Medicare's Special Enrollment Period

Medicare eligibility begins at age 65. If you fail to sign up at age 65, if you instead sign up late, say at age 66 or 67, then there is a penalty of 10% for each year you're late, and you'll have to pay the penalty for twice the number of years you're late. For example, if you sign up at age 67, two years late, you'll pay a 20% penalty for the next four years.But what if you continue working past age 65 and you're already covered under a Group Healthcare Plan (GHP) through your employer. If you sign up for Medicare then you'll be paying for insurance twice, once for whatever your employer charges, and again for Medicare. Medicare is currently $174.70/month or $2096.40/year. That's a lot of money.Since it would be very unfair to make people who continue working pay for insurance they don't need, you are not required to sign up for Medicare while you're still covered by a GHP. Once GHP coverage ends for any reason, then you're required to sign up for Medicare within eight months. It's called the Special Enrollment Period.I thought I'd post this information online because I just discovered several friends who are approaching age 65 who intend to continue working for employers who provide GHP's. They all thought they were required to sign up for Medicare, and they were unaware they would be charged for it even though there's no advantage to having two insurance plans at the same time.Helpful Medicare webpage: When can I sign up for Medicare?Helpful Social Security webpage: Special Enrollment PeriodBoth Medicare and Social Security update their webpages often, so if these links are dead when you read this you'll have to Google around.--Percy

Not quite. Especially outside of the narrow window you describe.Medicare Parts A and B both only pay 80% of what they cover; you need to pay the remaining 20%. That's popularly known as the "Medicare Gap". You end up needing to cover that gap with a second medical insurance policy.Medicare Part C deals with private insurance to cover that gap along with some things that Medicare doesn't cover. Many, if not most, Part C plans include Part D (Prescription) coverage. Part C plans fall into one of two tracks:

1. "Medi-Gap" insurance (AKA "regular Medicare" or "original Medicare") which just acts as secondary insurance such that Medicare pays first and then Medi-Gap gets billed for the remainder.
2. Medicare Advantage was created in 1997. These plans take over and manage all your Medicare plans and billing.

Please note that Part C, just like Part D, only sets the standards and requirements for the private policies sold by private insurance companies as Medicare Part C coverage.You pay your monthly Medicare Part B premium through a deduction from your monthly Social Security check (Part A was paid through years of payroll taxes) -- if you're not receiving Social Security, then Medicare bills you quarterly. Medi-Gap and Advantage plans would bill you directly, though some Advantage plans are structured to be "free" (and some will even refund you that Part B premium). As I said, you just hand the keys to your Medicare over to the Advantage plan and it does all the rest.When you sign up for Part C coverage, you need to choose which track to travel. It is very difficult to switch tracks later and I think you are allowed to switch only once in your lifetime.Please note that the TV ads flooding the airwaves and cable bandwidth misrepresent Medicare Part C as only consisting of Medicare Advantage; not even a single mention of Medi-Gap plans even existing. That's a huge investment in advertising, especially considering how some are just giving these private insurance plans away for free. How are they making any money off this? Well, they bill the government for your claims.On YouTube, you can find many critics of Medicare Advantage, including talk show radio host Thom Hartmann who has done extensive research on the American healthcare system and from whom I have heard criticisms of fraudulent billings and subjecting clients to the standard private insurance problems like needing to have treatment approved (and potentially denied) and being restricted to in-network providers.Here is one video by Thom Hartmann on the subject:https://www.youtube.com/watch?v=rqhBhbrXvwA&t=12s (would not embed)Each state provides a Medicare counseling service called SHIP (State Health Insurance Program), called HICAP (Health Insurance Counseling and Advocacy Program) in California (and could go by yet other names in some other states). As described in our Medicare presentation at OLLI, they will counsel you about your options, etc, but they will not try to sell you on any given plan. They will provide you with the information you will need to make your own decision. As for my own experience, I retired from the reserves 11 years ago when I turned 60, at which point my retirement benefits included Tricare health insurance. I also had group coverage from my civilian job, so I used the group coverage as the primary and Tricare as secondary. Immediate effect was that all medical expenses, including co-pays, were paid for and I had no out-of-pocket (I forget whether that also applied to prescription co-pays). When I turned 65, my Tricare coverage was converted to Tricare-for-Life which combined Medicare with Tricare acting as my Medi-Gap coverage (plus Part D). At that point, I opted out of my civilian job's group coverage, but kept the dental plan. After retiring from my civilian job, I'm on Tricare-for-Life supplemented by a federal employees' dental and vision plan.

