Carrie Schwab Pomerantz

Dear Carrie: I'm turning 65 next year and plan to work for a couple more years. Should I apply for Medicare even though I have coverage through my employer? --A Reader

Dear Reader: This is an important question that affects a growing number of workers. In fact, data from the University of Michigan's Health and Retirement Study, conducted from 2006-2010 and sponsored by the National Institute on Aging, shows some eye-popping trends. According to the study, 79.5 percent of respondents expect to work past age 65, with 65.2 percent expecting to retire by age 80 -- and 22.4 percent planning never to retire at all!

Your question is doubly important because while enrollment in Medicare is automatic if you've already filed for Social Security, if you're still working and not receiving Social Security, enrollment is in your hands. And it's not just a question of whether or not you need Medicare coverage right now. You must apply for Medicare within a certain time window to avoid getting hit with a penalty for late enrollment.

KNOW YOUR OPTIONS AND TIMING

Even if you're not receiving Social Security benefits at age 65, you're still eligible for full Medicare benefits. This includes the premium-free Part A (hospitalization), as well as Part B (doctors visits and outpatient care) and Part D (prescription drugs); you pay a premium for each. But it's up to you to contact Social Security to sign up, and you must do this within what's called your initial enrollment period. Generally, this period extends from three months (SET ITAL) before (END ITAL) the month you turn 65, until three months (SET ITAL) after (END ITAL) the month you turn 65 -- a seven-month period in total. If you want your Medicare benefits to start right when you turn 65, you have to sign up during the three months before your birthday.

If you miss this initial enrollment period, you may have to wait until what's called the general enrollment period, which runs from Jan. 1-March 31 each year. There are a couple of drawbacks to waiting. First, your benefits won't start until July 1 of the year in which you enroll. And second, you may have to pay a penalty.

APPLY AT LEAST FOR MEDICARE PART a


Carrie Schwab Pomerantz

Carrie Schwab Pomerantz is a Motley Fool contributor.

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