Preparing for Medicare

Penalty For Delays

Age 65 is when Medicare becomes part of many Americans’ lives. That’s the age when most people become eligible for the federal health insurance program. Learning how to sign up for Medicare can be a lifeline for anyone coping with disappointing or expensive private health insurance coverage.

But you must pay for parts of its coverage, which may not be cheap. So not everyone should sign up right away. Here’s advice about how to decide whether you should join the program, when and how.

A good start is critical. David Littell, retirement income program co-director at the American College of Financial Services in Bryn Mawr, Penn., says that the biggest mistake that individuals can make under Medicare is not signing up for Parts A and B on a timely basis.

“This could result in catastrophic losses for people who end up in a hospital with an accident or illness, then discover that they have inadequate health insurance coverage,” Littell said.

When You Should Apply

What is a timely basis? The key date is four months before your 65th birthday.

Here’s how it works. Say a hypothetical Joan Hall turns 65 in August 2018. If she was receiving Social Security or Railroad Retirement Board benefits at least four months earlier, in April 2018, Hall does not have to do anything.

Hall’s Medicare enrollment will start automatically. Usually, it starts the first day of the month someone is 65.

Coverage does not start automatically for people who are not receiving federal retirement benefits at least four months before age 65. They must take action: signing up for Medicare. When you’re first eligible, there is a seven-month window.

Say Hall was not receiving Social Security in April. Her time window runs from May 2018 through November 2018. That’s three months before her 65th birthday in August through three months after.

During this time, Hall can apply for Medicare Part A. That mainly covers hospital costs. Most people get coverage for free.

Hall also can sign up for Medicare Part B. That covers medical costs such as doctors’ visits.

Not everyone signs up for Part B at 65, even if they get Part A. If you get your health insurance through an employer with 20 or more employers, check with the benefits manager.

Why? If you have coverage by a so-called qualified group plan whose costs and benefits compare well with Medicare, stay in the group and delay signing up for Medicare Part B.

The same is true if your health insurance is through your spouse and the coverage’s costs and benefits are better than Medicare’s.

Otherwise, consider switching to Medicare.

Delay Can Be Costly

Medicare advises people who get health insurance through a smaller firm to sign up for Parts A & B when first eligible. The same typically goes for seniors without employer coverage.

There is no built-in benefit for delaying Medicare as there is for waiting to start Social Security. The advantage to postponing Part B is to avoid paying the premiums until you begin.

In 2018, the standard monthly premium for Part B is $134 per person. Enrollees with high incomes pay as much as $428.60 a month. (This year’s premiums are based on 2016 income.)

For people who delay Part B, there may be a penalty. Your premium rises by 10% for each full 12-month period that you put off enrolling.

So you have a year after the seven-month initial enrollment period ends to get Part B and avoid the penalty. You can also avoid the penalty by continuing coverage from a group health plan.

If you won’t start Medicare automatically, you must take steps to enroll. One possibility is to go online to  ( or call 1-800-992-7724.

This article was originally printed and published for Investor’s Business Daily, and was writted by Donald Jay Korn. The original article has been edited for reposting on SeniorQuote’s blog.