Although many seniors find that their general expenses decrease in retirement, healthcare is one cost that tends to rise. That's because health issues tend to increase with age, and often, additional screening tests become necessary.
The good news is that many workers are eligible for health coverage under Medicare. But surprisingly, 55% of near-retirees say it will be difficult to sign up for Medicare once the time comes, according to a recent Fidelity survey.
If you feel the same, here are a few things to know about Medicare enrollment.
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1. When your initial enrollment window takes place
You can begin getting coverage under Medicare once you turn 65. But your initial enrollment window starts before your 65th birthday, so you can get the ball rolling ahead of that milestone.
You actually get a seven-month period to sign up for Medicare initially. It begins three months before the month of your 65th birthday and ends three months after that month.
You can sign up for Medicare online through the Social Security Administration's website. However, rest assured that you don't have to file for Social Security benefits in conjunction with your Medicare enrollment.
While Medicare eligibility begins at 65, the full retirement age for Social Security isn't until 67 for those born in 1960 or later. Full retirement age is when you're able to collect your full monthly Social Security benefit, based on your personal income history. If you don't need your benefits just yet, you may want to only sign up for Medicare at 65 and wait on Social Security to avoid a reduction in your monthly payments.
2. What happens if you sign up late
If you don't sign up for Medicare during your initial enrollment window, you can sign up during general enrollment, which runs from Jan. 1 though March 31 every year. But signing up late for Medicare will cost you.
For each 12-month period you're eligible for coverage but don't enroll, you'll face a 10% surcharge on your Part B premiums -- for life. Plus, you risk going without health insurance, which could lead to horrendously high costs if you get injured or fall ill.
3. Whether you're entitled to a special enrollment period
The above seven-month initial Medicare enrollment period is one you should stick to if you want to avoid lifelong Part B surcharges -- unless you qualify for a special enrollment period. That generally happens if you have qualifying group coverage at the time, which means being on a plan of 20 employees or more.
If you qualify for a special enrollment period, it would begin the month after you separate from your employer or your group health plan coverage ends, and last for eight months. If you enroll in Medicare at that point, you won't have to worry about lifelong surcharges.
There's a lot to know about Medicare, and some of that information can be confusing. So don't wait until you're on the cusp of turning 65 to learn more about it. Instead, start getting educated now so you can feel more confident about enrolling.
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