Turning 65? What to Know About the 4 Parts of Medicare

The first of the 78 million baby boomers turned 65 on January 1, 2011, and some 10,000 boomers a day will reportedly reach that milestone between now and 2030. If you are about to turn 65, be certain to take some time to think about Medicare.

You become eligible for Medicare at age 65, and delaying your enrollment can result in penalties, so it is important to act right away.

Medicare Parts A, B, C, and D

Numerous options are available to consider when signing up for Medicare. Medicare consists of four major programs, each of which pertains to different types of covered services:

• Part A covers hospital stays, your first 20 days in a skilled nursing facility, and some home hospice care
• Part B covers physician fees that may include doctor visits or telehealth appointments
• Part C permits Medicare enrollees to receive their medical care from among a number of delivery options
• With Part D, prescription drug coverage is the focus

In addition, Medigap policies offer additional coverage to individuals enrolled in Parts A and B. 

Enrolling in Medicare

Medicare enrollment begins three months before your 65th birthday and continues for a total of seven months. If you are currently receiving Social Security benefits, you don't need to do anything. You will become an enrollee in Medicare Parts A and B effective the month you turn 65.

If you do not receive Social Security benefits, then you will need to sign up for Medicare. You can contact the Social Security Administration to do this by calling at 800-772-1213 or visiting the SSA website. Take care of this as early as possible so your coverage begins as soon as you turn 65. 

Medicare When You Are Not Yet Retired

If you are still working and have an employer or union group health insurance plan, it is possible you do not need to sign up for Medicare Part B right away. You will need to ask your employer whether the employer's plan is the primary insurer. If Medicare, rather than the employer's plan, is the primary insurer, then you will still need to enroll in Part B.

Even if you aren't going to sign up for Part B, you should still enroll in Medicare Part A, which may help pay some of the costs not covered by your group health plan. Any person who reaches age 65 and is entitled to Social Security benefits qualifies for Medicare Part A without charge. (People who do not qualify for free Medicare Part A can buy an Affordable Care Act plan when they turn 65.) 

Learn more about Medicare coverage while continuing to work.

More on Medicare Part B

You may not have an employer or union group health insurance plan. Or, that plan may be secondary to Medicare. If so, it is extremely important to enroll in Medicare Part B during your initial enrollment period.

Note that COBRA coverage does not count as a health insurance plan for Medicare purposes (Learn more about this). Neither does retiree coverage or VA benefits. 

Just because you have some type of health insurance doesn't mean you don't have to sign up for Medicare Part B. The health insurance must be from an employer where you actively work. Even then, if the employer has fewer than 20 employees, you will likely have to sign up for Part B.

If you do not sign up for Part B right away, then you will incur a penalty. Your Medicare Part B premium may go up 10 percent for each 12-month period that you could have had Medicare Part B, but did not take it. In addition, you will have to wait for the general enrollment period to enroll. The general enrollment period usually runs between January 1 and March 31 of each year.

Even if you are postponing enrollment in Part B because your current coverage is primary, it's a good idea to inform Medicare of your decision so you don't risk incurring premium penalties later. 

With all the deductibles, copayments and coverage exclusions, Medicare pays for only about half of your medical costs. Much of the balance not covered by Medicare can be covered by purchasing a so-called “Medigap” insurance policy from a private insurer. You can search online for a Medigap policy in your area.

Medicare Part C, or Medicare Advantage

Medicare also offers Medicare Part C, or Medicare Advantage. You must enroll in Medicare Parts A and B to join a Medicare Advantage plan. (Medicare Advantage is the name for private health plans that operate under the Medicare program.)

If you join a Medicare Advantage Plan, the plan will provide all of your Part A and Part B coverage. It also may offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs. Most such plans include Medicare prescription drug coverage. 

Medicare Prescription Drug Coverage: Part D

Finally, Medicare offers prescription drug coverage under Medicare Part D. If you are not going to sign up for a Medicare Advantage plan with prescription drug coverage, then you will want to enroll in a prescription drug plan at the same time you enroll in Parts A and B. For every month you delay enrollment past the initial enrollment period, your Medicare Part D premium will increase at least 1 percent.

You are exempt from these penalties if you did not enroll because you had drug coverage from a private insurer, such as through a retirement plan, at least as good as Medicare's. This is called “creditable coverage”; your insurer should let you know if their coverage will be considered creditable.

Visit the Medicare website to find a drug plan in your area. 

After you've signed up for Medicare Part B, you can schedule a free “Welcome to Medicare” exam with your doctor.

For more help with the decisions involved in signing up for Medicare, try these resources:

• The National Council on Aging’s AgeWell Planner
• AARP's Medicare Question and Answer Tool
• Consumer Reports’ The Pros and Cons of Medicare Advantage
• The Medicare Rights Center’s Medicare Interactive