According to the U.S. Census Bureau, U.S. citizens aged 65 or older numbered 55.8 million in 2020, which is 16.8% of the population, or 1 out of 6 Americans. For comparison, in 1920 the proportion was less than 1 in 20.
Silver Tsunami
The rapid growth was largely attributed aging baby boomers, who were born between 1946 and 1964 and began turning 65 in 2011. We are at the peak time for boomers turning 65 now, with an American turning 65 every 8 seconds. By 2030, all baby boomers will be age 65 and over, and growth in this segment will begin to slow.
What to Do
If you’re one of the many Americans turning 65 soon, one of the perks is that you qualify for Medicare. Medicare is confusing, though, so this guide is provided to help you with the Medicare basics, so that you can hopefully know where to start and what to do.
If you have health coverage from your current active employment, do not assume that you must enroll in Medicare when you turn 65.
The Medicare Basics
The 4 parts to Medicare:
Part A - Inpatient care, including hospitals, skilled nursing facilities, and hospice, plus some home health care. Part A has no premium if you (or your current or former spouse) worked and paid Medicare taxes for at least 10 years.
Part B - Medical insurance, including outpatient and home health care from doctors and other health care providers, durable medical equipment, and some preventive services. Depending on income level, most people pay a monthly premium for Part B. In 2023, the standard monthly premium for Medicare Part B enrollees is be $164.90.
Part C - Medicare Advantage is run by private companies who contract with the federal government to provide Parts A and B (and usually D) and may also include coverage for vision, hearing, dental, and other benefits. You must have both Part A and Part B before enrolling in a Medicare Advantage plan.
Part D - Prescription Drug Coverage is also run by private companies and helps cover prescription drug costs. You must sign up for Part A or Part B before enrolling in Part D. There is a late-enrollment penalty if you don’t enroll in Part D when first eligible, unless you have other “creditable coverage.”
In addition to the above, there’s also Medicare Supplement Insurance (Medigap), which is extra insurance sold by private health insurance companies that helps pay your share of out-of-pocket costs in Original Medicare.
When to Sign Up
It's important to sign up as soon as possible to avoid penalties or gaps in coverage. (If you are age 65 or older and receive Social Security benefits, or if you’re already receiving Social Security due to a disability, you will be automatically enrolled in Part A.)
For most people, the best time to sign up for Part A and Part B is during the Initial Enrollment Period, which is the three mosnths before and after the day you turn 65. , but there are exceptions.
If you’re covered by an employer group health plan (through you or your spouse), when you turn 65, you can wait and enroll in Part B later during a Special Enrollment Period, and there will be no penalties if you sign up or add Part B during this time. The Special Enrollment Period will apply:
If you or your spouse are working and still covered by the group health plan.
Within 8 months of the day you or your spouse stop working, even if your group health plan continues for a time.
Within 8 months of the group health plan ending while you or your spouse continue to work.
Your coverage begins the month after you sign up.
If you miss both the Initial Enrollment Period and the Special Enrollment Preiod, you can sign up during the General Enrollment Period, which lasts from January 1 and March 31 each year. Your coverage begins the month after you sign up. However, there is typically a life-long penalty if you sign up during this time.
Where to Sign Up
Enrollment for Parts A and B can be done through Social Security online at https://www.ssa.gov/medicare/sign-up. Be prepared to supply Social Security Number, information on where you were born, any current group health plan coverage information. You’ll be logging into your mySSA account to apply for Medicare, if you have one. If you don’t have a mySSA account, you’ll create one during the application process.
What Plan is Best for You?
This is where things get confusing for a first-timer (as if it’s all been easy so far). Once you’re enrolled in Part A and B, there are choices to be made: stick with Original Medicare, add a Part D plan or a Supplement, or go with a Medicare Advantage plan? After that there are more choices: which Part D or Supplement, or which Advantage plan?
If You Need Help
If you get confused, which is natural, consider calling an agent who offers many plans and can guide you to the best one for your needs. I’ve been helping customers for over ten years, I represent many carriers, and I don’t charge a fee for my services. You can contact me here.