Medicare is the federal health insurance program for Americans 65 and older. Turning 65 is one of the biggest transitions in your financial life, and most people have no idea what to do when it happens. Medicare kicks in, employer coverage rules change, and the decisions you make in a small window of time affect your healthcare costs for the rest of your life.
Here is what actually happens and what you need to do about it.
Your Initial Enrollment Period
Your Initial Enrollment Period (IEP) is a 7-month window. It starts 3 months before the month you turn 65 and ends 3 months after. This is when you sign up for Medicare Part A and Part B.
If you miss this window, you may face a late enrollment penalty on your Part B premium. That penalty is 10% for every 12 months you were eligible but did not enroll, and it lasts for the rest of your life. That is not a one-time fee. It is a permanent increase to your monthly premium.
What If You Are Still Working
If you are still employed and have health coverage through your employer (or your spouse's employer), you may be able to delay Medicare enrollment without penalty. The key factor is the size of the employer:
- 20 or more employees: Your employer coverage is primary. You can delay Medicare Part B without penalty and enroll during a Special Enrollment Period when the coverage ends.
- Fewer than 20 employees: Medicare is primary. You should enroll in Medicare at 65 even if you have employer coverage, or you risk coverage gaps and penalties.
This is one of the most common mistakes people make. Getting it wrong costs money every single month going forward.
Medicare Part A and Part B: The Basics
Part A covers hospital stays, skilled nursing (up to 100 days), hospice, and some home health care. Most people pay no premium for Part A.
Part B covers doctor visits, outpatient care, preventive services, and medical equipment. Part B has a monthly premium that is deducted from your Social Security check.
Together, Part A and Part B are called Original Medicare. They cover a lot, but they do not cover everything.
The Two Routes: Supplement vs Advantage
After enrolling in Medicare, you have a choice to make:
Route 1: Medicare Supplement (Medigap) -- Works alongside Original Medicare. You pay a higher monthly premium, but your out-of-pocket costs are lower and more predictable. You can see any doctor in the country who accepts Medicare. No network restrictions. No referrals needed.
Route 2: Medicare Advantage (Part C) -- Replaces Original Medicare. Offered by private insurance companies. Lower monthly premiums (some are $0), but higher out-of-pocket costs when you actually need care. You are limited to a network of doctors (HMO or PPO). May include extra benefits like dental and vision.
What Medicare Does Not Cover
This is where people get surprised. Medicare does not cover:
- - Dental care (routine cleanings, fillings, dentures)
- - Vision care (eye exams, glasses)
- - Hearing aids
- - Long-term care (nursing home stays beyond 100 days)
- - Care outside the United States
These gaps are real and they are expensive. A single nursing home stay after day 100 can cost $6,500 or more per month out of pocket. That is why ancillary coverage -- cancer, heart attack, stroke, skilled nursing, and hospital indemnity policies -- exists to fill these gaps.
What You Should Do Right Now
If you are within 6 months of turning 65:
- 1. Find out your exact enrollment window. Count 3 months before your birth month through 3 months after.
- 2. Check your employer coverage situation. Is the employer 20+ employees? If so, you may be able to delay. If not, enroll at 65.
- 3. Talk to an independent advisor. Not a call center. Not a mailer. An independent advisor who works with multiple carriers and can show you all your options side by side.
Frequently Asked Questions
When should I sign up for Medicare?
Your Initial Enrollment Period starts 3 months before the month you turn 65 and ends 3 months after. This is a 7-month window. Missing it can result in a permanent late enrollment penalty on your Part B premium.
Can I delay Medicare if I am still working?
If your employer has 20 or more employees, your employer coverage is primary and you can delay Medicare Part B without penalty. If the employer has fewer than 20 employees, Medicare is primary and you should enroll at 65 even if you have employer coverage.
What is the difference between Medicare Supplement and Medicare Advantage?
Medicare Supplement works alongside Original Medicare with higher premiums but lower out-of-pocket costs and no network restrictions. Medicare Advantage replaces Original Medicare with lower premiums but uses a doctor network (HMO/PPO) and may have higher costs when you need care.
What does Medicare not cover?
Medicare does not cover routine dental care, vision care, hearing aids, long-term nursing home care beyond 100 days, or care received outside the United States. These gaps can be covered with ancillary policies like cancer, heart attack, stroke, and skilled nursing coverage.
That is what I do at Chiasson Consulting. I walk people through this process every day. The consultation is free, and I shop multiple carriers to find what fits your situation.
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