A Senior’s Guide to Turning 65

Congratulations!  You made it.

Turning 65 is a big deal and you should feel great about reaching such a big milestone in your life.

You’ve earned the right to relax and enjoy the fruits of your labors, whether your time has been spent raising a loving family, enjoying success in your chosen profession, or living in a home and place of your dreams.

Or, all of the above!

One of the biggest benefits of turning 65 is that you’re now eligible for Medicare.  That alone should be cause for celebration since one of the challenges seniors face is how to pay for medical treatment at a time in their lives when healthcare may matter the most.

Everyone is already familiar with Medicare to some degree or another.  We’re here to help you fill in any holes about what it is, how to qualify and get coverage, and some special situations and benefits you need to know that might apply to you.

What is Medicare?

Medicare is the federal health insurance program for people who are 65 or older and citizens or permanent residents of the United States, certain people younger than 65 with disabilities, and those with Amyotrophic Lateral Sclerosis (ALS) or End-Stage Renal Disease (ESRD, permanent kidney failure requiring dialysis or a transplant).

Medicare has four parts:

1. Medicare Part A covers medically necessary inpatient hospital stays, care in skilled nursing facilities, hospice care and some home health care.
2. Medicare Part B covers certain doctors’ services, durable medical equipment (i.e. wheelchairs), preventative care, outpatient services, lab tests and x-rays, and ambulance services.  Part A and Part B are often referred to as Original Medicare.
3. Medicare Part C is also known as Medicare Advantage and is a health plan offered by private insurance companies approved by Medicare to provide Part A and Part B benefits under one plan. Some people choose to get Medicare coverage through a Medicare Advantage plan instead of through Original Medicare. Medicare Advantage plans must offer the same level of coverage as Original Medicare and many times will offer expanded benefits such as prescription drug coverage and dental, vision and wellness programs.
4. Medicare Part D provides stand-alone prescription drug coverage that works alongside Original Medicare. It is offered through private insurance companies that have contracts with Medicare.

What are the Medicare eligibility requirements?

Part A

If you are 65 or older, you are eligible for Part A coverage at no cost if:

• You currently receive or are eligible to receive Social Security benefits. You must have 40 credits accumulated through the payment of payroll taxes.  You earn one credit for every quarter you have worked as long as you meet minimum income guidelines.  In other words, 40 credits equals 10 years of a qualifying work history.  If you have less than 40 credits, then you can still get Part A coverage, but you will need to pay a premium.
• You currently receive or are eligible to receive railroad retirement benefits.
• Your spouse receives or is eligible to receive Social Security or railroad retirement benefits. This applies to spouses who are living, deceased or divorced from the person seeking coverage.
• You or your spouse worked long enough in a government job where Medicare taxes were paid.
• You are a dependent parent of a deceased child who is fully insured.

If you are less than 65 years old, you are eligible for Part A coverage at no cost if:

• You have received or you have been entitled to receive Social Security disability benefits for 24 months.
• You are getting a railroad retirement board disability pension and you meet certain conditions.
• You get Social Security disability benefits because you have ALS (Lou Gehrig’s disease).
• You worked in a government job long enough where you paid Medicare taxes, and you have been entitled to receive Social Security disability benefits for at least 24 months.
• You have kidney failure and you receive dialysis or a kidney transplant, and you meet other certain requirements.
• You’re the child or widow(er) and you are age 50 or older of someone who worked in a government job long enough where they paid Medicare taxes, and you meet Social Security disability program requirements.

Part B

If you are eligible for Part A coverage at no cost, you’re eligible to enroll in Part B coverage by paying a monthly premium.  Some people with higher incomes will pay a higher Part B premium.

If you’re not eligible for Part A at no cost, you can still buy Part B without buying Part A if you’re 65 or older and a United States citizen or a lawfully admitted noncitizen who has lived in the country for at least five years.

Part C

Part C coverage is offered by private companies, with benefits that are similar to those offered by Medicare that may provide extra coverage and lower out-of-pocket costs.  If you have Medicare Part A and Part B coverage, then you can buy Part C coverage.  Once you have reached the coverage limits that Medicare covers, you will be entitled to enhanced benefits under a Medicare Advantage Plan. Read more about part C plans here.

Part D

If you have Part A and Part B coverage, then you’re eligible to buy Part D coverage.  Part D coverage benefits are available as a stand-alone plan or they may be part of a Medicare Advantage Part C plan.  Depending your income level, this premium may be higher for some people.

How does Medicare differ from Medicaid?

People often confuse Medicare with Medicaid, so it’s important to clear up any misunderstandings about what each program is.  The main difference between the two is that Medicare is an insurance program and Medicaid is an assistance program.

