Signing up for Medicare is something many older Americans rush to do as soon as they're able to. But you may have your reasons for delaying your Medicare enrollment. Unfortunately, they may come back to haunt you.
Not only does waiting too long to sign up for Medicare put you at risk of a gap in health insurance coverage, but it could also mean getting stuck with more expensive premiums for life. Let's review how Medicare enrollment works so you don't fall into that trap.
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What your initial Medicare enrollment period looks like
Your initial Medicare enrollment window spans seven months. It begins three months before the month you turn 65 and ends three months after that month.
During that initial enrollment window, you can sign up for Medicare Part A, which covers hospital care, and Part B, which covers outpatient care. You can also choose to enroll in a Medicare Advantage plan or a Part D prescription drug plan to go along with Parts A and B.
If you're receiving Social Security benefits at the time of your initial Medicare enrollment window, you'll be signed up for Parts A and B automatically. Otherwise, you have to actively sign up on your own.
The cost of missing the deadline
If you don't sign up for Medicare during your initial enrollment window, you'll have other opportunities to do so in the future. But the problem with missing that initial enrollment window is that it could leave you on the hook for surcharges on your Medicare premiums for life.
For Medicare Part B, you'll face a 10% surcharge on your premiums per 12-month period you were eligible for coverage but didn't enroll. For Medicare Part D, you'll face surcharges if you go 63 days or more without creditable drug coverage after your initial enrollment period ends.
Now you should know that if you're still working and covered by a qualifying group health plan during your initial Medicare enrollment window, you can generally avoid these penalties if you sign up during the special enrollment period you get due to these circumstances. But if you're not eligible for a special enrollment period, waiting on Medicare could end up being a costly mistake.
Know when you're supposed to sign up
You might think delaying your Medicare enrollment is no big deal. Clearly, that's not the case. Pay attention to when your initial enrollment period takes place so you don't make a mistake you end up regretting.
