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Medicare: How and when to apply

Turn 65 just like 10,000 baby boomers — people born between 1946 and 1964 — do every day and sign up for Medicare, the health insurance program for people 65 and older or those who have received Social Security disability benefits for two or more years.

Sounds easy, but many people are unclear whether and when to sign up for Medicare Part B, which covers outpatient medical care, including most doctor visits.

People who are collecting Social Security benefits are automatically enrolled in Medicare Part B (and Part A, hospital coverage) when they turn 65. Those who are not receiving such benefits, have to apply for coverage.

medicareEnrolling in Medicare starts with a basic understanding of the insurance’s four parts:

Part A helps cover inpatient hospital care, skilled nursing care, hospice care and home health care. Most people get Part A premium-free since it was earned by working and paying Social Security taxes.

Part B helps cover services for outpatient health care including doctors, home health care, durable medical equipment and some preventative services. In addition to having paid into the program while working, Most people pay a premium for Part B. In 2015, the monthly premium for most people is $104.90, the same as in 2013 and 2014; some high-income individuals pay more than the standard premium.

Part C is Medicare Advantage and allows the recipient to receive all heath care services through a provider organization. Such plans include all benefits and services covered under Part A and Part B, usually include Medicare prescription drug coverage and may include extra benefits and services for an extra cost. You must be enrolled in Part A and Part B to enroll in Part C. Premiums vary depending on state, private insurer and whether care is through a health maintenance organization or a preferred provider organization.

Part D helps cover the cost of prescription drugs. Most people pay a premium for Part D, but people with low income and resources may qualify for extra help from Social Security to pay the premium and deductible. (To determine if you qualify, go to www.ssa.gov/prescriptionhelp.)

Unfortunately, understanding what Medicare is doesn’t eliminate all the confusion of signing up for the program.

Of the 14,000 questions fielded by the Medicare Rights Center in New York through its national help line last year, trouble enrolling in Medicare B topped the list. Many people had difficulty navigating specific hurdles, didn’t understand enrollment periods or were confused about eligibility.

Such confusion can cause people to sign up late for Medicare Part B, which can lead to a hefty penalty that stays with the recipient for life.

There is a seven-month window to enroll in Medicare that starts three months before the month you turn 65, includes your birthday month and extends three months afterward. Missing the deadline can result in a lifelong penalty of 10 percent on the Part B premium for each year you fail to enroll. Enroll at age 70, for example, and pay an additional $52.45 a month — $629 a year — a 50 percent up charge. According to the Centers for Medicare and Medicaid Services, almost 700,000 people were paying a late enrollment fee in 2012.

The best advice may be to familiarize yourself with the rules because if you aren’t collecting Social Security benefits, you won’t get an official notice telling you to sign up.

And there’s plenty to think about. Among them are:

Insurance at Work. If you’re still receiving health benefits through your or a family member’s job, you may be able to delay signing up for Medicare Part B without a penalty.

Continuing an employer’s health plan through COBRA, however, would be a mistake since COBRA is not considered coverage based on active enrollment. You can, however, enroll in both Medicare and COBRA, paying both the Medicare Part B and COBRA premiums; COBRA would function as a secondary coverage or supplemental plan.

In instances where companies offer to extend work-based insurance for a period after employees leave a job, it is also a mistake to assume that you have eight months from the time your work-based insurance coverage ends to sign up for Part B. To avoid a penalty, you need to sign up within the eight months of your job ending.

Retiree Benefits. If you have retiree health benefits from a former employer, you still must sign enroll in Medicare during your initial enrollment period to avoid a Part B penalty.

Private Insurance. If you’re covered by a health insurance policy you purchased yourself, sign up for Medicare when you turn 65. To cancel your private policy, contact your insurer.

Medicare enrollment is handled by the Social Security Administration. You should contact your local office about how and when to enroll to avoid both a penalty and a coverage gap. You should document all of your conversations because if you are given inaccurate information that causes you to incur a penalty, you may have recourse.

If you don’t enroll in Medicare Part B when you first become eligible, you may have to wait until the general enrollment period, which runs from Jan 1 through March 31 each year.

It is important to note that people who have Medicare coverage are not affected by the Affordable Care Act, said Kristen Alberino, Social Security Public Affairs Specialist in Quincy, Mass. “Medicare is not part of the Affordable Care Act’s Health Insurance Marketplace,” she explained. “If you are a Medicare beneficiary, your Medicare benefits are not changing. You do not need to replace your Medicare coverage with Marketplace coverage.”

Medigap (Supplement) Explained. A Medicare Supplement Insurance (Medigap) policy, sold by private companies, can help pay some of the health care costs that Original Medicare doesn’t cover, like copayments, coinsurance, and deductibles.

Some Medigap policies also offer coverage for services that Original Medicare doesn’t cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs. Then your Medigap policy pays its share.

A Medigap policy is different from a Medicare Advantage Plan. Those plans are ways to get Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits.

For more information about Medicare Parts A, B, C and D, go to www.medicare.gov or read the publication on Medicare at www.socialsecurity.gov/pubs/EN-05-10043.pdf

For free personalized Medicare counseling services, contact State Health Insurance Assistance Programs at www.shiptacenter.org or 800-MEDICARE (800-633-4227); the Medicare Rights Center help line at 800-333-4114; Medicare Interactive at www.medicareinteractive.org; or Medicare Advocacy at www.medicareadvocacy.org/medicare-info. — COMPILED BY ELLEN WEINGART

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