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  • Writer's pictureSteve Coker, CFP

Understanding Medicare Enrollment

This week I came across a 75-year-old retiree who had not yet signed up for Medicare. Since Medicare enrollment begins at age 65, this was a big miss! Not only does enrolling late result in higher premiums, the failure to enroll in Medicare can leave retirees dangerously lacking in insurance coverage. One common reason for this error is the deferral of Social Security Retirement benefits, as some mistakenly believe that if they defer taking Social Security Retirement benefits to 66 or later, they must also delay enrollment in Medicare. This is not the case! Medicare enrollment begins at 65 and is independent of when you elect to begin your Social Security Retirement benefits. Here are the basics of when to enroll in Medicare.

Remember age 65

The “Initial Enrollment Period” for Medicare begins 3 months before the month of your 65th birthday and extends 3 months after the month of your 65th birthday. For most retirees, it is best to enroll as soon as possible since the sooner you enroll, the sooner the coverage starts. Don’t be confused with the Open Enrollment Period or General Enrollment Period that you may find on the internet – the Initial Enrollment is just for you and is based on your birthday. If you fail to enroll during this window you will be subjected to a 10% late penalty on your Medicare Part B premium for each year that you are late. Ouch!

The exception: “The Special Enrollment Period”

There is an exception for those who were still working at age 65 (or whose spouse was still working) and had health insurance through an employer. In that case, there is a “Special Enrollment Period” that allows you to sign up for Medicare up to eight months after the employment ends. Once again, it is best to enroll as soon as possible since coverage will not begin for one to two months after you enroll.

Don’t wait for the government

Don’t wait for the government to automatically enroll you or to send you a notice for enrollment. A common source of confusion is the automatic Medicare enrollment for Social Security Recipients. If you are taking Social Security Retirement benefits at age 65 you will automatically be enrolled in Medicare Part A and B, leading some to believe that Medicare enrollment is automatic for all – it is not. If you are not yet taking Social Security retirement benefits at age 65 you will not be automatically enrolled in Medicare. Furthermore, you will not receive a notice to enroll. Even if you are taking Social Security Retirement it is best not to rely on the automatic enrollment, so that you can review what coverage you would like to receive.

What if you miss?

If you miss your Initial Enrollment Period don’t despair. While there are some penalties for being late it is still better to get coverage as soon as possible. You may enroll for Medicare Benefits during the General Enrollment period, which runs from January to March of each year. For most, Medicare becomes a significant benefit that pays a majority of the medical costs during the retirement years. Make the most of what has been made available to you.


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