If you want to begin Medicare immediately (the first day of the month in which you turn 65):

You will use your seven-month Medicare Initial Enrollment Period. During this period, you can enroll in Medicare Part A, Part B, and Part D and select a Medicare Advantage Plan. Once you enroll in Parts A and B, you can select a Medicare Supplement (Medigap) plan during its six-month open enrollment period. 

Tip:Your best option is to enroll in Medicare during the three months leading up to your birthday month. This means your Medicare coverage will begin on the first day of your birthday month, avoiding a gap in your medical coverage.

If you do not use your initial enrollment period and do not have health coverage that Medicare considers comparable, you are permitted to enroll later during Medicare’s “general enrollment period,” but you will incur late enrollment penalties attached to your Part B premium. These penalties are not slaps on the wrist. They are added to your Part B premium for as long as you receive Medicare.

If you are actively working and receiving healthcare through your employer, or if you are coverage through spouse’s benefits:

You can delay enrolling in Medicare without penalty for as long as you receive benefits from an employer with more than 20 employees. In this instance, Medicare would act as a secondary payer if you enroll (note: you will pay your Part B premium!).

A word about Part A coverage while you continue to work: Because you do not pay a premium, it may appear there is no downside to enrolling when you turn 65 even if you are working. True, but…

If you have an HSA, you cannot contribute to it while on Part A. Also, the Medicare Advantage plan Trial Period will begin, even though you did not elect Part B and have not enrolled in a Medicare Advantage plan. This means that if you elect a Medicare Advantage plan when you finally retire, you may have lost a valuable right to back out of the plan during your first year with no consequences. I know, its confusing.

You can optionally enroll in Medicare at any point while still receiving employer-based coverage, but you must enroll when this coverage ends. Medicare gives you an eight-month special enrollment period following the loss of your employer-based coverage. Like the initial enrollment period, you can enroll in any Medicare Plan and elect a Medigap plan.

Tip:You may technically have an eight month special enrollment period, but during those eight months, other deadlines are ticking by (including the the six-month Medigap open enrollment period and the 63-day Part D enrollment period). My advice: Plan your coverage to take effect immediately on the lapse of your previous coverage.

If you receive health coverage as an employee (or as the spouse of an employee) of an organization with more than 20 employees, it is highly likely your coverage qualifies to act as your first payer in front of Medicare. In this instance, great. Your coverage is good to go if you want to keep it.

If you receive employer-based health coverage from an employer with 20 employees or less, Medicare will act as the primary payer. As a result, you must enroll to avoid surprise financial exposure and penalties.

Check with your HR department before making any decisions. Even when you have qualifying employer-based insurance, some employers designate Medicare as your primary health coverage when you turn 65.

Important: Medicare does not count retiree health insurance or COBRA as creditable alternative coverage. Medicare will treat these as secondary coverage. In these cases, you must enroll when you turn 65 or face a late enrollment penalty.

Always reality check your assumptions about your eligibility with Medicare, your HR department and/or a trusted expert (licensed) advisor.

Prescription drugs routinely account for the largest healthcare costs consumers incur. How you avoid this financial risk depends greatly on how Medicare views your current coverage.

If you have “creditable” prescription drug coverage:

If you currently have coverage Medicare deems to be as good as that provided by a Medicare Part D plan (i.e., creditable) you can delay enrolling in a Part D plan without penalty. 

If you do not have a creditable prescription drug plan (e.g., you lose it when your employer coverage ends): 

You must enroll in a Part D plan within 60 days to avoid penalties. 

The penalty: Your monthly premium may be one percent higher for every 12 months you delay signing up for a Part D plan. 

Tip: You generally receive a letter from your employer or insurance carrier each year verifying you have creditable drug coverage. Keep this letter to provide to Medicare for proof.

You have a six-month Medicare Supplement plan (Medigap) open enrollment period with a guaranteed issue right that begins when you enroll in part B. You cannot delay this enrollment period even if you have other secondary coverage. The clock starts counting down regardless. Once the six months are up, you no longer are guranteed acceptance to a Medigap plan.

If your secondary coverage is free or low cost and you will have it for life then congratulations! Keep it of course.

However, if you incur a premium for your secondary coverage, and/or deductibles, copays or coinsurance, it is possible that a Medigap plan could offer better coverage at a lower price. If so, the best time to elect this coverage is during your open enrollment period.

If you maintain your secondary coverage past the six-month Medigap open enrollment period and then decide to change you may be required to undergo medical underwriting, and are not guaranteed to be accepted.

You don’t buy the insurance to cover you while you are healthy. You buy the insurance you may need if you become sick or injured.

A low premium may be appealing but it is not the end of the story. Every plan has costs to actually use the coverage…. Deductibles, copays, and/or coinsurance.

Ask your advisor to “run the numbers” by calculating the annual maximum out-of-pocket expense you may incur for using the plans you are considering. (Yes, we independent brokers absolutely do this for you). You may be surprised at the cost comparison.

If you have a limited income, you may be able to get assistance with your health costs, such as:

​​​Medicare Savings Programs (MSPs)

MSPs can help pay the Part B premium and, depending on the program, can assist with other costs. Contact your State Health Insurance Assistance Program (SHIP). You can find the contact info at shiphelp.org and get more information on MSPs.​​

Federal Prescription Drug Assistance

Extra Help is a federal program that helps pay for some to most of the costs of Medicare Part D prescription drug coverage. Contact the Social Security Administration at 800-772-1213 or visit the SSA website to learn if you are eligible.

State Prescription Drug Assistance:

New Jersey: The Pharmaceutical Assistance to the Aged and Disabled (PAAD) program is a state-funded program that helps eligible older adults and individuals with disabilities save money on prescription drug costs. You can find information on this other NJ assistance programs at staterxplans.us/new-jersey.html

Pennsylvania: Pennsylvania’s prescription assistance programs for older adults, PACE and PACENET, offer low-cost prescription medication to qualified residents age 65 and older. You can find more information at pacecares.magellanhealth.com/