Friday, January 08, 2010

A Medicare Enrollment Watchout

Retirees Snared by Medicare by Anne Tergesen of The Wall Street Journal reports how complex Medicare rules may cause some people to have a gap in insurance coverage or to pay a permanent 10% premium penalty per year of enrollment delay. If not employed, people are required to enroll within three months before or after the month of their 65th birthday. If employed after age 65, people are required to enroll within 8 months after ending employment.

There isn't a problem for people who take Social Security payments by age 65. They are automatically enrolled in Medicare. However, when people are over 65 and covered by employee health insurance, they sometimes don't realize that initial Medicare enrollment must be completed within 8 months after employment, to avoid the issues with late enrollment. With more people working past 65, the issue with delayed enrollment are happening more frequently.

Although my spouse and I are not eligible for Medicare for many years, I will need to consciously take action to enroll in Medicare before 65, since I am currently covered by my employer's retiree health insurance and plan to wait until 70 before claiming Social Security benefits. I definitely don't want to have a gap in health insurance coverage, or a permanent increase in my premium.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial or health insurance advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC


Grace. said...

Am I missing something? If you plan to work until age 70, aren't you OK with Medicare so long as you enroll within 8 months of leaving your employment? Why would you enroll at age 65?

Super Saver said...


Sorry about the confusion. For clarification, I ended my employment in 2007, when I retired early. Fortunately, I qualified for retiree health insurance from my employer, which will cover us to 65. Even though we won't be working (hopefully:-), I plan to wait until 70 before applying for Social Security, to get higher benefits. Therefore, we will need to make sure to enroll in Medicare when we turn 65, since it won't be automatically done for us.

Kaye Swain said...

Thanks for the heads up. Good info to know.

Thank you, too, for joining us for the Boomers and Seniors: News You Can Use blog carnival at SandwichINK. :)