Are you getting close to your 65th birthday? If so, you have likely begun to think about signing up for Medicare insurance coverage. However, this decision is not always black and white, which means it requires a bit of consideration and a full understanding of the benefits and how Medicare works. Learn more about the process of signing up for Medicare and whether or not it is time for you to take this step here.
Before You Decide
If you are just three months away from turning 65, or if you are past this milestone already, but not ready to begin receiving your monthly cash benefits, you have the option to use the online retirement application to simply sign up for Medicare. This will allow you to apply for your retirement benefits or your spouse’s benefits at another date.
Prior to making the decision if it is time to sign up for benefits, you will need to understand how waiting to sign up will affect:
- The total lifetime benefits you can be paid
- Your health insurance coverage
If you have an HSA, Health Savings Account, or health insurance that is based on your current employment, you may need to ask your personal insurance company how signing up for Medicare benefits is going to affect you.
Lifetime Benefits that Can Be Paid
If you are able to live to the life expectancy for a person your age, it will not matter if you choose to begin receiving benefits now, when you reach the age of 66, 70 or any number in between. You will wind up receiving approximately the same amount in total, lifetime benefits.
However, if you apply for benefits before you reach the full retirement age, which is currently the age of 66, you will find your benefits are decreased, simply because you are tapping into them earlier than expected.
For example, if you begin receiving retirement benefits when you turn 65, the benefits will only be 93.3 percent of what you could receive at your full retirement age. Keep in mind, you would (in this case) receive the benefits for a period of 12 more months during your life.
Waiting to Receive Benefits
If you delay your retirement benefits until after you have reached the full retirement age (for any month up to the age of 70) you will be able to increase the benefits you receive thanks to the accumulation of Delayed Retirement Credits. For example, if your full retirement age is set at 66 and you don’t begin collecting them until you reach age 70, the benefit you receive will be 132 percent of your entire retirement age benefit.
If you have family members who are qualified for benefits, the delay may mean that you could lose some of the benefits they would have received. However, the delay in benefits will also increase the survivor’s benefit that your spouse may eventually receive.
Continuing Work
When you are considering signing up for Medicare, you will also have to consider certain things if you plan to keep working. If you have not reached the full retirement age and you earn a certain amount of money, the excess will be deducted from the benefits.
If you wait to receive your benefits until the time you reach the full retirement age, you may be able to receive your retirement benefits without any type of limit on your earnings.
Important Information to Keep In Mind when Signing Up for Medicare
Medicare is the country’s health insurance program for individuals who are over the age of 65. The program works to cover the cost of health care but it doesn’t cover all of a person’s medical experiences or the total cost of most people’s long-term care needs. There are two parts of Medicare health coverage, Part A, and Part B:
- Part A Insurance – Hospital Insurance: This helps to pay for inpatient care in a skilled nursing facility or a hospital. It may also cover some hospice care and health care.
- The majority of people who are over the age of 65 will be eligible for free Part A Medicare Hospital Insurance if they have been employed and paid their Medicare taxes for a long enough period of time. It is important to sign up for Part A Medicare Hospital Insurance three months prior to your 65th This is necessary regardless of if you want to start receiving retirement benefits.
- Part B – Medical Insurance: This coverage works to pay for services from doctors, as well as other medical supplies and services that are not covered by Part A insurance.
- Any person who is eligible for Part A hospital insurance will be able to enroll in Part B Medicare medical insurance. A monthly premium has to be paid. There are some beneficiaries, especially those with a higher income, which will have to pay a higher monthly payment for Part B insurance.
Should You Sign Up for Part B – Medical Insurance?
When you are thinking about signing up for Medicare, you may wonder if you should enroll in Part B, after all, you will have to pay premiums for this coverage.
If you opt not to enroll in Part B Medicare and then decide that you want to down the road, your coverage may be delayed and it may be necessary for you to pay a higher premium each month unless you have qualified for a Special Enrollment Period.
Making a Decision and Taking Action
Since your medical expenses and the chances of you being hospitalized will increase as you age, taking a proactive step to ensure you are covered with proper insurance is a must. If you have been thinking about signing up for Medicare and want to know how to apply for Medicare, it is best to visit the Social Security Website. Being informed and understanding the requirements of this coverage will help ensure you get the benefits that you need and deserve after working for your entire life.
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.
