How to Prepare for Medicare Three Months Before Turning 65

Turning 65 comes with plenty of reminders that time is moving along. Some are pleasant. Medicare paperwork may not be one of them.

The good news is that Medicare does not have to be confusing if you start preparing before your 65th birthday.

In fact, three months before you turn 65 is one of the most important times to begin the Medicare process.

Your Medicare Initial Enrollment Period generally lasts seven months: it begins three months before the month you turn 65, includes your birthday month, and continues for three months afterward. Starting early gives you time to understand your choices instead of making an important health insurance decision under pressure.

Here is a practical countdown for getting ready.

Three Months Before 65: Find Out Whether You Need to Enroll

The first question isn’t which Medicare plan you should choose.

It is:

Do you actually need to enroll in Medicare?

Some people are automatically enrolled in Medicare Part A and Part B because they are already receiving Social Security benefits before age 65. Medicare says that, generally, if you have been receiving Social Security benefits at least four months before turning 65, enrollment happens automatically.

Others need to actively sign up.

If you are unsure, start by checking your status through Social Security or the official Medicare website.

Don’t assume Medicare will simply appear because you had your 65th birthday.

That assumption can create expensive problems later.

Understand the Four Basic Parts of Medicare

Before comparing plans, understand the alphabet soup.

You don’t need to become a Medicare expert, but you should understand four basic pieces.

Medicare Part A primarily covers inpatient hospital care.

Medicare Part B primarily covers physician services and outpatient medical care.

Together, Parts A and B are usually called Original Medicare.

Medicare Part C, better known as Medicare Advantage, is an alternative way of receiving your Medicare benefits through a Medicare-approved private insurance company.

Medicare Part D provides prescription drug coverage.

That sounds simple enough.

Unfortunately, Medicare decisions don’t end there.

People choosing Original Medicare often consider adding a Medicare Supplement, or Medigap policy, and usually need separate Part D prescription drug coverage.

People choosing Medicare Advantage generally receive their Part A and Part B benefits through the Medicare Advantage plan, and most Medicare Advantage plans include prescription drug coverage. Medicare requires you to have both Part A and Part B to join a Medicare Advantage plan.

You can learn more about the different approaches and compare Medicare choices privately at MedicareSelfEnroll.com.

Still Working at 65? Don’t Automatically Enroll—or Automatically Delay

This is one of the biggest Medicare traps.

Many Americans continue working beyond age 65.

If you or your spouse are still actively employed and you have employer group health insurance, you may be able to delay Medicare Part B without a late-enrollment penalty. Medicare specifically advises people working past 65 to determine how their employer coverage works with Medicare before deciding when to enroll.

Notice the word may.

Do not assume all employer insurance allows you to delay Medicare safely.

The rules can depend on your employment situation and the coverage you have.

Talk with your employer’s benefits administrator and ask very specific questions:

“Is my coverage based on current active employment?”

“Will my employer insurance remain primary after I turn 65?”

“Do I need Medicare Part A or Part B for my employer coverage to continue working properly?”

And don’t confuse retiree coverage or COBRA with insurance based on current employment.

If you qualify for the Part B Special Enrollment Period after employer group coverage ends, Social Security allows you to apply during that enrollment opportunity.

This is an area where guessing can become expensive.

Make a List of Your Doctors

Now we get to one of the most practical parts of choosing Medicare coverage.

Write down every doctor you want to keep.

Include:

• Your primary care physician
• Cardiologist
• Oncologist
• Orthopedist
• Neurologist
• Ophthalmologist
• Dermatologist
• Physical therapist or other important providers
• Hospitals and medical systems you prefer to use

Why?

Because your doctors can influence which Medicare option makes sense.

With Original Medicare, you can generally see physicians and providers throughout the country who accept Medicare.

Medicare Advantage plans operate differently. Depending on the plan, they may use provider networks and different rules for receiving care.

A plan can look terrific on paper and become considerably less terrific when you discover your cardiologist isn’t participating.

So before enrolling in a Medicare Advantage plan, verify your doctors.

And don’t rely entirely on an old provider directory.

Call the doctor’s office as well.

Ask specifically whether they expect to participate in the exact Medicare Advantage plan you are considering.

Not simply:

“Do you take Medicare?”

Those are two very different questions.

Make a Complete Prescription Drug List

Next, open the medicine cabinet.

Write down every prescription you currently take.

For each medication, include:

• Exact drug name
• Dosage
• How often you take it
• Whether you use the brand or generic version
• Your preferred pharmacy

This can have a surprisingly large effect on your Medicare costs.

Drug plans have formularies—lists of covered medications—and your costs can vary depending on the drug, the plan and the pharmacy.

That’s why you should never choose a prescription drug plan simply because the monthly premium looks inexpensive.

Premium is not the same thing as total cost.

A plan with a lower premium may have higher costs for the particular medications you use.

If you choose Original Medicare, you can add a standalone Part D plan. If you choose Medicare Advantage, prescription coverage is commonly included in the Medicare Advantage plan.

You can use Medicare’s official Medicare Plan Compare or review your choices at MedicareSelfEnroll.com.

Two Months Before 65: Decide Between Original Medicare and Medicare Advantage

This is the decision that deserves your attention.

