Millions of older Americans today get health coverage through Medicare. And if you're gearing up to enroll, you may be looking forward to the benefits you're entitled to as part of the program.
But Medicare has a lot of rules, and some are less well-known than others. With that in mind, here are three things you should be aware of if your time to sign up for Medicare is getting close.
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1. You may not have to enroll right away
Your initial Medicare enrollment window spans seven months. It begins three months before the month of your 65th birthday, and it ends three months after that month.
Signing up for Medicare late could mean facing lifelong surcharges for Part B coverage, so that's not ideal. But you also don't want to sign up for Medicare too early -- such as when you have a fantastic group health plan through your job that costs less than Medicare.
You should know that if you're on a group health plan with 20 or more employees, that generally entitles you to a special enrollment period from Medicare that begins once your group health coverage ends. So if you're not ready to sign up for Medicare during your initial enrollment period, you may not have to. And to be clear, if you get a special enrollment period, it means you won't have to worry about Part B surcharges for missing your initial enrollment period.
Another thing you should know that is because Medicare Part A usually doesn't charge enrollees a premium, it could pay to sign up for Part A alone even if you have group health coverage at the time of your initial enrollment window. That way, Part A can serve as secondary health insurance.
2. You may not have all of your services covered
If you're on employer health insurance, then you may be used to having all of your medical needs covered, including dental care, eye exams, and new eyeglasses. But you should know that Medicare does not pay for these services. Medicare also won't pay for hearing aids, which are a fairly common expense for older people.
It's important to read up on Medicare to see what is and isn't covered so you can sign up strategically. One option, for example, is to choose a Medicare Advantage plan over original Medicare. Advantage plans commonly offer supplemental benefits like dental and eye care that could leave you paying less all in.
3. You might have to stop funding your HSA sooner than expected
Contributing to a health savings account, or HSA, is a smart thing to do. HSAs are loaded with tax breaks, and carrying a balance with you into retirement could make healthcare much easier to pay for later in life.
But you should know that once you enroll in Medicare, you can no longer contribute money to an HSA. You can take withdrawals to cover qualifying expenses, but you can't add to your balance.
You should also know that if you're enrolling in Medicare past age 65, you may need to stop making HSA contributions six months ahead of your enrollment date. You're entitled to retroactive Medicare coverage dating back to your 65th birthday. So if you're enrolling at 66, your best bet is to stop funding your HSA at age 65 1/2.
Medicare is full of different rules, and it can be tricky to keep track of them all. But at the very least, keep these important points in mind so you don't hit any snags.
