Why You Should Sign Up For Medicare When You Are 65

By Jeffrey Levine, IRA Technical Expert
Follow Me on Twitter: @theslottreport

One of the most common questions asked by people approaching their mid 60’s is, “When do I have to sign up for Medicare?” For most people, the short answer is, “when you turn 65.”

If you do not currently have health insurance, are covered by a retiree plan, have an individual policy or are covered by a small employer group plan, you should enroll in Medicare when you turn 65. This is called the initial enrollment period. The initial enrollment period actually begins 3 months before you turn 65 and lasts for 7 months.

You can sign up for Medicare at any point during the initial enrollment period without incurring a penalty, but you’ll want to make sure to sign up during the first three months. Doing so will allow your Medicare coverage to begin on the first day of the month you turn 65. If you sign up later in the initial enrollment period, you won’t be subject to a penalty, but you will have a gap in your coverage.

While most people should enroll in Medicare during the initial enrollment period, there are some exceptions. If, for instance, either you or your spouse are still working and your/their current employer offers group health insurance to 20 or more people, you can keep your group health insurance coverage until you/your spouse retires. At that time, you’ll need to enroll in Medicare during what’s known as the special enrollment period. In order to prevent gaps in your health coverage, you should sign up for Medicare before your/your spouse’s group coverage terminates.

So what happens if you miss your appropriate (initial or special) enrollment period? In such cases, you’ll have to enroll in Medicare during the general enrollment period. The general enrollment period runs annually from January 1 through March 31. If you sign up for Medicare during this window, your Medicare coverage will start on July 1later that year. Using the general enrollment period to sign up for Medicare is typically something you’ll want to avoid. Chances are you will have significant gaps in healthcare coverage, and it could lead to penalties that can last for life… yes, life!

It’s also important to remember that enrolling for Medicare does not mean that you need to receive and/or file for your Social Security benefits. Consequently, even if you’re planning on delaying receiving your Social Security benefits beyond 65 – which is often a wise choice – you still need to make sure you’re timely enrolling in Medicare. So as you approach your mid 60’s, take some time to make sure you know exactly when you should sign for Medicare to make sure you have continuous healthcare coverage and don’t end up wasting money on preventable penalties.