As your 65th birthday nears, you and your clients may encounter a flood of information (and misinformation) about Medicare. Flyers will show up in your mailbox from marketers looking to sell you a plan. You might try reaching out to your company’s HR department if you’re still working, but they won’t always have the full picture. Or you might talk to a friend who’s also turning 65, but find their situation is entirely different than yours. With all these competing sources of info, it’s hard to cut through the noise and find what’s right for you.

So with that in mind, let’s take a look at some of the factors that go into deciding when to enroll in Medicare.

Part A, Part B And Medicare Premiums
Enrolling in Medicare is not an all or nothing decision. To understand the options, let’s break down the different parts of Medicare. Medicare Part A covers hospitalization and inpatient medical services, at no cost to you, as long as you have worked a minimum of 40 quarters, or 10 years, over your lifetime. Medicare Part B covers doctor visits and outpatient medical services. 

The base monthly premium in 2023 for Medicare Part B is $164.90. If you fall into a higher-income bracket, you would be subject to IRMAA, or an income-related monthly adjustment amount, and that could drive up your monthly premium. Learn more about IRMAA here. The Medicare board determines the base premium for the following year each October. The cost sometimes goes down—it went from $170.10 in 2022 to $164.90 this year. 

If you decide not to enroll in Part B and stay on your group plan, you can choose to enroll only in Part A until you are fully retired, and there is no monthly premium for Part A for most beneficiaries.

Cost Of Your Current Plan 
This is the time to do a close cost-benefit analysis of your current plan. Many people don’t know what benefits they receive on their employer-sponsored group plan, so this is when it’s helpful to do a deep dive and find out key details: is your plan network a PPO (preferred provider organization), POS (point of service) or EPO (exclusive provider organization)? What is your deductible? How much is your out-of-pocket maximum? What amount is deducted from your paycheck? Is it on a biweekly basis? What are your co-pays?

Keep in mind, with original Medicare benefits, there are no networks, no co-pays, no maximum out-of-pockets, no pre-approvals and no prior authorizations. Generally, Medicare will beat any group plan that you’re in from a benefit standpoint, but it has to make financial sense to pay that monthly premium for Medicare Part B. You will want to take a close look at your deductible to see how your group plan compares to Medicare when making your choice.

The Size Of Your Company
Another major point to consider when enrolling in Medicare Part B is the size of your current company. If you work for a company with more than 20 employees, Medicare would be secondary to your company’s group plan, meaning your private insurance would pay first and Medicare would pay second. For many 65-year-olds who are not fully retired and still have group coverage through their employer, it could make sense to stay on their employer’s plan. 

If your company has fewer than 20 employees, it almost always makes sense to enroll in Medicare as soon as you turn 65, as Medicare will be the primary payer and your group plan, if you opt to keep it, would be secondary. If your group plan is secondary, you may need to enroll in Medicare Part B before the group plan will pay.

One thing to note here: By law, an employer is not allowed to incentivize you to leave a group plan. That is a choice for you to make based on what is right for you.

When To Enroll
Medicare would be effective on the first day of your birthday month. So, if your birthday is June 15, your effective date would be June 1. You can start the enrollment process three months prior to your 65th birthday.

What About Late Enrollment Penalties?
You may have heard about late enrollment penalties for those who delay getting Medicare Part B coverage. While late enrollment fees can be costly if you let your coverage lapse, fees can be waived if you keep your group insurance coverage offered by your employer. This is what’s known as “creditable coverage.” You will simply need to provide proof to the Social Security Administration that you’re enrolled in a group plan covering more than 20 employees. You can find that form here. Do not keep your group coverage as primary and then sign up for Medicare Part B as secondary in order to avoid a late enrollment fee. This is a common and costly mistake that can result in you paying a Part B premium for benefits you will not need.

One thing to remember is Medicare is your right. You’re entitled to it at age 65, even if you’re still working. How ever you choose to utilize this benefit is up to you and your individual circumstances. There is not a one-size-fits-all solution. 

Toby Stark is the founder of Stark Associates Insurance Agency.