The must-do steps to enroll on time, choose the right coverage, and avoid costly Medicare mistakes as you approach 65.
There are a few key steps to ensure you’re fully prepared for Medicare. I’ll break down each item on your final Medicare checklist so nothing falls through the cracks.
Why Many New Medicare Beneficiaries Stumble
Stepping into Medicare can feel like navigating a maze. Many people nearing 65 mistakenly assume everything is automatic, only to face unwelcome surprises. For instance, some miss the sign-up window and get hit with lifetime late penalties on their premiums. Others pick a plan that doesn’t cover their medications or forces them to switch doctors. Preparation is key: a bit of upfront planning can spare you from extra costs and headaches down the road. Let’s look at the critical steps you should be taking as 65 approaches.
Step 1: Enroll in Medicare on Time, Don’t Miss Your Window
Mark this as priority number one. Your Initial Enrollment Period (IEP) is a 7-month window that starts 3 months before the month you turn 65 and ends 3 months after that month.
In plain terms, if you’re turning 65, say, in June, you can sign up as early as March 1 and as late as September 30. Enrolling in Medicare Part A: hospital insurance, and Part B: medical insurance during this period is crucial. Miss it, and you’ll likely have to wait until the General Enrollment Period by Jan 1 – Mar 31 each year to sign up, which could mean a gap in coverage and a 10% Part B premium penalty for each year you delayed.
Now, there are some exceptions if you’re still working and have employer coverage, but more on that in a moment. The bottom line: put your IEP dates on the calendar and get enrolled to avoid needless fees or delays.
Step 2: Decide Between Original Medicare and Medicare Advantage
Next, it’s decision time. You have two main ways to get Medicare coverage: Original Medicare or a Medicare Advantage plan. Understanding their differences will help you choose confidently.
Original Medicare Parts A & B is the traditional government program: you can visit any doctor or hospital nationwide that accepts Medicare , and the government pays its share of approved costs. However, under Original Medicare you’ll typically pay a 20% coinsurance for outpatient services. That, and there’s no annual limit on what you might spend out-of-pocket for Part B. This means that a serious health issue could result in significant costs. Which is where supplemental coverage comes in. We’ll cover that in Step 3.
Medicare Advantage Part C by contrast, is offered by private insurance companies. These plans bundle Part A, Part B, and usually Part D: drug coverage together. Advantage plans often have lower out-of-pocket costs for routine care and they cap your annual expenses for Part A and B services. It’s like a built-in safety net which Original Medicare lacks.
Many plans also include extras like dental, vision, or gym memberships. The trade-off? You generally need to use the plan’s network of doctors and hospitals for non-emergency care. And you may need referrals or plan approval for certain specialists or procedures.
Which to choose?
Consider your priorities: flexibility vs. simplicity, choice of providers vs. all-in-one convenience.
- If you split your time in different states or have favorite doctors, Original Medicare + Medigap might suit you.
- If you prefer predictable co-pays and extra benefits, a local Medicare Advantage HMO or PPO could be attractive.
Take time to compare available plans in your area, and remember, you aren’t locked in forever. You can switch coverage later during Medicare’s annual Open Enrollment during Oct 15 – Dec 7 if your needs change.
Step 3: Cover the Gaps: Medigap Supplement Insurance
If you opt to stay with Original Medicare, you’ll notice it doesn’t cover everything. That 20% coinsurance on Part B services never stops: there is no out-of-pocket maximum. For example, expensive treatments like chemotherapy or frequent outpatient therapy could leave you with hefty bills, since Original Medicare alone will just keep charging you 20% of each service indefinitely.
Medicare Supplement Insurance, also known as Medigap, is designed to fill these gaps. These plans are sold by private insurers and can cover costs like your Part B coinsurance, deductibles, and more, depending on the plan type like Plan G, Plan N, etc.
The best time to buy a Medigap policy is during your Medigap Open Enrollment Period. This is the 6-month window that starts when you’re 65 and have Part B. During this period, you have a guaranteed right to buy any Medigap plan available in your state, regardless of health conditions. In other words, the insurance company can’t charge you extra or deny coverage due to pre-existing issues during this one-time window.
After 6 months, you might have to go through medical underwriting or could even be turned down, so don’t sleep on this if you want a Medigap.
Action item: Review the Medigap plans. They’re standardized by letter, A through N, and consider your budget and coverage needs. Medigap requires an extra monthly premium, but it can provide priceless peace of mind by virtually eliminating surprise medical bills.
Step 4: Don’t Forget Prescription Drug Coverage (Part D)
Prescription medications are a big part of healthcare for many seniors. Original Medicare does not cover most outpatient prescriptions, so you’ll need to enroll in a Part D drug plan unless you have other creditable drug coverage like from an employer or retiree plan. If you chose a Medicare Advantage plan, double-check whether it includes Part D. Now, most do, but a few specialized plan types do not. Either way, ensure you have drug coverage in place when you start Medicare.
The reason isn’t just to help pay for your medications. It’s also to avoid the Part D late enrollment penalty. This penalty is an extra 1% of the national base premium for every month you go without Part D or other qualifying drug coverage. And yes, that penalty stacks up and generally stays with you for life once it applies. The good news: Part D plans are easy to sign up for, and many have affordable premiums with some under $20 a month. Even if you currently take no prescriptions, consider choosing the least expensive plan just to stay covered. Future-you and your wallet will thank you.
If you made it this far, you may want to consider speaking with me, a Licensed Retirement Specialist.
I just covered a lot and you might be thinking, “Wow, there’s a lot to do for Medicare!” Don’t worry.
This final checklist is doable, and you don’t have to do it alone.
If you’re unsure about any of these steps or want personal guidance in choosing the right plan, feel free to reach out to me. As a licensed Medicare advisor, I’ve helped many people like you make sense of Medicare rules, compare plan options, and enroll with confidence.
