Costly Medicare Mistakes to Avoid When You Are Turning 65 and Still Working
Medicare is essential for every American that's 65 or older. However, when you are still working, and you are not yet 65, you might not take the guidelines surrounding Medicare enrollment 'seriously.' This should not be the case as you need to plan for Medicare as early as possible, even if you have medical insurance from your current employer and plan to still work past age 65.
There are some mistakes people that are about to be eligible for Medicare make, which might be costly. It would be best if you were not one of these people as we will help you point out these mistakes and how to avoid them.
Mistakes To Avoid
As we mentioned earlier, there are some mistakes that you should avoid when you want to enroll in Medicare. Check out some of these mistakes below.
1. Late Enrollment
One of the major mistakes prospective Medicare enrollees make is enrolling at the wrong time. Timing is crucial when you are approaching 65 as failure to enroll at the right time incurs a penalty. First, there’s something called Initial Enrollment Period. This period is a 7-month period in which you need to enroll for Medicare. The seven-month period starts three months before your 65th birthday month and three months after your 65th birthday month. For example, if your 65th birthday is in August, you have to enroll in Medicare between May and November.
Now, what are the penalties for enrolling late for Medicare?
Late Enrollment Penalty For Part A
Medicare Part A is free for most people, yet there are some that do not qualify for the premium-free Part A. As someone that doesn’t qualify for free Medicare Part-A, you have to enroll when you are first eligible. Failure to do that might lead to your monthly premium going up by 10%. You’ll also have to pay this higher premium for twice the number of years you didn’t sign up.
Late Enrollment Penalty for Part B
The late enrollment penalty for Part B is more 'brutal' than that of Part A, which is why you must avoid it at all costs. With Part B, you might see your monthly premium go up 10% for each of the 12 months you didn't enroll for Medicare Part B. Most times, you will also have to pay this penalty for as long as you have Part B. Again, the penalty also increases the longer you do not enroll for Part B.
Late Enrollment Penalty for Part D
You will have to pay a 1% Part D late enrollment penalty for each month you delay the enrollment into Medicare Part D. Besides, the late enrollment penalty is added permanently to your Medicare drug coverage for as long as you have Medicare. However, you will only have to pay this penalty if there’s a period of 63 days or more in a row when you do not have Medicare drug coverage or another credible prescription drug coverage.at any time after your initial enrollment period.
2. Working With a Large Employer
Companies with at least 20 employees are considered 'large employers.' And the rule for working with one allows you to delay signing up for Medicare until you lose the group insurance the Company is providing for you. However, you can still sign up for Medicare Part A when you are eligible since it is free.
However, you should note that you won't be able to make contributions to your health savings account that's paired with a high-deductible health plan through your employer (if you have one), even if you enroll only in the free Part A. Again, to be on the safe side, it is also advisable to confirm if your current coverage qualifies for Medicare Part B and D. A good way to confirm this is by asking the HR department or your insurance carrier.
3. Working With a Small Employer
If you are working with a company with less than 20 employees, you should sign up for Medicare immediately you are eligible, even if you have health insurance coverage through the Company. When you sign up for Medicare while working with a small employer, Medicare will automatically become your primary insurance which is excellent.
Moreover, instead of using the Company insurance coverage as secondary insurance, you can drop it and pick up a Medigap and a Part D plan. You can also choose to go for Medicare Advantage as these can be more cost-effective.
4. Assuming Your Spouse Would Be Covered By Medicare
Another mistake you can make is by thinking your Medicare will cover your spouse. Medicare does not work like employer-based coverage, which means it only covers an individual. In light of this, Medicare will not cover your family members.
As you can see from this article, some Medicare mistakes can cost you a lot of money. Please avoid them. If you follow the information in this article meticulously, you would be able to avoid these mistakes. Alternatively, as you are getting closer to age 65, you can contact health insurance professionals at Elite Medicare Specialists to advise you on how to proceed.