Over 65 and Still Working: What About Medicare?

you must sign up for Part B within 7 months, or face penalties for the rest of your life.
This is harsh.

Medicare. Mind the gap. There are really crazy rules about transitioning to Medicare. Perhaps the craziest is that if you're on a COBRA plan it doesn't count as having insurance. Thee are also silly rules about timing your retirement.

Jeff, the penalty does sound harsh. But I think it makes sense. The analogy is that you can't insure your house after it catches fire (at least the one that burned down). If people wait to be insured until they get sick insurance doesn't work; it relies on a big pool to cover the costs for the small number that need it. The penalty isn't huge unless you wait years and years. It is 10% of the premium per month. That would be $17.10/per month extra for most people who delay one year.
See https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-late-enrollment-penalty
Bottom line: Super important to sign up for Part B on time!
Stephen: You have 8 months to sign up for Medicare whether or not you choose COBRA, after that you face a penalty when you sign up. Medicare becomes primary coverage even if you have COBRA.
https://www.medicare.gov/supplements-other-insurance/how-medicare-works-with-other-insurance/cobra-7-important-facts

My mother who was always independent and took care of all her expenses, her banking, insurance etc. was lucky enough to be healthy and had taken very few prescription drugs, except for an antibiotic when necessary. So when she applied for Medicare back in the 90's she skipped the Part D prescription drug coverage. As she reached her mid-80's and allowed us to help with her paperwork, I called Medicare to ask about the extra charge she was paying every month and they explained it was her penalty for not having Part D for over 40 months. When I asked how long she would pay it, I was told until she dies or gets on Medicaid. So she paid that fee monthly for many many years. Too bad there was no Topretirements.com back then and all the great Medicare resources and explanations. I will admit I studied the information on this site as much as I did the Medicare site when it was time for me to apply. Thanks.

I have full medical, prescription, dental and eye coverage through my husband's employer. I took my Social Security at age 62 when I retired so at 65 I was automatically sent a Medicare card for both Part A and B. After consulting with two Medicare Advisors and researching the Medicare site - I was advised to drop Part B which I did. But this turn off step was not easy as phone calls to our local Social Security office insisted I would be penalized. Their information totally conflicted with the Medicare website and what the Medicare Advisors told me. No wonder people get so confused.
Plus, Medicare Part D does not cover one of my prescriptions. I have far better medical coverage with my husband's employer healthcare plans which is my Primary coverage. When he retires we will get all the necessary documents from HR and I will apply for the additional Medicare plans. Then we will see if they give me a hard time and try to penalize me.

My husband and I have lived in Canada for 20 years. We hope to retire to the US next year at ages 68 and 69. Don't plan to take SS until age 70. An advisor told us to sign up for Part A Medicare when we turned 65. So we did. But did not sign up for Part B because of expense and we couldn't use it up here anyway. We have the government health insurance and a good supplemental plan for vision, dental, and prescription through my husband's job. We're hoping they won't charge us penalties when we return to US next year.

I volunteer for an organization (SHINE) that helps people with Medicare sign-up, applying for low income options etc. We recently have helped two different people who are in your situation. They both live in Canada and only have part A and now want to retire in US. They are both retired and according to Social Security they will have to pay a Part B penalty for every full year they were eligible for Part B. If they were still working, their Canadian insurance would have qualified as "creditable coverage". I think it was the same for Part D (drug plan coverage) although that penalty is only 1% of the average premium for every month that you were eligible and did not have that coverage.
You need to get in touch with SS to confirm what I am telling you and see how soon you can sign up for B because that is another issue. You may have to sign up during the general enrollment period and that only runs from January through March for a start in July. So for 2022 that enrollment period is closed.
Look on MedicareInteractive.org -they have a good article about this issue.
Roberta

Medicare it certainly seems to be the biggest hurdle for anyone retiring. I've been reading about those being penalized for not signing for some/all parts when turning 65. Damn doesn't seem to be a straight forward sign for this part not this etc. Even folks seeking advise from SS or other knowledgeable folks you don't get the same answer. I worked for State gov, I didn't retire at 65 but did sign for Medicare for parts A & B though did not start paying until I actually retired almost a year later, I took my State ins. with me which became my secondary & covered my husband also & my State covered a drug plan which was better than SS. Again I was not penalized for anything. Why can't it be black & white what you need to do, what happens if you do or don't! And for pete's sake seems everyone gets different answers, how is anyone to know what they are suppose to do. Sorry I just needed to vent. I've never had problems, but I certainly feel for those trying to make decisions in what should be an exciting time for their life.

