Money Matters

Sorting out when to apply for Medicare Part A and Part B

June 30, 2012 

Q. I will turn 65 in August, and I am still fully employed, paid, and have full-bore health insurance with my company, as does my wife, who will turn 65 in December, under the same insurance. Given what I had read, seen on the Internet, etc., I expected to have to sign up for Medicare B around my birthday, but I called the Medicare 800 number to confirm the process, and was told that as long as I am employed full-time and have insurance, I do NOT need to sign up for Medicare B, and may, at my discretion, sign up for Medicare A, which I was told is free, but has no effect on part B or drug coverage. And the drug coverage “penalty” for not signing up for part D only kicks in when I sign up for part B, not on my 65th birthday.

My company, on the other hand, has told me that I am expected to enroll in part B when I turn 65, and my current coverage would be modified as supplemental insurance. My current drug plan is fully qualified, so that wouldn’t be an issue, but these apparently conflicting opinions lead me to believe neither of these “opinions” are entirely accurate. Can you clarify this in your column, please?

A. Medicare Part A is hospital insurance and in most cases Part A is free. In most cases it makes sense to take Part A even if you are still working at age 65 and covered by an employer medical plan. Part B helps pay for doctor’s services and many other medical services and supplies not covered by the hospital insurance. Part B will cost you, and if you are age 65 or over, eligible for Medicare and have insurance through you or your spouse’s current employment you may not need Part B. According to the Social Security representative I spoke with and, as stated on the website, “Group health plans of employers with 20 or more employees are required by law to offer workers and their spouses who are age 65 or older the same health benefits that are provided to younger employees.” I deleted the name of your company but it is definitely a company with more than 20 employees. This should mean that your employer coverage is primary and Medicare Part B is secondary. Primary insurers pay first and secondary insurers pay all or some of the unpaid portion of covered expenses only after the primary insurer has paid.

Ask your human resources department how your plan works with Medicare. I called them but they would not discuss any information with me no matter how general. If they tell you it becomes secondary once you are Medicare-eligible, I agree that this seems to be in conflict with the above Social Security quote. I have my law degree but don’t practice, and there could be a way your employer insurance plan is allowed to operate differently once you are eligible for Medicare.

If your employer coverage becomes secondary, you will want to apply for Part B. If it remains primary you need to determine if the increase coverage with Part B is worth the added cost of the premium. If you are 65 or older with current employment and covered under a group plan (yours or your spouse’s), you also have a special enrollment period for Part B. You can enroll at any time while covered and currently employed or during the eight-month period that begins after your group coverage ends or employment ends, whichever comes first. If not employed and covered by a plan, if you delay enrollment in Part B beyond 7 months of eligibility for Part A your monthly premium will increase 10 percent for each 12-month period you were eligible for, but did not enroll in, Part B. If you are eligible for Part A at age 65, your initial enrollment period begins three months before your 65th birthday. Enrollment beyond three months after the month you turn 65 will result in a delay in coverage and higher premiums.

Holly Nicholson is a certified financial planner in Raleigh. She cannot answer every question. Reach her at or P.O. Box 99466, Raleigh, NC 27624

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