Americans approaching retirement age are usually aware of the basic facts about Medicare. However, people sometimes make assumptions that can lead to pitfalls. It is important to know what to do and when, because mistakes can cause penalties.
One mistake some people make is assuming that they will not qualify for Medicare because they have not worked long enough. The waiver of premiums for Part A (hospital insurance) is based on the payment of Medicare taxes by applicants or their spouses for at least 10 years. However, for those who do not qualify for a waiver of Part A premiums, they still have the option to enroll in Part A and pay premiums. Additionally, one does not need work credits to be eligible for Medicare Part B (physicians’ services) and Part D (prescription drugs).
A common mistake that people may make for different reasons is failing to sign up for Medicare at the right time. To avoid late penalties, one must sign up for Medicare during their designated Initial Enrollment Period. Your Initial Enrollment Period is a seven-month period beginning three months before the month you turn 65 and ending three months after the month you turn 65. This is true even if your “full retirement age” for Social Security retirement benefits is age 66
Sometimes people hear about the Medicare “Open Enrollment Period” in the fall of each year and believe that this is when they should first sign up for Medicare. Actually, Open Enrollment is when people who are already receiving Medicare may change their Medicare coverage or plan for the following year. First-time Medicare enrollees must sign up during the three month period before and after they turn 65. One legitimate reason to delay signing up for Part B is if you continue to have health coverage from an employer after age 65; in this case you can delay enrollment in Part B with no penalty.
Finally, it would be a mistake to decide not to sign up for Part D just because you do not currently take any prescription medications. An unforeseen medical condition could necessitate expensive prescriptions, and having a Part D plan can be crucial.
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