The Best Time to Sign Up for Medicare

As retirement age approaches, one may wonder if they’re eligible for Medicare. A person becomes eligible to enroll for Medicare when they turn 65. But that doesn’t mean they have to enroll right away.

The best time to enroll in Medicare is when a person or their spouse — whichever is still employed — has health insurance through their employer. If they don’t sign up for Medicare during the open enrollment, they could end up with late enrollment penalties and coverage gaps. 

Who Is Automatically Enrolled in Medicare?

If a person receives Social Security benefits at least four months before their 65th birthday, they will be automatically enrolled in Medicare Part A and B. Once the insured person receives their Medicare card, they can use it the first of the month after they turn 65. However, if a person’s birthday falls on the first of the month, their coverage will begin a month early.

Part A (Hospitalization) is free if the insured or the insured person’s spouse has paid Medicare taxes for the previous 40 quarters or ten years. Part B has a monthly premium and covers doctor and outpatient services. The Social Security Administration deducts the premium from the monthly benefit automatically.

Should a Person Sign up During Their First Enrollment Period?

One must enroll in Medicare during their initial seven-month enrollment period. This enrollment period begins three months before a person’s 65th birthday and concludes three months after their birthday.

A person may choose to wait if they or their spouse are still working and have health insurance through their active employer. Otherwise, they must enroll in Medicare during their initial enrollment period to avoid late enrollment penalties and delayed coverage.

The term “active employer” is crucial. If a person has other insurance not provided by their or their spouse’s current employer, they must still enroll in Medicare during their initial enrollment period.

When Will Medicare Coverage Begin?

If a person signs up during the first three months of the initial enrollment period, their Medicare coverage begins on the first day of the month they turn 65. If their birthday falls on the first day of a month, their coverage begins on the first day of the previous month.

If they enroll in Part B during the month of their 65th birthday or the three months following their birthday month, coverage will begin on the first of the following month.

After the IEP begins, a person can sign up for premium-free Part A anytime. Their coverage will begin six months after they reach the age of 65, but no earlier than the month they turn 65.

Does One Qualify for A Special Enrollment Period in Medicare?

The special enrollment period (SEP) allows one to sign up for Medicare Part B while they have coverage from their own or their spouse’s employer and for up to eight months after the job or insurance ends, whichever comes first.

A person’s choice is also influenced by the size of their company and whether the employer’s plan is first or second in line to pay their medical bills.

Larger corporations

If a person or their spouse works for a large corporation, they can postpone signing up for Medicare until their employment or coverage ends, whichever comes first. These large employers are required to provide a person and their spouse with the same benefits that they provide to younger employees and their spouses. This means that the employer’s coverage can remain their primary coverage.

Small companies

If a person or spouse works for a small business, Medicare generally becomes the primary coverage at age 65, with the employer’s coverage becoming secondary. Medicare pays the medical bills first, followed by the company’s group plan, which pays only for services covered by the plan. One must enroll in Medicare during their IEP to avoid major coverage gaps.

Take Note

Part C Medicare Advantage

After one signs up for Parts A and B, they can also enroll in a private Medicare Advantage plan during their IEP.

Part D prescription plans

Prescription drug coverage follows a different set of rules. One can enroll in private Part D during their initial enrollment period. However, they are optional if they have other prescription drug coverage as good as the Medicare-approved plans.

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