If Robert Bowman hadn't casually mentioned his upcoming 65th birthday to a friend, he might have missed his window to sign up for Medicare.
"He said you better sign up now because there's a penalty for signing up late. I didn't know that," says Bowman, a 65-year-old former tow truck driver who lives in Torrance.
Every day, 10,000 baby boomers — people age 51 to 69 — turn 65 and become eligible for Medicare. According to a recent survey by the Medicare Rights Center in New York, many are unclear about whether and when to sign up for Part B, which covers outpatient medical care, including most doctor visits.
Last year, the organization fielded 14,000 questions through its national help line. Trouble enrolling in Medicare Part B topped the list. Many people had difficulty navigating specific hurdles, didn't understand enrollment periods or were confused about eligibility.
Confusion can cause people to sign up late for Medicare Part B, which can lead to a hefty penalty that sticks with you for life. For example, one recent caller to the Medicare Rights Center help line reported enrolling late for Part B and, as a result, paying an additional $52.45 a month, or $629 extra a year.
There's a seven-month window to enroll in Medicare that starts three months before your 65th birthday month and extends for three months afterward.
If you're collecting Social Security benefits when you turn 65, you are automatically signed up for an insurance package that includes both Medicare Part A (hospital coverage) and Part B. Part A for most people is free and Part B has a standard monthly premium of $104.90.
If you haven't yet tapped into your Social Security benefits, you need to take decisive action to enroll in Medicare. Missing the deadline can sometimes result in a lifelong penalty of 10% a year on the Part B premium for each year you fail to enroll.
According to the Centers for Medicare & Medicaid Services, just shy of 700,000 people were paying the late fee in 2012.
The best way to avoid trouble is to start asking questions early because if you aren't collecting Social Security benefits, you won't get an official notice telling you to sign up, says Judith Stein, executive director of the Center for Medicare Advocacy in Willimantic, Conn.
"When they turn 64, they should start to think about this," Stein says.
And there's plenty to think about.
The details can get sticky. "There are all sorts of little ripples and nuances, so what works for your neighbor may not work for you," says Casey Schwarz, policy and client services counsel with the Medicare Rights Center.
Here, experts outline some common scenarios that affect enrollment in Medicare Part B, and what to consider as your 65th birthday approaches:
Insurance at work. If at the time of your 65th birthday you're still receiving health benefits through your or your spouse's job, you may be able to delay signing up for Medicare Part B without incurring a penalty.
But there's a caveat: You should not delay enrollment if you work for a firm with fewer than 20 employees. "That is one of the areas of most confusion," Schwarz says.
In this case, Medicare would pay your medical claims first, and your employer coverage may not pay until Medicare does, leaving you in effect without coverage.
Once you leave your job, you have eight months to sign up for Medicare Part B before incurring a late penalty.
FOR THE RECORD
April 27, 1 p.m.: An earlier version of this article incorrectly said there is a late fee if you delay signing up while working for a company with fewer than 20 employees, even if you have work-based health insurance. The penalty does not apply if you continue coverage through your employer, but there can be other costs for not signing up around your 65th birthday.
Extending coverage. Elaine Wong Eakin, executive director of California Health Advocates, says a common mistake people 65 and older make is continuing their employer's health plan through COBRA after they've left or lost their job.
"COBRA is not considered coverage based on active enrollment" and therefore is not a substitute for Medicare, she says.
Also common, Wong Eakin says, is for companies to offer to extend work-based insurance for a period after employees leave a job. Mistakenly, people assume that they have eight months from the time their work-based insurance coverage ends to sign up for Part B. But that's not the case.
"When you sign up for Part B, