What You Need to Know When Starting Medicare

If you’re planning to start Medicare and are unsure where to begin, then you have come to the right place. Our guide will walk you through the essential steps you need to take when starting Medicare for the first time, whether you are turning 65 or transitioning from an employer plan.

Understanding the Basics

Medicare consists of Parts A and B:

• Medicare Part A: Covers hospital services.
• Medicare Part B: Covers doctor visits.

Both Parts A and B are necessary to purchase a Medicare Supplement or Medicare Advantage plan. Typically, Medicare Part A is free if you have worked for 10 years and earned 40 working credits. However, Medicare Part B comes with a premium. As of 2024, this premium is $174.70 per month for most people.

It’s important to note that this premium can increase based on your income. The government reviews your income from two years prior, and if it exceeds certain thresholds, you may pay more for Medicare Part B. For detailed information on these income brackets, please refer to our detailed IRMAA (Income-Related Monthly Adjustment Amount) article for 2024.

Enrollment Timing

Knowing when to sign up is just as important as understanding costs. Let’s start with a common scenario, which is someone turning 65 and planning to enroll in Medicare Parts A and B for the first time.

Initial Enrollment Period (IEP)

You have a 7-month window to enroll in Medicare, known as your Initial Enrollment Period (IEP). This period begins 3 months before your 65th birthday, includes the month of your birthday, and extends for 3 months afterwards. For example, if you turn 65 in April, your IEP starts in January, includes April and ends in July.

During this period, you can choose to purchase a Medicare Supplement Plan or a Medicare Advantage plan. If you opt for a Medicare Supplement Plan, you benefit from a six-month open enrollment period starting the first month you turn 65. During this time, you can buy any Medicare Supplement Plan available in your state without health questions or underwriting.

If you choose Original Medicare along with a Supplement Plan, you will also need a standalone Part D prescription plan. The enrollment period for Part D matches your Initial Enrollment Period for Medicare, giving you a 7-month window. Missing this window can result in late penalties if you lack credible drug coverage.

Transitioning from an Employer Plan

If you are over 65 and transitioning from an employer plan, here’s what you need to know:

Typically, you already have Medicare Part A and have delayed signing up for Medicare Part B. We recommend starting the Part B sign-up process one to two months before you retire to avoid any coverage gaps. Medicare Part B enrollment can be completed online, and you will need to provide proof of credible coverage from your employer to avoid penalties.

Technically, you have an 8-month Special Enrollment Period to sign up for Medicare Part B after losing credible coverage. However, starting Part B immediately ensures no gaps between your employer plan and Medicare.

Important Enrollment Timelines

When starting Medicare Part B for the first time at age 65 or older:

• Medicare Supplement Plan: You still have a 6-month open enrollment period, identical to the window when you first turn 65. You can enroll in any plan without health questions.
• Medicare Part D Prescription Plan: You have 63 days from the end of your employer coverage to sign up without penalties.
• Medicare Advantage Plan: Similarly, you have 63 days to enroll in a Medicare Advantage plan without penalties.

The enrollment windows for a prescription plan or Medicare Advantage plan are shorter when transitioning from a group plan compared to turning 65 and starting Medicare for the first time.

Planning Your Enrollment

For those approaching 65, we recommend beginning your planning during the Initial Enrollment Period, 3 months before your 65th birthday. Sign up for Medicare Parts A and B, and decide whether you want a Medicare Supplement Plan or a Medicare Advantage plan.

For those coming off an employer plan, start the Medicare Part B sign-up process one to two months before your employer coverage ends. Inform Social Security that you want Part B to start as soon as your employer coverage ends to prevent any gaps.

Speak with a Medicare Expert

If you are interested in exploring plan options, whether a Medicare Supplement Plan or a Medicare Advantage plan, we would love to assist you. Our services are free. Contact us at 800-208-4974. We can help you shop for plans and answer any questions.