Some people look forward to turning 65 so they can enroll in Medicare. And you can actually sign up a bit ahead of your 65th birthday to ensure your coverage is in place.
Your initial Medicare enrollment window starts three months before the month you turn 65 and ends three months after that month. But you may not get around to enrolling in Medicare on time. That's a mistake that could cost you, though, and not just in the context of delayed health coverage.
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Missing your enrollment window could trigger lifetime penalties
Delaying Medicare enrollment puts you at risk of going without health insurance if you don't have coverage already. But beyond that, if you sign up late, you risk a lifelong surcharge on your premiums.
Though most Medicare enrollees don't pay a premium for Part A, which covers hospital care, there are monthly premiums associated with Part B, which covers outpatient care. If you wait too long to sign up for Medicare, you could risk a 10% surcharge on your Part B premiums for each 12-month period you were eligible for that coverage and did not enroll.
Medicare Part D also has a penalty structure for late enrollments. If you go more than 63 days without creditable drug coverage, you risk surcharges on your plan premiums as well. These costs could really add up over time.
Know when you have to enroll immediately and when you can wait
If you're still working at age 65, you may be inclined to delay your Medicare enrollment if you have health coverage through your job. In many cases, that's fine.
But you need to make sure you have qualifying coverage for a special enrollment period. That typically applies if your workplace health plan has 20 or more employees on it.
If you qualify for a special enrollment period and don't sign up for Medicare during your initial enrollment window, you won't face the aforementioned penalties provided you sign up before that special enrollment period ends. But if you don't qualify for a special enrollment period, it's important to sign up for Medicare on time.
Remember, people who are signed up for Medicare and Social Security pay their Part B premiums out of their monthly benefits. If you're forced to pay more for Part B, it'll whittle down your Social Security checks. So make sure you're on top of your enrollment dates. And if you're inclined to delay, make absolutely certain you qualify for a special enrollment period first.