Thank you Roberta. I did hear about SHINE and I will contact them once I know where we will live.
CAM

Not sure if this has been covered but it would be beneficial if admin would cover travel outside the USA while being insured by Medicare. Many retirees want to travel but have they considered what might happen if they get sick while in another country. I have done a little investigating and it appears Medicare will not cover a hospital stay in a foreign country unless certain limited exceptions are met. Such as a cruise to Alaska and being 6 hours away from a Canadian Hospital. You might be covered if you are in a US territory. It would be interesting to find out what some seniors encountered if they, family member or friend was hospitalized while on vacation in a foreign country. What did they do if Medicare didn't pay for their hospital stay? I personally have an opportunity to travel to the Caribbean but even though I am in good health, no one knows when sudden illness will hit a person. US Virgin Islands is territory of the USA so it might be safe to vacation there. But that is not where I wish to go to. Will Medigap policies offer any help paying hospital bills? Does Medicare Advantage pay hospital bills? Is there some kind of travel insurance we can buy for a week's vacation?
It is very scary to think you could go broke by needing hospitalization in a foreign country because Medicare won't pay.
Admin, please do an article on Medicare and travel to foreign countries and what to expect.

I thought Medicare/Medicaid was strictly a U.S. service = and not a very good service! I buy additional trip insurance when I travel outside of the country. It provides a translator - should one be needed, health care and supervised transport back to the USA should that be needed. I would be very hesitant to travel and only rely on Medicare. It is a great conversation to have, and I am looking forward to seeing the responses. Thanks for opening the dialog, Louise!

Lynne, can you elaborate on the insurance you buy and the approximate cost per person and the amount of time covered. Do different countries cost different amounts?

For my upcoming trip, I am using Allianze Global. Cost is approx. around 10% of total trip and lasts for 1 year from date of purchase. Lots of different options and cost levels. I do not know if the cost for other countries is more than a Continental trip. I have only used trip insurance when going to Europe. There are many different carriers, and I have used several over the years. It takes time to wade through the options and caveats, so pack your patience.

For the most part Medicare is not available outside of the U.S. But as Lynne points out you can buy health insurance in the countries you want to live in or visit. In most countries medical care is much less expensive than in the U.S. and often as good or even superior, so you might not need it. Many people opt for medical insurance that includes the price of evacuation back to the U.S, which can be frightfully expensive. Having any kind of help negotiating a strange system might be useful, such as a translator. An elderly friend of ours had to go the hospital in Japan; even with our other friend, a physician accompanying him, it was a bewildering experience.
One estimate is that travel medical insurance might cost about 5-6% of the cost of your trip. There are all kinds of plans available with different limits and coverages. Allianz is one. If you search the web for travel insurance you will see many choices. Rates are often based on your age and medical history, along with where you are going.

Medical tourism isn't really what I am talking about. Medical tourism is planning to go to another country to have a voluntary planned procedure with the hopes of saving money.
What I am talking about it is going to a foreign country and having a serious unplanned illness like a heart attack, a stroke, car accident with a broken hip or some other devastating medical event that requires hospitalization and possibly surgery and tons of medical tests. It might be cheaper but still could run $100,000 to $200,000. Not many people have that kind of money or even enough of a credit line on a credit card.
Travel insurance can be purchased thru a travel agent but if you make your own travel plans, what companies offer it?

From Medicare.gov: https://www.medicare.gov/Pubs/pdf/11037-Medicare-Coverage-Outside-United-States.pdf

Triple AAA offers various travel insurance policies. Prices will vary widely depending on where you are going, length of trip, etc. We also cruise a lot and always buy the insurance that covers the entire cruise. It's relatively inexpensive through each cruise line. Have had friends use the insurance. It also covers everything if something happens while you are on land in a port.

For what it’s worth, My AARP Pt G insurance with United Healthcare is about $156/mo on top of Medicare Pts A & B, and includes $50K (lifetime limit) of medical coverage outside of the country. Note that the cost of medigap plans does vary by state, as I learned when I changed states upon retirement. Also — Pt D plans can vary widely in cost & coverage. My $53/mo Part D plan has been fine. At the end of the day, my cost for Pts A, B, G, D, VSP vision and MetLife dental (same plans I had when working) are still less than my employee monthly co-pay with a big corporation!! Plus my employee deductible was $5k, so I am actually doing better now…except for traveling out of the US (sigh). I have been buying travel insurance with trips, but the cost for good travel coverage has really been climbing thanks to Covid. Travel agents seem to push one or two companies that aren’t necessarily great for medical coverage. It can pay to shop around.

Thanks to the comments about Medicare's travel limitations. I had no idea! When looking up my coverage I learned that my Kaiser Medicare Advantage plan covers emergency care and urgent care worldwide. No monthly premium beyond the standard $170.10 for Medicare Part B.
Since my next trip is to Toronto, Canada, I won't bother with travel medical insurance this time, but will definitely keep it in mind for my next cruise or travel farther from home.
Appreciate the tips, Top Retirement friends!

Kate, I also have AARP Insurance, but I have Part F. I see it also covers $50,000 lifetime limit. I personally don't feel very comfortable travelling knowing if I was stricken with a serious illness, while out of country, that was all the coverage I had. I don't think $50,000 goes very far these days for hospitalization and testing. I know foreign medical care is less expensive, but we really have no idea until disaster strikes, and it is too late. That is one thing about medicine and some car repairs. We never know what it will cost till we get the bill.