Things to Think About Before Turning 65
Your phone's blowing up with call centers and your mailbox looks like a Medicare advertising convention. But do you actually need to do anything about Medicare when you turn 65? The answer depends on your situation.
The Very First Step
Ask yourself: "Do I NEED or WANT to join the Medicare health insurance system?"
Most people become eligible at 65, but that doesn't mean everyone needs to jump on board right away. Your current health insurance situation determines what you should do. Don't let anyone pressure you into enrolling before you understand your options.
Your Current Insurance Situation
On ACA / Marketplace Insurance
You need to enroll in Medicare at 65. Do it during your initial enrollment window — 3 months before your birth month, your birth month, and 3 months after. Don't wait. Get on it as soon as your window opens.
Already Getting Social Security Benefits
You'll be automatically enrolled in both Part A and Part B. But you don't have to keep Part B if you have qualifying employer coverage (group health insurance through current employment at a company with 20+ employees). Follow the instructions that come with your Medicare card to decline Part B if you don't need it yet.
Working for a Small Employer (Less Than 20 Employees)
You'll need both Part A and Part B. Medicare's secondary payer rules come into play here — Medicare becomes primary, so you must enroll.
Working for a Large Employer (20+ Employees)
Just because you have employer coverage doesn't mean you have to drop it when you become Medicare-eligible. You can delay Medicare enrollment without penalty as long as your employer plan is active coverage based on current employment. However, the drug coverage piece requires a separate check: your employer is required to notify you each year whether their drug plan is creditable, meaning it's expected to pay at least as much as Medicare Part D on average. If it isn't creditable, you could face a permanent late enrollment penalty when you eventually sign up for Part D. Ask your benefits representative directly whether your drug coverage is creditable, and keep any written notice they provide. Then call Fred to compare your total costs and coverage against what Medicare offers.
Retired But Still on Your Former Employer's Plan
Some employers offer retiree health coverage that bridges the gap until you're Medicare-eligible. At 65, you'll transition to Medicare. Some employers even provide a health reimbursement account to help with Medicare expenses. Call Fred when you're approaching 65 to set up the right Medicare plans.
On Social Security Disability and Already Have Medicare
When you turn 65, you get a one-time, six-month window to enroll in a Medicare Supplement without being penalized for pre-existing conditions. Don't miss this opportunity!
On COBRA and Turning 65
COBRA is tricky. Medicare becomes your primary payer at 65, so you must enroll in Part A and Part B. You can keep COBRA as secondary, but it rarely makes financial sense — COBRA products are usually more expensive than Medicare's supplemental products. Don't rely on your HR department for advice; call Fred instead.
The Bottom Line
Don't just enroll in Medicare because someone said you had to or because you thought you should. Make an informed decision. The first step is answering that basic question: "Do I need or want to enroll in Medicare Part A and/or Part B?"
Don't even think about Medicare products (Supplement, Advantage, Part D) until you know you need Medicare itself. Call Fred — he'll help you figure out if you need Medicare now or if you can safely wait.