When Should You Start Planning for Medicare?

If your 65th birthday is on the horizon, you might want to start nailing down a plan for enrolling in Medicare. Although you register through Social Security, the application is separate from when you apply for Social Security benefits. You become eligible for Medicare at age 65, but you’ll probably start to receive a bunch of mail and calls from insurance companies before you even fill out the application.

Being new to Medicare can sometimes feel overwhelming, but it doesn’t have to be. Let’s walk through when you should start planning for Medicare so that you don’t accidentally make an irreversible mistake.

Taking in Social Security Benefits

When you claim Social Security benefits at least four months before you turn 65, you do not have to apply for Medicare because you will be auto-enrolled in Medicare Parts A and B. Your Medicare card should also arrive a few months before your birthday.

If you are not taking Social Security benefits, you will need to submit a Medicare application. This can be completed online, or you can contact Social Security directly in person or by phone.

Initial Enrollment Period

It’s essential to be on time if you need to apply for Medicare manually. Unfortunately, you won’t receive a courtesy call informing you it’s time. The government expects you to know your timeline of when to register. The time to enroll when you turn 65 is known as your Initial Enrollment Period (IEP). This window begins three months before your 65th birthday month and ends three months after.

The only exception to these rules is that if your birthday falls on the 1st of the month, your IEP will start a month early.

Late Penalty

If you do not enroll during this window, you could face a late enrollment penalty if you cannot provide proof of creditable coverage during the time you decided not to enroll. This penalty fee accumulates as time passes, so it’s best to know when your retirement timeline and Medicare deadlines will cross roads to avoid being penalized.

Part D enrollment

The timeframe to enroll in a Part D (prescription drug) plan is the same as your Initial Enrollment Period. During this time, you can shop for a Part D plan, and coverage will begin based on what month during your IEP you apply for a plan.

Although Part D is technically a voluntary program, you will incur a late-enrollment penalty if you do not enroll in a prescription drug plan during your IEP or have proof of creditable coverage. This penalty fee gets permanently added to your Part D monthly premium and grows each month you go without coverage.

So, say you decide to decline coverage and then realize you need a Part D plan five years later. Because you went all that time without a Part D plan, a late-enrollment penalty will be added on top of your Part D premium for life.

Medicare Advantage enrollment window

After reviewing your options, if you want a Medicare Advantage plan with your Medicare Parts A and B, then you can enroll in a plan during your 7-month IEP window. If you enroll in the three months before your birthday month, your coverage will be effective the 1st of your birthday month along with Medicare Parts A and B.

Medigap Open Enrollment

If you are interested in a Medigap plan for your secondary coverage with Medicare, the best time to apply is during your Medigap Open Enrollment Period. Your initial window to apply for a Medigap plan with no health questions revolves around your Medicare Part B effective date. You can apply for a plan within 6-months of your Part B effective date. Medigap coverage will then become secondary to Medicare.

Get started sooner rather than later

It’s better for your application process to take a little longer than to miss your enrollment periods. If you’re getting ready to retire, find out when your window to apply for everything begins, and keep track of all you have to do on your end so that you are not scrambling at the last minute and making a mistake.

These are some of the more mundane parts of retirement you have to get through, but you want to ensure you are medically covered once you begin transitioning from group coverage to Medicare.