Don’t Wait Until It’s Too Late

By Tammy Flanagan

February 6, 2009

At a seminar this week, an employee told me that she was doing some research on Medicare for herself and came across the information regarding late enrollment. She called a former co-worker, but it was too late. Her friend had retired more than a year ago and had not enrolled in Part B.

When her friend, who was 72 years old, contacted Social Security to find out what she could do, she got good news and bad news. The good news was there's an open enrollment period for those who have delayed signing up, held every year from January to March (with coverage effective on July 1). The bad news was that since she had neglected to enroll within eight months of her retirement date, she would incur a stiff penalty -- 10 percent higher premiums for every year past 65 that she had delayed signing up.

The 2009 premium for Part B is $96.40 per month (or more for wealthier folks). The retiree would incur a 70 percent surcharge to the premium for delaying her enrollment for seven years past age 65. So her premium would be a whopping $163.88 per month.

Employees covered by an employer-sponsored health plan, like the Federal Employees Health Benefits Plan, usually sign up only for Medicare Part A when they turn 65. (The initial enrollment period for Medicare is three months on either side of the month of your 65th birthday). Usually they are told by Social Security that they can postpone enrollment in Part B until they retire. But they shouldn't wait too long, because of the rule about signing up within eight months retirement.

Parts and Premiums

There is no monthly premium for Medicare Part A for those who have paid Medicare taxes throughout their careers. If you have qualified for Part A, your spouse also qualifies after he or she turns 65. All federal employees have been paying the Medicare Hospital Insurance Tax (currently 1.45 percent on all wages) since 1983, and all who have retired after paying the tax as federal employees are qualified for Medicare.

I can't think of any reason why a person wouldn't enroll in Part A when eligible. Part A coverage can help with out-of-pocket hospitalization expenses. After you retire, Medicare becomes your primary insurance. By having the combination of Medicare and FEHBP, you save your FEHBP plan most of the expenses of your hospital stay -- and that helps all FEHBP participants by holding down premiums.

If you already are collecting Social Security retirement benefits at 65, you will receive Medicare enrollment information in the mail. If you have not yet retired, or are not eligible for Social Security retirement, you will have to contact Social Security to enroll in Medicare. Call 800-772-1213, or visit

For More Information

Here are some references for Medicare information:

And here are some previous Retirement Planning columns on the subject:

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Monday mornings at 10 a.m. ET on or on WFED AM 1500 in the Washington metro area.

By Tammy Flanagan

February 6, 2009