Medicare is federal health insurance for people age 65 and older, as well as certain younger people with disabilities, ALS, or End-Stage Renal Disease (ESRD).

If you’re approaching 65, an important step is knowing when to enroll to avoid penalties or gaps in coverage.

When Should I Enroll?
Your Initial Enrollment Period (IEP) is seven months:
3 months before 65 → Your birthday month → 3 months after. Your exact enrollment and coverage dates depend on your circumstances. Missing an applicable enrollment period may result in penalties or gaps in coverage.

Separately, applying for Medigap after your protected Medigap enrollment period may result in fewer options, higher premiums, or medical underwriting, subject to guaranteed-issue rights and state law.

Where Do I enroll?

Online: Go to Social Security to complete an application (you will need to sign in or create a secure account).

Visit a local office or call Social Security at 1-800-772-1213 (TTY 1-800-325-0778) Monday through Friday, 8 a.m. to 7 p.m.

Still Working at 65?

If you or your spouse has group health coverage based on current employment, with 20 or more full time employees, you may be able to delay Part B without a late-enrollment penalty. Whether Medicare or the employer plan pays first can depend on the employer and plan, so confirm the rules with the benefits administrator. When the employment or qualifying group coverage ends, whichever occurs first, you have an eight-month Special Enrollment Period for Part B.

Part D follows separate rules. Ask whether your employer prescription coverage is “creditable” and retain the annual creditable-coverage notice. If you lose creditable drug coverage, enrolling within 63 days can help you avoid a Part D late-enrollment penalty.

COBRA is not considered viable coverage after retirement. And, it does not extend the Part B Special Enrollment Period, so do not wait for COBRA to end before reviewing your Medicare enrollment deadlines.

Medicare at a Glance

Part A: Hospital insurance that helps cover inpatient hospital care, skilled nursing care, hospice, and certain home health care.

Part B: Medical insurance that helps cover doctors, outpatient care, preventive services, and medical equipment.

Part C: Medicare Advantage, a private-plan alternative to Original Medicare that includes Parts A and B and usually Part D.

Part D: Prescription drug coverage.

Medigap: Private supplemental insurance that works with Original Medicare to help pay some out-of-pocket costs. It cannot be used with Medicare Advantage.

Original Medicare generally allows you to see any provider who accepts Medicare. However, it doesn’t cover everything. After the applicable Part B deductible, you generally pay 20% of the Medicare-approved amount for many Part B services. Part A has different deductibles and cost-sharing requirements. Original Medicare does not have an annual out-of-pocket limit unless you add other coverage.

Two Ways to Receive Your Medicare Coverage:

Medicare Advantage (Part C)
Medicare Advantage is offered by private insurance companies approved by Medicare. The plans cover Medicare Part A and Part B services and usually include prescription drug coverage. Some plans include dental, vision, hearing, fitness, and other benefits. Plan benefits, premiums, cost sharing, provider networks, referral requirements, and prior-authorization rules vary. Review a plan’s providers, formulary, benefits, and costs before enrolling.

OR

Medicare Supplement (Medigap) + Part D
This type of policy is also offered by private insurance carriers approved by Medicare and can help cover many of the Original Medicare out-of-pocket costs. Medigap requires a separate premium. And, a stand alone prescription drug plan (Part D). Availability, pricing, and medical-underwriting rules may vary depending on when and where you apply.

What About Prescription Drugs?
Medicare Part D helps pay for prescription medications.
If you choose Original Medicare and do not have other creditable drug coverage, enroll in a separate Part D plan. Many Medicare Advantage plans include Part D coverage.

If you go 63 days or more without Part D or other creditable prescription drug coverage after your Initial Enrollment Period ends, you may owe a late-enrollment penalty that generally lasts as long as you have Part D coverage.

What Will Medicare Cost?
Most people do not pay a premium for Part A because they or a spouse paid Medicare taxes for long enough to qualify (10 years). Your remaining costs depend on your income, where you live, and the coverage you choose. You may have premiums, deductibles, copayments, or coinsurance for Part B, Part D, Medicare Advantage, or Medicare Supplement coverage. Costs and plan terms can change annually.

What Is IRMAA?
If your income is above certain levels, you may pay more for Medicare Part B and Part D premiums through IRMAA (Income-Related Monthly Adjustment Amount). IRMAA is based on your tax return from two years earlier and is recalculated each year. You may be able to request a new determination after certain life-changing events.

Still Contributing to an HSA?

Medicare recommends stopping HSA contributions six months before applying for Social Security or Railroad Retirement Board benefits to help avoid excess contributions. Confirm the appropriate date with your benefits administrator or tax specialist.

Once you are enrolled in Medicare, you can no longer contribute to an HSA. If you apply for Medicare or Social Security benefits after age 65, Part A coverage may be retroactive for up to six months, but not before your first month of Medicare eligibility.

You can continue using existing HSA funds tax-free for qualified medical expenses, including many Medicare premiums and other out-of-pocket healthcare costs. However, HSA funds cannot be used to pay Medigap premiums. Consult a tax professional regarding your circumstances.

The Bottom Line
Medicare is something all Americans and those who meet citizenship or residency requirements need to examine around age 65. Yet, Medicare doesn’t have a one-size-fits-all solution. At Pomfret Financial, we help you understand and compare Medicare coverage options based on your needs and retirement needs, goals and lifestyle.

Plan availability, benefits, costs, and eligibility vary by individual and location. Pomfret Financial is not affiliated with or endorsed by the U.S. government or the federal Medicare program.