If you work or have ever worked, you have likely paid into the Medicare system. However, not everyone knows about or understands the benefits they will become eligible for when they reach the age of 65. Taking some time to learn about signing up for Medicare at 65 and why it is so important can help you get the coverage you need and deserve.
Your Tax Rate
The majority of workers will pay 1.45 percent of their earned wages into a Medicare trust fund. Most companies have to pay a matching 1.45 percent for each employee they have. If you are self-employed, you will pay 2.9 percent of your income into this trust fund. As of 2013, thanks to the Affordable Care Act, those individuals earning over $200,000 per year and couples who earn over $250,000 per year have to pay in 0.9 percent of their earnings.
When is it Time to Sign Up for Medicare?
The period for signing up for Medicare at 65 lasts for three months prior to your 65th birthday and can begin as soon as the first day of the month of your birthday. This initial enrollment period lasts from three months before to three months after you turn 65. If you don’t sign up during this seven-month period, then you can sign up between the dates of January 1st and March 31st (with coverage beginning on July 1st); however, may face higher premiums because you waited to enroll.
- Special Note: The premiums for Part B Medicare coverage will increase by 10 percent for every 12 month period you were eligible for coverage but failed to sign up. In some cases, you may not need to sign up because your work or your spouse’s work provides coverage. If this is the case, you have to sign up within eight months of this coverage ends.
Fees for Premiums
The majority of retirees don’t have to pay any premium for Medicare Part A coverage, which is hospital insurance. In 2013, the average premium for Medicare Part B coverage was just under $105; however, those who earn more than $85,000 (or $170,000 for couples) will have to pay premiums that are higher.
Additional Out of Pocket Expenses
When signing up for Medicare at 65 you may find a number of other expenses you will be responsible for. Just like with private insurance, Medicare comes with coinsurance, copays, and deductibles. However, once the deductible is paid, Medicare will cover 80 percent of the approved amount and there is no annual limit regarding what you may have to pay out of pocket.
Additional Coverage
It can be difficult to know how much you will have to pay out of pocket when you have Medicare coverage. This is why a number of retirees choose to supplement their coverage with Medigap plans or Medicare Advantage coverage. These plans will charge you another premium but fill a number of the cost-sharing requirements.
Free Physicals
When you first sign up for Medicare, you can take advantage of a “welcome to Medicare” preventative care visit from your doctor. This has to be done within the first 12 months of the start of your coverage. This appointment will include a review of your medical history and specific recommendations for your continued good health.
After you have received Medicare coverage for a 12 month period, you will be eligible for a yearly wellness visit with your doctor.
Free Preventative Care
There are a number of preventative care services that are now covered for those receiving Medicare that doesn’t require a deductible or any other type of cost-share. This is thanks to provisions made by the Affordable Care Act. Some of these preventative care tests and exams that are covered include breast cancer screenings and bone mass measurements. However, you may face additional costs if an issue is discovered.
An example of this would be the colonoscopy. This is a procedure offered at no charge for those on Medicare; however, if a polyp is discovered and taken out during the exam, you may have to pay 20 percent of the costs.
What Won’t Medicare Cover?
When signing up for Medicare at 65, you are likely going to hear a lot about what is covered. However, it is important to understand that there are a number of procedures that are not covered. In fact, there are quite a few services that are commonly used by seniors that Medicare will not cover, which include routine eye or dental care, hearing aids, and even dentures. Medicare also does not provide provisions for long-term, extensive care in an assisted living facility or nursing home.
Important Information about Medicare Part D
When you retire, you will also have the ability to choose a Medicare Part D plan. This is prescription drug coverage. The time to sign up for this coverage is between October 15th and December 7th each year. Even if you are satisfied with your current coverage, it may be wise to shop around for another plan. This is because each year premiums and out-of-pocket charges will change. Even though you will be automatically renewed for the plan you currently have each year, it is still smart to see what is going on, if the premium has increased or any other changes may have occurred.
Is it time to begin the process of signing up for Medicare at 65? For most, the answer is yes! Be sure that you adhere to the seven-month enrollment period since you are going to face a number of penalties if you wait past this period of time. It may be wise to research some information about signing up for Medicare in advance, so when the time arrives, you know what to do. Being informed and understanding some of the different factors and features of the Medicare program will help ensure you get the coverage you want and deserve. For more information on how to apply for Medicare give us a call at (866) 260-9829.
Jesse Smedley is the Principal Broker for iHealthBrokers and the founder, president, and CEO of Smedley Insurance Group, Inc. and iHealthBrokers.com. Since the inception of SIG in 2007, Jesse has been dedicated to helping people save money on their health insurance by providing them with resources to educate themselves on all their health insurance options, both under age 65 and Medicare beneficiaries. He is featured in many publications as well as writes regularly for expert columns regarding health insurance and Medicare.
