The longer I work in the insurance industry (and the older I get), the more I receive requests for Medicare tips. I’ve written dozens of courses on the topic and regularly teach insurance courses on the subject. Therefore, I’m happy to offer my list of SOME of the must-know information you should have before enrolling in Medicare.
Tip #1: You’re Not Automatically Eligible or Enrolled
A person must earn a minimum amount of wages to be eligible for Medicare (and all Social Security Benefits). In addition, the wages earned have been paid in a job/occupation for which payroll taxes were paid under the Federal Insurance Contributions Act (FICA). The time period for full Social Security benefit eligibility is 10 years of full-time employment. This is also referred to as 40 credits by the Social Security Administration. (Click here to learn more about earning SS credits.)
The only people who are automatically enrolled in Medicare–meaning they don’t need to sign themselves up personally–are individuals who have already applied for Social Security or Railroad Retirement benefits because they:
- Have been receiving retirement benefits from Social Security or the Railroad Retirement Board for at least 4 months before they turn age 65
- Are not yet age 65 and have been receiving Social Security Disability Insurance benefits for 24 months
- Are not yet age 65 and have been diagnosed with amyotrophic lateral sclerosis (ALS, or Lou Gehrig’s disease)
- Have been diagnosed with End-Stage Renal Disease (ESRD)–regardless of age–and all the following conditions apply:
- The person’s kidneys no longer work
- The person needs regular dialysis or have had a kidney transplant
- Eligibility for Social Security has been established by one of the following:
- The required credits have been earned under Social Security, the Railroad Retirement Board, or as a government employee
- The individual is already receiving, or is eligible for, Social Security or Railroad Retirement benefits
- The individual is a dependent child or spouse of a person who meets one of the previous requirements
If you don’t meet the criteria above, you need to enroll yourself. You can do that online at SSA.gov, in person at a Social Security office, or by telephone. The quickest way to enroll is online–after creating that online account with Social Security.
Tip #2: You Can Only Enroll at Certain Times of the Year
This is probably one of the most important Medicare tips you’ll receive: The best time to enroll in Medicare is during Initial Enrollment Period, which revolves around each person’s 65th birthday. It begins 3 months before the birthday month and ends three months after it. For instance, if your birth is August 4, your initial enrollment period begins on May 1 and ends on November 30.
If you enroll during your initial enrollment period, you will NOT pay a late enrollment penalty. However, if you do NOT enroll during your initial enrollment period, you MAY pay a late enrollment penalty when you do enroll.
The annual Open Enrollment Period runs from October 15 to December 7 each year. Anyone can enroll in Medicare during this time. In addition, those already enrolled in Medicare can change plans during this time. New coverage, as well as any changes, become effective on January 1.
The annual General Enrollment Period runs from January 1 to March 31 each year. Anyone can enroll in Medicare during this period. However, coverage begins on July 1 and enrollment may be subject to a late enrollment penalty.
Click here for more information about initial, open, and general enrollment periods. Several Special Enrollment Periods are available for people who lose existing insurance coverage (such as employer- or group-sponsored health insurance) or who move.
Tip #3: Coverage Isn’t Free
Many people mistakenly believe that because they contributed to the Medicare program through their payroll taxes (FICA), they won’t have to pay a premium for their coverage. Here’s the financial part of my Medicare tips: the scoop about the premiums charged for the various coverage parts:
Medicare Part A/Hospital Insurance: Those who are fully eligible for Social Security benefits (i.e., they have 40 credits) do NOT pay a premium for Part A. Those who are only partially eligible or not eligible at all, may enroll in Medicare and pay a premium. Here’s the monthly premium breakdown:
- 40 credits = $0
- 30 to 39 credits = $278
- 0 to 29 credits = $$506
Medicare Part B/Medical Insurance: Unless they are eligible for Extra Help or also have Medicaid and are eligible for a premium assistance plan, everyone pays a premium for Part B. This applies even if they are also enrolled in a Medicare Advantage Plan (Part C). In 2022, the monthly premium is $170.10. In 2023, the monthly premium will be $164.90.
Medicare Part D/Prescription Drug Coverage: Everyone pays a premium for Part D–unless they are eligible for Extra Help or also have Medicaid and are eligible for a premium assistance plan. The cost for each plan varies, because each plan is sold by a private insurer. Each plan and its premiums are subject to CMS/Medicare rules and state insurance regulations.
Medicare Part C/Medicare Advantage Plans: Like Part D plans, Part C plans are issued by private insurance companies and each plan’s premiums are different. They are also subject to CMS/Medicare rules and state insurance regulations.
Tip #4: Make Sure You Talk to a Trusted Agent
Medicare’s website, medicare.gov, contains the majority of information anyone needs to learn about Medicare eligibility, enrollment, coverages, and how everyone works. Admittedly, not everyone is a computer whiz or equipped with the patience to read through Medicare’s website. That’s why talking to a trusted, professional agent is essential.
Federal law has established guidelines for the sales and marketing of all Medicare plans, and for how people can engage in sales and marketing activities. Click here to review Medicare’s marketing rules and the rules that apply for meeting with an agent.
If any agent, or anyone claiming to be an agent, fails to comply with these rules, find yourself a new agent. And report the person taking advantage of you!
Feel free to ask any questions you might have. I’ll be happy to provide you with more Medicare tips, answer questions, and/or provide you with additional resources. You can reach out to me here.