Medicare helps people pay medical bills from funds they have paid over the course of their working life. For the most part, Medicare serves people 65 or older, with some exceptions for younger disabled and dialysis patients. Premiums are many times required for certain parts of Medicare. It is a federal program and is uniformly administered across the United States.

Medicaid has no age restrictions and serves people of all ages based on income. Generally, patients are not required to pay any costs for medical services, except in a few limited circumstances.  Medicaid follows federal guidelines, but it is administered by state and local governments.

What is Medigap insurance?

Medigap is a supplemental insurance policy sold by private companies that helps pay for some health care costs not covered by Original Medicare.  This can include copayments, coinsurance, and deductibles.

Unlike Medicare, Medigap policies cover medical care when you travel outside the United States.  To qualify for a Medigap policy, you must already be enrolled in Medicare Part A and Part B.

When Can You Enroll in Medicare after turning 65?

If you do not have a qualifying disability or medical condition that allows you to enroll in Medicare before you turn 65, then you can enroll in Medicare when you turn 65.

If you already get Social Security or railroad retirement benefits, you will be contacted about three months before you turn 65. If you live in one of the 50 states, Washington, D.C., the Northern Mariana Islands, American Samoa, Guam or the U.S. Virgin Islands, you will automatically be enrolled in Parts A and B. Because you have to pay a premium for Part B, you will be given the opportunity to opt out of that coverage.

If you are not already getting Social Security or railroad retirement benefits, you can enroll in Medicare during the Initial Coverage Election Period.  This will allow you to avoid paying penalties or a being subjected to a gap in your health care coverage.

The Initial Coverage Election Period is a seven-month period beginning three months before the month you turn 65 and ending three months after your 65th birthday.

It’s important to note that you can sign up for Medicare coverage even if you don’t plan on retiring when you turn 65.

You can also apply for Medicare before you turn 65 if:

• You’re a disabled widow(er) between 50 and 65.
• You work for the government and became disabled before turning 65
• You or an immediate family have permanent kidney failure
• You had Part B coverage in the past but dropped the coverage
• You turned down Medicare Part B coverage when you first got Medicare Part A coverage
• You or your spouse worked for the railroad industry.

If you don’t enroll in Medicare Part B during your initial enrollment period, you have another chance annually during a “general enrollment period” that takes place January 1 through March 31. Your coverage begins on July 1 of the year you enroll.  Be aware that you may have to pay a late enrollment penalty for as long as you have Part B coverage. Your monthly premium will go up 10% for each 12-month period you were eligible for Part B but didn’t sign up for it.

If you are in a Medicare Advantage plan and want to switch to Original Medicare, you can do so between January 1 and February 14.   If you do switch, you will also have until February 14 to join a Part D plan as well. Your coverage begins the first day of the month after your enrollment form is received.

Be prepared for an enormous amount of mail.

What kind of mail should you expect to receive?

If you are eligible for Medicare when you turn 65, you should get a “Welcome to Medicare” packet and a Medicare card in the mail from the Social Security Administration about three months before you turn 65.

If you aren’t collecting retirement benefits yet, then you’ll need to contact Social Security to apply for Medicare.  You should do this about three months before you turn 65, otherwise you will not be enrolled in Medicare in a timely manner.  After you have enrolled you will get a “Welcome to Medicare” packet that will include your Medicare card.

What do I need to know about how to use my Medicare card?

You should carry your Medicare card on you so that when you need medical services, you can produce it just like you would for other forms of insurance.  Only give your Medicare card and information to medical providers such as doctors’ offices, hospitals, pharmacists or other health care providers that you trust.  If you forget or lose your card, a health care provider may be able to look up your Medicare number and information online.

If you lose your card or can’t use it anymore because it is damaged, you can get a replacement card by providing your name, Social Security number and your date of birth to the Social Security Administration.  You can do so online by using your “my Social Security” account if you have one (if you don’t, you can also create one).

If you have a Medicare Advantage plan, you will be given a separate card that will be used for the services offered by your plan.  Be sure to present the right card when you are being treated so that the right program can be billed for services.

In April 2018, Medicare began mailing new Medicare cards to more than 57 million participants as part of a fraud and identity theft prevention strategy.  New cards do not have Social Security numbers on them.  Instead they have a unique 11-digit callout known as a Medicare Beneficiary Identifier, or MBI.  This serves as a beneficiary’s Health Insurance Claim Number (HICN) instead of the previously used Social Security number.  The deadline for replacing all Medicare cards must take place by April 2019.  There will also be a 21-month transition period that will run through December 31, 2019.  Providers will be able to use either the MBI or the HICN.

How can I enroll in Medicare?

If you are not automatically enrolled, then there are three ways to apply for Medicare Parts A and B:

• Visit Social Security’s website
• By phone. Call Social Security’s national customer hotline at 1-800-772-1213.
• In person. Visit your local Social Security office.  Use the agency’s locator tool to find the office nearest to you.

