1. Turning 65:
When turning 65, Medicare provides for an Initial Enrollment Period whereby 3 months before your birthday, the month of your birthday, and the three months after your birthday, you may choose to enroll in a Medicare plan. However, before you can enroll in any Medicare Plan, you must have applied for and obtained a Medicare card with Part A and B. If you are already drawing Social Security, you will automatically receive it when you turn 65. If you are not drawing Social Security, you can go to the Social Security office to apply or go online to Medicare.gov. In 2013 the typical cost for Part B is $104.90 for individual persons with a yearly income in 2011 of $85,000 or less and if filing a joint tax return, an income of $170,000 or less. This amount is calculated on a sliding scale based on your modified adjusted gross income on your tax return from 2 years ago. Depending on your adjusted gross income, the amount you pay for part B can change each year. Part B is a monthly cost in addition to the premium for your Medicare Plan of choice.
2. Should I take Part B?
If you or your spouse are still employed and have hospitalization coverage through that employer, you will typically not need to purchase Part B until you leave the employer plan. You are then entitled to a Special Election Period to choose a Medicare Plan. If you are not on an employer’s health plan and simply decide not to enroll when you turn 65, you will have a certain time between January 1 – March 31 to get signed up and choose a plan. This is called the General Enrollment Period and you will have an effective date of Julylst. If you do not sign up for Part B when first eligible, you will pay a late enrollment penalty for as long as you have Medicare. The cost of this penalty may increase your premium up 10% for each full 12 month period that you could have had Part B, but did not sign up for it. So in other words, you will pay the additional penalty plus your Part B premium each month. Again, the exception to this rule is if you are on an employer health plan.