Once you turn 65, you become eligible to apply for Medicare. Other factors also come into play for what makes you eligible, such as those who are under the age of 65 and have disabilities, or anyone who has received Social Security benefits for two years and is approved. But, just because you are eligible, does that mean it is mandatory to sign up?
What is required?
If you become eligible for premium-free Medicare Part A and are also receiving Social Security benefits, you will be required to enroll for Part A.
If you are retired but continue to receive healthcare coverage from your previous employer, then you need to be aware of how the coverage will work once you turn 65. Depending on the company, you may or may not receive coverage once you turn 65. Some companies will cut you off, or they will offer supplemental benefits which might require you to enroll for Medicare Parts A and B. If you are required by the employer to enroll for Parts A and B, then Medicare will become your main source of coverage, whereas your retiree health plan will be more of a supplemental coverage. You might also have to enroll in Medicare Part D to ensure that your prescriptions will be covered.
What is not required?
While enrolling for Medicare Part A is required if you receive Social Security benefits, for the most part, Medicare Parts B, C, and D are optional. However, there are late enrollment periods for each plan if you choose to enroll at a later time.
Late Enrollment Penalty
For Medicare Part A, you won’t have to pay a late enrollment penalty as long as you are eligible for premium-free Part A. However, if you did not qualify for premium-free Part A and missed the enrollment period when you first became eligible for Medicare, you will be required to pay a higher premium for twice the number of years you went without coverage. For example, if you were not enrolled in Part A for four years, when you finally enroll, you’ll be paying the penalty of a higher premium for eight years.
For Medicare Part B, the late enrollment penalty will stay with you for the rest of the time you continue to have coverage. The penalty will tack on an extra 10% to your premium every month for every 12-month period you went without being enrolled in Part B. However, if you meet certain conditions, it’s possible to not pay a late enrollment penalty when you enroll for Part B during a Special Enrollment Period.
Medicare Part C doesn’t have a penalty fee, but Medicare Part D does. The late enrollment penalty will be calculated by multiplying 1% of the national base beneficiary premium, which is $32.74 as of this year (2020), and then multiplied by the number of full, uncovered months you went without having Part D. The beneficiary premium is subjected to change each year, so expect that your penalty fee will also change.
Can Medicare work with other health insurance plans?
Just as mentioned above, Medicare does have the ability to work in unison with retiree health benefits by being the primary payer if the company is smaller (less than 20 employees). If the company is larger with more than 20 employees, then Medicare will act as a secondary payer. Medicare will also work with COBRA, which lets you keep the group health insurance plan that was set up by your company. If you are already enrolled with Medicare, then COBRA will be the secondary payer.
Medicare can also work with Veteran Affairs (VA) by covering the medical expenses from doctor and hospital visits outside of a VA facility. Medicare will also be the primary payer for those who are active-duty military and covered by TRICARE. If you are retired from the military but want to keep your TRICARE coverage, you’re required to enroll for Medicare Part B. If you have TRICARE FOR LIFE (TFL), then that will cover your Medicare’s deductibles and coinsurance.
Medicaid can also be used as a secondary payer if you have Medicare as your main source of coverage. If you choose to be dual-eligible, which means you receive benefits from both Medicare and Medicaid, then be aware that there are two categories for dual-eligibility: full-benefit dual-eligibles and partial duals. Full-benefit dual-eligibility means that while you do have Medicare, you are also receiving benefits under Medicaid. Partial duals means that Medicaid will not pay all of the expenses, meaning you’ll only receive assistance in covering what could be your cost-sharing for Medicare-covered services. However, if you choose to be dual-eligible, you need to make sure that your healthcare providers will accept both.
Are you eligible for Medicare?
If you’re eligible for Medicare and are curious to know what each plan offers, then reach out to Bobby Brock Insurance today! Our well-trained and experienced agents offer Medicare help for free to give you the answers you need. We can help you compare costs of plans, estimate your savings, and help you with the enrollment process, so give us a call at 877-877-5505.