To apply for a Medicare Advantage plan (Part C or D) or a Medigap plan, you can visit the provider’s website or call the provider that offers the plan you want to buy.  You can also contact the provider and get a paper enrollment form and return it by mail.  All plans are required to offer a paper enrollment option.

How do I get more information about Medicare enrollment and programs for people turning 65.

To learn the steps you need to take to enroll in the various Medicare programs, go to www.medicare.gov.

If you have questions about Medicare, you can also call 1-800-MEDICARE (1-800-633-4227) to speak to a live customer service representative 24 hours a day, 7 days a week.  If you are hard of hearing or deaf, call Medicare’s TTY number at 1-877-485-2048.

How do I verify if I am eligible for free Medicare at age 65?

You are eligible for premium-free Part A coverage at age 65 if you or your spouse worked and paid Medicare taxes for at least 10 years.  You get premium-free Part A if you are already getting retirement benefits from Social Security or the Railroad Retirement Board or if you are eligible to get Social Security or Railroad benefits, but you have not yet filed for them.  You can also get premium-free coverage if you or your spouse had Medicare covered government employment.

Keep in mind that while many people get free Part A benefits, everyone who wants Part B coverage must pay for it. You must also pay a monthly premium for Part C and Part D coverage in addition to your Part B monthly premium.

Medicare has an eligibility and premium calculator that you can access here to see if you qualify for free Part A coverage.

Does Medicare start the month you turn 65?

If you sign up for coverage during the first three months of your Initial Enrollment Period, then your coverage starts the first day of the month you turn 65, unless your birthday is on the first day of the month.  If your birthday is on the first day of the month, your coverage starts the first day of the prior month.

If you have to buy Part A coverage, the coverage start dates are a bit different.

If you sign up for Part A (if you have to buy it) and/or Part B in this month:	Your coverage starts:
The month you turn 65	1 month after you sign up
1 month after you turn 65	2 months after you sign up
2 months after you turn 65	3 months after you sign up
3 months after you turn 65	3 months after you sign up
During the January 1–March 31 General Enrollment Period	July 1

Do I have to sign up for Medicare Part A at age 65?

No.  But if you do not sign up during the Initial Enrollment Period your health care coverage may lapse.  In addition, if you sign up at a later date, you may have to pay additional penalties for the duration of the time that you are signed up.

Do I sign up for Medicare Parts A, B, C, and D at the same time?

No, but you do need to already be signed up for Parts A and B before you can sign up for Parts C and D.

How do I shop for Medicare plans online?

You need to be careful when shopping for Medicare plans online.  Charges can vary widely from plan to plan and from market to market.  In a recent Consumer Reports article investigating Part D drug plans, the watchdog found that mistakes in the sign-up process could cost beneficiaries hundreds of dollars a year.  Their advice based on the input of an industry expert was this:

“Complicated though it may be, using the Medicare.gov tool is still the only way for you—or someone helping you—to compare Medicare plans, says Frederic Riccardi, vice president of client services for the nonprofit Medicare Rights Center, which helps people sign up for plans.”

There is a wealth of other information out there that you may also tap into as well.  The best of this may be The State Health Insurance Assistance Programs (SHIP), a national network that provides trustworthy, unbiased and one-on-one counseling and assistance for individuals and families who are seeking help with Medicare insurance plans.

Another smart move is to work with a local independent agent in your area.  In addition to being licensed to sell insurance in a specific state, an agent must also pass an annual American Health Insurance Plans (AHIP) certification exam to sell Medicare plans.  Agents are required to demonstrate specialized Medicare knowledge to pass the exam.

Are there benefits to buying a Medicare plan from a local agent?

Absolutely.

Available Medicare plans vary by market and metro area, so having a local expert working for you gives you the best opportunity to compare the pros and cons of plans that you can actually purchase.  An agent’s expertise is also further bolstered by the fact that agents who sell Medicare plans are also required to go through additional training and must get a special certification each year to be able to sell Medicare products.

Your best move is to work with an independent agent who represents many companies that sell Medicare plans in your area.  By contrast, a captive agent will only represent one or two plans, and this may be the right resource to use if you know exactly what plan you want.  You could probably track down the same information on your own, given enough time but with a lot more effort.

Using an agent means they’re doing the heavy lifting and helping you to narrow down choices efficiently so you not only save time, but money as well because you won’t be spending your hard-earned dollars on options you may not need.

Am I covered by Medicare if I travel outside of the United States?

Medicare covers beneficiaries when they are physically located in the 50 U.S. states, District of Columbia, and U.S. territories that include Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa.

