How Did You Automatically Get Enrolled In Medicare?
President/CEO at Healthcare Solutions Direct, LLC, a nationwide insurance agency focused primarily on the retiree health market.
Medicare is a unique type of health insurance because you do not always have to sign up to get it. Once you turn 65, you will become eligible. If you are already collecting social security benefits, you will automatically be enrolled into what is known as Original Medicare. There is nothing you need to do.
The coverage will begin on the first day of the month in which you turn 65 unless you were born on the first of the month. If that is the case, your coverage will begin on the first day of the previous month. You will get alerted to your coverage automatically in the mail by envelope with your Medicare card enclosed. It is mailed out around three months before your 65th birthday.
For many, Original Medicare is far from complete coverage. It is up to you to decide what changes or additions to your healthcare coverage are necessary. If you are still working, it is also up to you to decide whether you would like to continue using the health insurance offered through your employer or not.
With a decade of experience in the healthcare insurance space, I have talked to thousands of Medicare-eligible individuals. In order to make the best decision on what is right for you, you will need a lot of information. This includes an understanding of what each part within Medicare actually covers.
What does Medicare cover?
There are four parts to Medicare. Part A provides coverage while you are admitted to the hospital as an inpatient. Part B includes coverage for medical expenses for things such as a doctor’s visit, preventative testing, medical equipment and outpatient surgeries and procedures. Part C is known as Medicare Advantage and is another way to get your Medicare benefits through a private insurance company instead of the federal government. Finally, Part D is your prescription drug plan. Original Medicare includes Parts A and Part B only.
What are the benefits?
It may seem intrusive to get enrolled in healthcare without asking for it, but there is a big benefit to it. The benefit to automatic enrollment of Original Medicare is that you do not have to worry about missing your window to gain access. It can also serve as a reminder to review your health insurance and revise the coverage to be more aligned with your specific healthcare needs. Many beneficiaries tackle this process by working with a qualified Medicare insurance agent. They stay on top of all the ins and outs of Medicare so you don’t have to.
Automatic enrollment may also offer you a reduced monthly cost in coverage when compared to your current healthcare coverage. Without the automatic enrollment, I have seen beneficiaries who later found out that they missed the financial savings of not having enrolled into Medicare sooner. The Part A of Medicare is typically free to everyone who is eligible, and the standard monthly premium for Part B is $148.50 in 2021.
What are the drawbacks?
The only drawback to getting auto enrolled into Original Medicare is for those who do not research their options. Having only Part A and Part B for coverage is often not enough. Based on those I have spoken to, assuming Original Medicare will cover all of your healthcare needs can prove problematic down the road. Also, those looking to supplement Original Medicare with a Medigap Supplement plan will typically only have a six-month window to apply without health conditions taken into consideration. Receiving your Medicare card in the mail is not the end of the road, but just the beginning.
How does enrollment work?
Automatic enrollment does not happen for everyone, though. If you hit 65 and are not collecting social security or railroad retirement benefits at least four months prior to turning 65, Medicare enrollment is not automatic. The seven-month initial enrollment period surrounding your 65th birth month is extremely important to understand. You have three months before turning 65, your birthday month and the three months afterward to enroll without any documentation. Those who do not enroll during the seven-month initial enrollment period can enroll during a special enrollment period or general enrollment period. There could be a lifetime penalty associated to those individuals who delay enrolling into Medicare at 65.
To enroll in Medicare without collecting social security, you will still go through the Social Security Administration. The application is available online. This will allow you to complete the process of enrolling into Medicare without having to make an appointment and go into your local office. This is a huge time-saver and is what Social Security recommends for those wanting Medicare while also dealing with retirement.
It is worth noting that you could incur a penalty if you decide to wait on signing up for Medicare. For those who miss the eligibility window around their 65th birthday, there may be a penalty. You could end up paying 10% more for your Medicare Part B premiums for every year that you delayed after the year you turn 65. This is only applicable for people not receiving health insurance while actively employed. Retiree benefits, even if they are employer-sponsored, do not count toward this exception.
There are so many different conditions that come into play when considering enrolling in Medicare. It is important to understand how to get started, whether this happens automatically or not.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.