When Should I Apply for Medicare?

There are three important retirement-age questions: When should I apply for Medicare? When should I start drawing Social Security retirement benefits? Should I give my spouse a survivor benefit when I apply for my pension? These questions will be addressed in this and the next two blog posts.

For retirees born after January 1, 1938, full retirement age (FRA) for Social Security is greater than 65. Most of those retiring now were born between 1943 and 1954 and have an FRA of 66. Medicare eligibility, however, begins at age 65. Whether or not to sign up for Medicare or a Medicare Advantage plan on turning 65 is one of the most important decisions facing persons at retirement age.

Medicare Part A services include hospitalization, special care units like ICU or coronary care, operations, nursing services, drugs, supplies, and appliances while hospitalized, special treatments like radiation and chemotherapy, laboratory and diagnostic tests like X-rays and CAT scans, rehabilitative therapy, and hospice. A person with enough work history to qualify for a Social Security check is eligible for Medicare Part A with no monthly premium. Those who do not qualify for free Medicare Part A and who do not get assistance based on low income pay a premium that may be as high as $426 per month.

When a person turns 65 or has been eligible for Social Security disability for two years, there is an enrollment window that begins three months before the eligibility month and ends three months after the eligibility month. Failure to enroll when eligible results in a 10% delayed enrollment penalty. The penalty lasts for two times the number of years that the person delayed. Therefore, it is usually wise to enroll as soon as the enrollment window opens.

Medicare Part B services include doctors’ services, outpatient care, physical and occupational therapy and some home health care. The 2014 Part B premium is $104.90 for most members, but is higher for members with high income. Part B is a bargain because the federal government pays about 75% of the cost of coverage.

The penalty for delayed enrollment under Part B is much more costly than for Part A. The penalty is 10% per year and has no end date. Therefore, if the retiree waits two and one half years to enroll in Part B, the premium would be increased by 30%.

I could have sworn the receptionist asked for my Medicare CAKE!
I could have sworn the receptionist asked for my Medicare CAKE!

Enrollment for both Part A and Part B may be deferred without penalty while the member is covered by health coverage through the member’s employer or the member’s spouse’s employer or union group health plan. When employment or coverage under the union group health plan ends, there is there is a special eight-month enrollment period to enroll in Part A.

COBRA coverage presents a pitfall. When coverage based on employment ends, COBRA coverage is not qualified coverage to defer Medicare enrollment.

Even employees who are working past age 65 and covered under an employer’s health plan may need to sign up for Medicare. Many employee health plans contain coordination-of-benefit provisions that require employees who are eligible to purchase Medicare coverage. A 65-year-old employee who needs an operation may find out to his or her bitter disappointment that the hospital stay is not covered by the employer’s group health plan because the coverage is “coordinated” with Medicare.

It is almost always advisable to sign up for Medicare as early as possible. When employed past age 65, the employee should investigate carefully whether the employer’s health plan qualifies for deferment and whether the plan requires the employee to enroll in Medicare.

Low-income individuals may be eligible for “Qualified Medicare Beneficiary,” “Specified Low-Income Medicare Beneficiary” or “Additional Low-Income Medicare Beneficiary” coverage. These programs cover Medicare premiums and some cost-sharing up to 135% of the federal poverty standard. Application for these benefits are through the agency that handles Medicaid applications. Help with prescription coverage is available on the medicare.gov website.


John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
©2014 John B. Payne, Attorney

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