| Wed, Jul 18, 2012 @ 09:00 AM

Medicare and Retirement: Not Necessarily Linked

Posted by Medicare Made Clear

Medicare and retirementRetiring at age 65 may have been common when Medicare was established back in 1965. No more.

The full retirement age for Social Security benefits has gone up. It’s 66 for those born 1943 to 1954, and older for those born later. Also, boomers are choosing to work longer. A recent survey found that 73 percent of boomers plan to work past the traditional retirement age.*

But while retirement doesn’t always happen at age 65, for most people, initial Medicare eligibility does. Ignoring it could cost you.

Understand Your Enrollment Timing

You have a set amount of time to make Medicare decisions and take action. This is your Initial Enrollment Period (IEP). It starts three months before your 65th birthday month and lasts a full seven months. (If your birthday is on the 1st, then your IEP starts and ends one month earlier than others born the same month and year.)

Your first decision is whether to sign up for Medicare Part A, Part B, both or neither. Part A covers inpatient care in a hospital or skilled nursing facility. It’s premium free for most people. Part B helps pay for doctor visits and other outpatient care. Part B charges a monthly premium. Both parts have other cost-sharing components such as deductibles, copayments and coinsurance.

Consider Your Employer Health Insurance

Many people who have employer health insurance choose to delay enrolling in Part B. You may not need the coverage, and you can avoid paying the premium. Most people sign up for Part A since it usually doesn’t cost anything and you can avoid having to do it later.

If you decide to delay Part B because you’re still working, then you need to:

  • Notify Medicare of your decision.
  • Pay particular attention to when you’ll be able to sign up later.

Avoid Paying Penalties

You may qualify for an eight-month Special Enrollment Period when you retire or your employer insurance ends. You must sign up for Part B during this time, or you may be charged an enrollment penalty. You can also sign up for Part A at this time if you didn’t already.

The Part B penalty is 10% of the premium for every full 12-month period that you delay enrollment. This can add up if you decide to wait several years. And the penalty is charged monthly for as long as you have Part B.

You may also want to delay getting Medicare Part D prescription drug coverage until you retire. It’s important to make sure that your current drug coverage is at least as good as what you can get with Medicare. This is known as creditable coverage. If you have it, then you will have up to two months after losing your employer coverage to enroll in a Part D plan without penalty.

Prepare Ahead of Time

You have many Medicare considerations when you have other health insurance. It’s best to talk to your plan administrator about your options. With a little work up front, you can be prepared to make a smooth transition to Medicare when the time comes.

For more information, contact the Medicare helpline 24 hours a day, seven days a week at 1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048. If you have questions about Medicare Made Clear call 1-877-619-5582, TTY 711, 8 a.m. – 8 p.m. local time, seven days a week.

* Associated Press-LifeGoesStrong.com Boomers Survey October 2011 conducted by Knowledge Networks October 14, 2011

Resources:

Getting Started: Basic information about Medicare from Medicare Made Clear

Medicare and Other Health Benefits: Official government publication about how Medicare works with other health insurance, who pays first and more.

Medicare & You 2012: The official U.S. government Medicare handbook


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