Medicare Basics – What You Need to Know

• At age 65, you become eligible for Medicare.
• If you are already receiving Social Security Benefits, you’ll automatically be enrolled into Medicare.
• If you are not receiving Social Security Benefits, you’ll need to enroll in Medicare.
• If you are still working and your company has 20 or more employees, you are not required to enroll in Medicare and no Late Enrollment Penalty will be assessed.
• If you are still working working and your company has less than 20 employees, you are required to enroll in Medicare Part A (Hospitalization) and Part B (Medical).
• If you are required to enroll in Medicare, when you are first eligible, but you don’t, you will be assessed a Late Enrollment Penalty, when you eventually do enroll.
• The Late Enrollment Penalty applies to Part A, B & D (Prescription Drug Plan).
• The Late Enrollment Penalty for Part A & B is 10% for each 12 month late enrollment period (.83% per month). This Penalty keeps increasing until you enroll.
• The Late Enrollment Penalty is Permanent, meaning you will forever pay more for Medicare, if you enroll late.
• The Late Enrollment Penalty starts after a 63 day Late Grace Period.
• The Late Enrollment Penalty for Part D is 1% per month. This too is Permanent.
• Enrollment Deadlines:
  • 3 Months Before you turn 65, you may enroll
  • 4 Months After you turn 65, you may enroll.
• General Enrollment Period for Part A and B is January 1 – March 31 of every year. This applies if you missed your Initial Enrollment Period (3 months before turning 65 and 4 months after turning 65), meaning, you have to wait until January 1 to enroll in Medicare Part A and Part B, and Permanently Incur a Late Enrollment Penalty.
• Medicare Advantage Supplemental Plans, also known as Part C, is a separate medical plan that covers what Medicare Part A and B do not cover. Private Medical Insurers provide these plans.
• Medicare Advantage Open Enrollment begins October 15 and ends December 7 of every year.
• Medicare Part A – Hospitalization Coverage.
• Medicare Part B – Medical Coverage.
• Medicare Part C – Optional Medicare Advantage Supplemental Plans,
• Medicare Part D – Prescription Coverage.

Tom Corley is an accountant, financial planner and author of “Rich Kids: How to Raise Our Children to Be Happy and Successful in Life”, Effort-Less Wealth, Change Your Habits Change Your Life, Rich Habits Poor Habits and “Rich Habits: The Daily Success Habits of Wealthy Individuals.”