Enrollment into Original Medicare is not automatic when you turn 65 for many people. Health insurance consumers in Covered California lose the subsidy when they become eligible for Medicare at age 65. But if the person has not taken the appropriate steps to enroll in Medicare Parts A and B, they can’t get Medicare and may have to pay the full health insurance premium for their Covered California health plan plus a late enrollment penalty for Medicare Part B.
The transition from Covered California health insurance, with the premium lowering subsidy, to Medicare can be confusing. It is not intuitive that a person who is not automatically enrolled in Medicare must contact the Social Security Administration (SSA). However, the SSA is the gatekeeper of your employment and income records and therefore can make the determination of who is eligible for Medicare based on their work history.
Apply For Medicare Through Social Security
Most people wait until they are eligible for their full Social Security amount before applying for the retirement income. People born after 1954 are not eligible for the full Social Security retirement benefit until they are 66. For individuals born after 1960, they won’t be eligible for full retirement benefits until age 67. But, most people are eligible for full Original Medicare at age 65. When it comes time to trigger enrollment for Original Medicare, you need to visit the SSA page just for Medicare enrollment.
You will be automatically enrolled in Original Medicare Parts A and B at the age of 65 if you have the necessary work history of paying Medicare taxes and:
1. You started taking Social Security retirement early, such as at age 62.
2. You are receiving Railroad Retirement benefits.
You will also be automatically enrolled if:
1. You have been receiving Social Security Disability benefits for 24 months prior to your 65th birthday.
2. You have ALS, or amyotrophic lateral sclerosis.
3. You have End Stage Renal Disease, after the 4th month of your dialysis treatment.
Late Enrollment Penalty
Unlike Social Security, who rewards those people who delay taking their retirement benefits until they are older, if you don’t enroll in Medicare when you are eligible, you will get slapped with a Late Enrollment Penalty. You are not subject to any penalty if you have creditable employer sponsored health insurance either through your employment or that of a spouse. Covered California is not a creditable option for avoiding the Late Enrollment Penalty.
If you have delayed enrolling in Medicare when you were first eligible, you can enroll during the general enrollment period. From January 1 through March 31 you can enroll in both parts of Medicare and the coverage will become effective July 1 of that year. The Part B Late Enrollment Penalty is 10% of the Part B premium for each 12-month period you were eligible for Part B, but did not sign up.
For many people in Covered California who turn 65, the subsidized health plans cost less than enrolling in Medicare. With Original Medicare, Part B will have a monthly premium of $135.50 for 2019. Then there may be a cost for a Medicare Advantage plan or a Medicare Supplement with a Prescription Drug Plan.
It’s possible to get extra help through Medicare and the Social Security Administration through their Low Income Subsidy program. You need to explore all the options to lower your Medicare costs from the extra help from Social Security to being determined eligible for both Medicare and Medi-Cal: Dual Eligible.