redirect the money you were contributing to a Health Savings Account into another investment savings product
As an added bonus, investors who are at least 50 years old are legally able to contribute an extra $1,000 to their IRAs each year. If you have a 401k, you may contribute up to an additional $6,000 annually.

10. Finalize & Secure Your Healthcare Choices With a Legal Will or Power of Attorney

Finally, you have made it through the gauntlet of Medicare enrollment, and you have your healthcare coverage fine-tuned to perfection. When you are confident that you have considered your current health needs and any expected future healthcare needs, it is time to draft or update your living will or power of attorney documents to reflect any changes you have made. This is not a pleasant task for anyone, but the more detailed and thorough you are able to be in drafting your directive, the less you will have to worry about while you are out living.

With this final step, you are now free to go out and start enjoying this new chapter of your life. Best of all, you will be able to relax and enjoy your retirement with the peace of mind that comes from knowing that your healthcare needs are covered no matter what your golden years have in store for you.

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