Good information, but I was only focused on the Special Enrollment Period that comes into play when at age 65 you're still covered by a Group Healthcare Plan (GHP). Many people make the mistake of thinking they'll be assessed penalties if they fail to sign up for Medicare at age 65, and that's not true if you're covered by a GHP.What *does* happen when people covered by a GHP sign up for Medicare at age 65 is that they start getting billed for Medicare, and then they find themselves paying for insurance twice, once for the employee portion of their GHP, and again for Medicare, and there's little to no advantage to that because Medicare requires the GHP to be the primary. I was hoping to help people avoid that mistake.The disadvantage of Medicare as secondary is that it only pays for Medicare covered services and the total amount paid must be equal to or less than the Medicare approved amount. Since the Medicare approved amounts are almost always less than what other insurance companies approve, this means that Medicare as secondary almost never pays anything.But the mistake is correctable. At companies where you can opt out of your GHP then you might do that if you decide Medicare is the better option for you. And you can always opt out of Medicare, and if you have a GHP then when you reenroll there is no penalty. You also have to factor in how much benefit relative to cost an advantage or supplemental plan might add to your Medicare coverage.Did you give up your GHP instead of foregoing Medicare at age 65 because TFL+Medicare was cheaper/better than TFL+GHP?--Percy

Mainly, I was following orders.When I retired from the military, I was issued an ID card which was also my insurance card, but it was only for regular Tricare (no Medicare since I was 60, not 65). But it was only valid until I turned 65, at which point I was required to renew my ID with Tricare-for-Life (TFL) which includes Medicare.So from age 60 to 65, I still had my Group Health Plan (GHP) as my primary and added my straight Tricare as my secondary.I continued to work a bit past age 66 (full retirement age for Social Security was 66). When I turned 65 and got TFL, I opted out of my GHP (keeping the dental and vision) for that last year before my civilian retirement. Thus I was never in the position of having to make Medicare my secondary; didn't have to deal with it, so I wasn't aware of that.So for six years now with TFL I've had Medicare as my primary and Tricare as my secondary and between the two of them everything is covered. Well, there were two things in six years that weren't covered so that amounts to about $300 out of pocket combined. And only Tricare covers my prescriptions with a $13 co-pay.The Air Force technical term for my current state is "Fat, dumb, and happy." The in/out-network issue exists for GHP and Advantage plans, but not for Medicare (nor TFL). In that video, Thom Hartmann describes the situation of going into the hospital for an operation and part of the OR team just happens to not be in your network (something you have no way of checking ahead of time, especially in an emergency) so without warning you get a big bill from them. That happened to me when I had emergency abdominal surgery while I was only covered by my job's GHP. The anesthesiologist was not in-network, so I got a surprise separate bill from him. I could handle it, but imagine the severe fiscal shock that can be for others, especially for big-ticket items.I also experience a somewhat unique network issue. Our division and its parent company were both located in Southern California, but then our division was sold to a company on Long Island, NY. Our new owner welcomed us and provided us with a good GHP that they had created themselves. As soon as we got the booklets that list the providers in our network, I looked up my providers but couldn't find them. Then I noticed how every provider in that booklet was located in the area around New York City. Hmm. So lots of cross-country travel for routine medical and dental appointments? I brought this up with our CEO who was able to convince Corporate to authorize us to shop for our own GHP.I've read my medical bills in the past. A large percentage of the charge for each procedure ends up getting written off, which I assume is their cost for being in that GHP's network. I also assume they can count that as a business loss for tax purposes.