With 10,000 Baby Boomers turning 65 every day for the next 18 years, enrolling in Medicare can become increasingly confusing for more and more people. Most people think that when they turn 65, a magical switch turns on and poof, you are automatically on Medicare!
Medicare changed the rules during the Clinton administration when Social Security extended the time for receiving 100% of your social security benefits.
Social Security does all of the paperwork for Medicare and now with enrolling in healthcare reform the lines at Social Security are astronomical. This has changed how the Social Security Administration wants you to enroll, namely, using their website at socialsecurity.gov/medicareonly. The wait is over 3 hours at local Social Security offices, so doing this online saves you a lot of time and frustration.
Most think that Medicare begins the day of your 65th birthday when actually Medicare begins the 1st day of the month that you turn 65…if your birthday is March 16 (or any date in March), then your Medicare will begin March 1st not the date of your birthday. If your birthday is the 1st of March, then your Medicare will begin February 1st…1st of the prior month.
Social Security will only begin enrolling you in Medicare at least 90 days prior to turning 65. If you wait until the month that you turn 65, then your Medicare will begin the next month. I always advise my clients not to wait until the last minute to enroll in Medicare because if you have not enrolled in Medicare, then you do not have the benefits that Medicare offers.
Medicare has 2 parts; Part A which is in-patient hospital care that begins generally the 1st day of the month you turn 65; but Medicare Part B you must enroll in.
For those that are not working with true company benefits at 65, then if you are not enrolled in Medicare Part B, you will not have any of the benefits that Part B offers which are doctor, doctors performing surgery, outpatient surgery, MRIs, CAT Scans, Chemo-therapy, radiation, etc.
Wait 90 days past the month you turn 65 and you will have the famous Part B penalty. What is that penalty you ask? It is 10% for each 12 month period that you could have had Part B, but failed to enroll. Wait 3 years and have a 30% penalty. 3X10%=30%.
The largest Part B penalty I have witnessed is a man from Texas who’s wife put him on her COBRA group plan. He was 79 and waited past his Medicare Part B enrollment time and his penalty was 79-65=14 years X 10% penalty =140% penalty each month until he passes away or is no longer on Medicare.
In other words, his Medicare penalty will last the rest of his life. Do not wait to enroll at the right time and the correct way!
How to Receive your Medicare at the Right Time
1) Turning 65 and Receiving Your Social Security Check is the easiest way to receive your card. Medicare will send your “Welcome to Medicare” kit 90 days before you turn 65 with your Medicare card in the kit. If you do not receive it, then call Social Security at 1/800-772-1213 and find out where your card is! Remember, Social Security processes all of the paperwork for Medicare.
2) Turning 65 and NOT Receiving a Social Security Check because you are still working or may not be working, but waiting past 65 to receive 100% of your Social Security. Visit Social Security online at socialsecurity.gov/medicareonly 90 days before you turn 65. It takes Social Security 90 days to do the paperwork and if you wait until you have turned 65, then you will only have Medicare Part A benefits and no benefits or what “Part B” covers. Social Security takes 90 days to the paperwork for Medicare. Always check with Human Resources if you are delaying “Part B”. Many health insurance carriers are changing their rules regarding “Part B” and may require you to enroll in it.
3) Under 65 and Receiving Social Security Disability will receive their Medicare automatically on their 25th month of receiving their disability check. Make sure that you have applied for both Medicare’s Part A and B.
4) Turning 65 and “still working”- Talk to your Employers Human Resources. Ask if you need to enroll in Part B. If you do not need Part B because you are “still working” or your spouse is “still working” and you may be on their group plan, then call Social Security to delay “Part B” and let them know that you have creditable coverage with your group plan. You will receive your Medicare card with “Part A Hospital Only”. Your Medicare number should be your Social Security number with a “T”, if you are not receiving your Social Security check. See the 2015 Medicare & You Handbook about delaying Part B.
5) Retiring and enrolling in Medicare-When you decide to retire and need to enroll in Medicare Part B, the process is different. On page 26 of the 2015 Medicare Handbook, it discusses what to do after you leave your employment.
The handbook states that you will have 8 months to sign up for Part B without a penalty. When I perform a Medicare consultation for someone retiring, I always advise them to make sure that they have Part B in place when leaving their employment and group benefits. If you are not enrolled in Part B, you will not have the benefits of “B”.
The process to enroll in Part B after you have delayed has to be done correctly,
- Call Social Security at 1/800-772-1213 and advise them that you are retiring and need to enroll in Part B of Medicare because you had delayed it.
- You will have a Special Enrollment Period that lasts for an 8-month period without receiving a Part B penalty. After the 8 month period that you are no longer working, you will receive a Part B penalty if you enroll in Part B and this penalty goes all the way back to the day you turn 65.
- There are 2 forms that Social Security will send you and on the top of each form written in red letters is Special Enrollment Periodfor the Social Security agent that is processing them to know that you are signing up at the right time and keep from giving you a penalty.
- Form #QMB No0938-0787 known as Request for Employment Information: For proof of group health care coverage based on current employment. This information is needed to process your Medicare enrollment application. If you have had 2 or more jobs since turning 65, then all companies have to sign a form.
- Form HCFA-40B known as Application for Enrollment in Medicare: this is your application for medical insurance part of Medicare known as Part B. Social Security fills out this form.
Once the employment form is signed by your company, take both forms to your local Social Security office for your Medicare to begin when you have retired. You can mail your forms back to Social Security, but the wait is longer to receive your Medicare card with both Parts A and B.
*Note: If you are a non-working spouse, then your Medicare card will be the Social Security number of the working spouse with a “B”. Also if you have a disabled child who never worked, then their Medicare number will be the Social Security number of one of the parents with a “C” which stands for “child”. I have a disabled sister and she is receiving Medicare benefits from my father and her Medicare card is his Social Security number with a “C1.
The best advice that I can give anyone who is turning 65 is take your time when enrolling in Medicare. Many over think their Medicare enrollment and miss special enrollment rules for Medicare because with Medicare…It is what you don’t know that will hurt you!!