You are essentially deciding how you want to receive your Medicare benefits.

Option One: Original Medicare

Original Medicare consists of Part A and Part B.

Many beneficiaries who choose Original Medicare also purchase a Medigap policy to help cover some of the costs Original Medicare does not pay and add a separate Part D prescription drug plan.

One important advantage is broad provider access among doctors and hospitals accepting Medicare.

Option Two: Medicare Advantage

Medicare Advantage plans are offered by private insurance companies approved by Medicare.

They must provide Medicare-covered Part A and Part B services and frequently combine medical and prescription drug coverage into one plan.

Some plans also provide additional benefits that Original Medicare does not routinely cover.

But benefits, provider networks, prescription formularies, copayments and other plan details can vary considerably.

There is no universally “best” choice.

There is only the choice that works better for you.

Someone who travels frequently may have different priorities from someone who receives virtually all medical care within one local health system.

Someone taking expensive medications may evaluate plans differently from someone taking no prescriptions.

Someone with multiple specialists may care more about physician access.

That’s why Medicare should be compared personally—not by asking your neighbor what he bought.

Your neighbor may be wonderful.

But unless he has the same doctors, prescriptions, finances and medical needs, he shouldn’t be choosing your Medicare plan.

Don’t Overlook Your Medigap Enrollment Opportunity

If you are considering Original Medicare with Medigap, timing is particularly important.

Under federal law, your six-month Medigap Open Enrollment Period generally begins the first month you are 65 or older and enrolled in Medicare Part B.

During this period, you generally have important federal protections allowing you to purchase Medigap coverage without being denied because of pre-existing health conditions.

After that initial Medigap enrollment period, your ability to buy or switch Medigap policies can be more limited under federal rules, although individual states may provide additional rights.

So don’t casually dismiss this decision by thinking:

“I’ll worry about a supplement next year.”

Understand your rights before making the decision.

One Month Before 65: Verify Everything

By now, your Medicare picture should be coming together.

This is when I recommend doing what I call the Medicare final inspection.

Check:

Do I have confirmation of my Medicare Part A and Part B effective dates?

Have I decided between Original Medicare and Medicare Advantage?

Have I checked my doctors?

Have I checked my prescriptions?

Have I checked my preferred pharmacy?

Do I understand my premiums, deductibles, copayments and maximum potential costs?

If I chose Original Medicare, have I addressed Medigap and Part D?

And perhaps most importantly:

Do I know when my new coverage begins?

When you enroll matters. Medicare’s coverage-start rules vary based on when during your Initial Enrollment Period you sign up.

You do not want to cancel existing insurance too early and accidentally create a gap in coverage.

Watch Out for Medicare Late-Enrollment Penalties

Medicare deadlines matter.

If you delay Part B when you don’t qualify for a Special Enrollment Period, you can face a late-enrollment penalty. Medicare states that the Part B penalty is generally an additional 10% for each full 12-month period you could have had Part B but did not enroll.

Part D has its own late-enrollment rules.

Generally, going 63 days or more without Part D or other creditable prescription drug coverage after you become eligible can result in a Part D late-enrollment penalty.

These penalties can potentially stay with you for a very long time.

This is one reason I tell people:

Don’t procrastinate with Medicare.

There are plenty of things in life you can put off.

Cleaning the garage is one of them.

Medicare enrollment shouldn’t be.

Don’t Choose a Medicare Plan Based Only on the Premium

This may be the most important financial lesson in the entire article.

Premium does not equal cost.

A Medicare Advantage plan may have a very low—or even $0 additional—plan premium, but you still need to examine deductibles, copayments, coinsurance, prescription costs, provider networks and the plan’s annual out-of-pocket limit for covered medical services.

A Medigap policy may involve a higher predictable monthly premium while reducing certain out-of-pocket medical expenses.

Neither approach is automatically right or wrong.

The question is:

Where do you want the financial risk to sit?

Before enrolling, look at what happens if you actually become sick—not simply what the plan costs while you’re healthy.

Your Three-Month Medicare Checklist

Three months before 65 is your opportunity to prepare without panic.

Find out whether you’re automatically enrolled.

Determine whether employer coverage changes your Medicare timing.

Understand Parts A, B, C and D.

Make lists of your doctors and prescriptions.

Compare Original Medicare and Medicare Advantage.

Understand your Medigap rights.

Check prescription coverage.

Verify effective dates.

And only then make your choice.

Most importantly, don’t let somebody pressure you into making a Medicare decision you don’t understand.

Medicare is your healthcare.

You should be able to research your options privately, compare them carefully and enroll when you are comfortable with your decision.

That’s the philosophy behind MedicareSelfEnroll.com: education first, enrollment second.

You can also verify Medicare rules directly through Medicare.gov and enrollment information through the Social Security Administration.

Turning 65 shouldn’t feel like you’re taking a final examination on government health insurance.

Start three months early.

Make a checklist.

Ask questions.

Compare before you commit.

Because the best Medicare decision isn’t necessarily the plan with the flashiest advertisement or the lowest premium.

It’s the Medicare coverage that fits your doctors, your prescriptions, your finances and your life.