New to Medicare

Medicare is not one decision. It is a short sequence of them, and the order matters — a couple of these choices are difficult to undo later. Here is the sequence.

1. Work out when you are eligible

Most people become eligible at 65. Your Initial Enrollment Period runs for seven months: the three months before the month you turn 65, your birthday month, and the three months after. Signing up in the first three months means coverage starts on the first day of your birthday month, so there is a real advantage to being early.

You may also qualify before 65 through disability, or with ESRD or ALS.

2. Decide about Part B if you are still working

Working past 65

This is where the expensive mistakes happen, and the rule is not intuitive. It depends on the size of your employer:

• 20 or more employees. The group plan generally pays first, and you can usually delay Part B without a penalty for as long as you keep that coverage.
• Fewer than 20 employees. Medicare generally becomes primary. If you delay Part B, your employer plan may pay very little — and you may not find out until a large claim is denied.

Retiree coverage, COBRA, and marketplace plans do not count as active employer coverage for this purpose. People are caught out by that regularly. If you are in any of those situations, call before you delay anything: (502) 821-2089 TTY 711.

3. Choose your path

Original Medicare covers a lot, but it pays roughly 80% of most outpatient care and has no annual limit on what you can be billed. Nothing caps your exposure unless you add to it. There are two ways to do that:

• Medicare Advantage — a private plan that replaces Original Medicare, usually bundles drug coverage, and caps your annual out-of-pocket costs, in exchange for using a network.
• Medicare Supplement plus Part D — keep Original Medicare, add a Medigap policy to cover the share it leaves you, and add a separate drug plan.

Neither is better in the abstract. Which one fits depends on your doctors, your prescriptions, whether you travel or spend part of the year elsewhere, and how much monthly certainty you want.

4. Get your drug coverage in place

Even if you take no medication at all, going without creditable drug coverage builds a late enrolment penalty that is added to your premium for as long as you have Medicare. It is small each month and permanent, which is a bad combination.

The one thing worth knowing about timing

When you first enrol in Part B at 65, you get a one-time six-month window in which you can buy any Medicare Supplement policy sold in your state without answering a single health question. Outside that window, in most states, an insurer can review your health and decline you.

That window does not come back. It is the single most consequential piece of timing in Medicare, and a lot of people find out about it after it has closed.

Talk it through

Most of this is easier to sort out in a twenty-minute conversation than by reading. Call (502) 821-2089 TTY 711 — we are here Monday–Friday, 8:00 a.m. – 6:00 p.m. ET — or send us your details below.