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How to Apply for Benefits

Once you reach age 65, you will be eligible for Medicare, the federal medical insurance program administered by the Centers for Medicare & Medicaid Services (CMS). While this is a federal government program, your claims are actually processed by insurers in your region. Medicare will be your primary insurance provider. If you choose the traditional fee-for-service Medicare plan, you will almost certainly need to use your company's retiree benefits, if any, or purchase a Medicare supplement policy known as Medigap policy (see the section on Medigap policy for more information).

Medicare consists of four parts: Part A—Hospital Insurance, Part B—Medical Insurance, Part C—Medicare Advantage (a private plan alternative to traditional Medicare), and Part D - Prescription Drug Insurance. If you are entitled to Social Security benefits, you are automatically eligible to receive Part A once you apply for benefits. There is no cost to you. You've actually been helping to fund this program through your payroll withholding tax. Part B is an optional program for which you pay a monthly premium, and it has strict requirements as to when you must enroll. If you are not entitled to Social Security benefits, you may voluntarily enroll in Part A and Part B if you are age 65 or over and pay the monthly premiums.

IMPORTANT NOTE: By not enrolling in Medicare Part B within the proper time frame, you run the risk of not having adequate insurance to pay for doctors' services (in or out of the hospital), outpatient services, medical tests, or home health care, if needed.

Because Part B covers so many essential services, we strongly recommend that you apply for this program so there is no lapse in coverage. If you have company retiree medical benefits, those benefits may only pay for what Part B does not, so it is essential that you enroll.

If you are receiving Social Security benefits prior to age 65, you will receive a card when you turn 65 notifying you of your enrollment in Medicare Parts A and B. Part A, in this case, is automatic and at no cost to you. If you choose not to elect Part B, simply sign the form that is sent to you and send it back. Otherwise, the premiums for Part B will be automatically deducted from your monthly Social Security check. The monthly premium is subject to change each year.

If you are not entitled to Social Security benefits, you may voluntarily enroll in Medicare at your nearest Social Security office. You must be age 65 or over and enrolled in Part B in order to enroll in Part A. In this case you will need to pay a monthly premium for both Medicare Part A and Part B. The monthly premiums are subject to change annually.

If you are planning to retire at age 65, you have a seven-month window in which to enroll in Medicare benefits. If you enroll before the month of your 65th birthday, you will then be eligible for benefits on the first day of the month in which you reach age 65. If you wait to enroll during the month of your 65th birthday, coverage will start on the first day of the following month. If you enroll more than one month (but within the three months) following the month of your 65th birthday, coverage will start on the first day of the third month following the month of enrollment.

IMPORTANT NOTE: While Part A is retroactive, none of your Part B bills will be paid during the waiting period. So if you're going to enroll in Part B, do it sooner rather than later. If you fail to enroll within the initial seven-month enrollment period, you will have to wait until the next general enrollment period—January 1 through March 31 of any subsequent year. However, your actual coverage will not begin until July of the year you enroll. If you fail to enroll more than a year after you're eligible, it will cost you an additional 10% for each year you wait to enroll. If you continue to work past age 65, you will have a special enrollment period, after you retire, to enroll in Medicare Part B, without waiting for the general enrollment period.

In general, Medicare is secondary payer, under specified conditions, for services covered under a group health plan. This means that claims are first submitted to the group health plan. If the group health plan does not pay all of the expenses on the claim, Medicare may pay secondary benefits for Medicare-covered services to supplement the amount paid by the employer plan.

What if you plan to continue working at your company after you reach age 65? In a large company, your benefits will likely continue unchanged. But, if you have not applied for Social Security, it is a good idea to enroll in Part A anyway. You might be eligible for benefits from Medicare that your employer plan doesn't pay. No sense in enrolling in Part B until you retire, since the extra cost for the Part B premium probably isn't worth any Medicare benefits that you might receive after plan benefits are paid. If you're with a small company (typically fewer than 20 employees), check your post-65 medical coverage with your employer.

SUGGESTION: As long as you're working, you can delay enrolling in Part B coverage until you are no longer covered under your employer's plan (when you terminate employment). And there will be no penalty increase in your monthly premium.

Generally, if you are entitled to Medicare Part A and are enrolled in Medicare Part B, you are eligible to enroll in any Medicare Advantage option that is available in your area. The enrollment period is from October 15th - December 7th of each year. Enrollments are effective the following January 1.

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