In rare cases, Medicare Part A may cover medically necessary services in a foreign country when a foreign hospital is closer than a U.S. facility. You can learn about these exceptions here.

In some cases, Medicare Part B may cover medically necessary health care while on board a cruise ship within the territorial waters adjoining the U.S. Generally, Medicare won’t pay for services you get when a ship is more than six hours away from a U.S. port.  Medicare drug plans don’t cover prescription drugs you buy outside the U.S.

If you have a Medicare Advantage plan, you should check to see if it covers medical care abroad. Otherwise, it is recommended to purchase travel insurance before your trip, which can help to offset the costs of overseas emergency care if it’s needed.

A few things to know about Medicare if you’re turning 65 and still working

If you still plan to work at age 65 and beyond, your relationship and coverage by Medicare will vary depending on your employer.  At the very least, you should still enroll in Medicare Part A because it’s free and it may help cover some of the costs not covered by your employer’s group insurance plan.

You may not need to sign up for Part B right away.  This will depend on whether or not your employer’s health insurance is your primary provider or if Medicare Part B will be your primary provider.  If Medicare is your primary provider, then you should sign up for Part B immediately.  Your employer should be able to tell you who your primary provider will be.

If you continue working and don’t have an employer or union group health plan, or it is secondary to Medicare, your best bet is to sign up for Medicare Part B during your Initial Enrollment Period.

Also, just because you have some form of health insurance coverage, it does not mean you should not sign up for Part B.  For example, COBRA coverage does not count as a health insurance plan for Medicare purposes, nor does retiree or VA benefits.  Your health insurance must be from an employer where you are currently actively working.  And, if your employer has less than 20 employees, you will probably still need to sign up for Part B to make sure you have adequate health coverage.

If you’re looking for more information…

Here’s some additional resources you might want to access for more information about signing up for Medicare.

• The National Council on Aging’sMy Medicare Matters
• AARP’sMedicare Question and Answer Tool
• Consumer Reports’Guide to Get the Most Out of Medicare
• The Medicare Rights Center’sMedicare Interactive

Checklist: Things to do when you turn 65

Enrolling in Medicare is one of the most important and essential things you can do when you turn 65, but there are lots of other things to think about when you reach this milestone.

To retire or not to retire?  That is the question.  Most everything else you do plays off this critical decision.  Chances are you already know what you’re going to do but understanding what the implications are is just as important and may require you to do some homework before reaching a final decision.

Your Social Security strategy.  Do you want to retire at full retirement age or start drawing reduced benefits at an earlier age?  Or, can you want until after full retirement age (up to age 70) to draw even more benefits?

Consider downsizing.  If you haven’t done so already, consider downsizing to a smaller place to live.  Start by decluttering and be unmerciful in deciding to keep only the items that are most precious to you.  Maybe you want to live closer to your children or grandchildren, enjoy a warner climate or pay less in living expenses.  There are a number of reasons to make the move to simpler digs and now is a good time to assess your needs and desires.

Stay healthy.  It sounds obvious, but are you ready to give up smoking or limit your alcohol and food intake?  What about losing weight and exercising more?  Are you making plans to also have an active social life as well? Your body is more vulnerable as you age and to get the most out of your senior years, you must do everything you can to remain as healthy and independent for as long as possible.

Are your legal documents in order?  Do you have a will, a living trust and an advanced healthcare directive in place?  What about a designated power of attorney when you can’t make decisions for yourself?  Not having these documents in place could cost you dearly at the time you and your family need them the most.

Don’t forget about life insurance.  Do you have the right kind and right amount of life insurance for your family’s needs?  Just like going to a doctor for a check-up, you should schedule a time with your insurance agent to do a review of your coverage.

Are your retirement and pension accounts in order?  Have you allocated funds in a more conservative manner consistent with what you should be doing for your age?  Are you maximizing your catch-up contributions?  Have you thought about budgeting with the income you’re going to get in retirement?

Get a comprehensive physical.  It’s easy to let this go, especially if you don’t have any nagging or persistent health problems.  But just like a good car with a lot of miles on it, you need to take preventative steps on a regular basis to catch health issues early.

The “end-of-life” conversation.  As uncomfortable as it may be, you can actually save your spouse and your children a lot of anxiety by letting your end-of-life wishes be known before they become an issue.  Have this difficult conversation now so that you can focus on enjoying your long and happy golden years.

Don’t wait on that bucket list.  If you’ve made it to 65, you’ve earned the right to be good to yourself.  Many people who lead a frugal life find it hard to cut loose and enjoy things they have held off from doing or buying for all of their lives.  If you can afford it, take that vacation to Paris and London or buy that Corvette you always wanted.  When health problems overtake the plus-65 crowd, this can lead to a lot of regrets instead of being satisfied that they’ve led a great life with many wonderful memories.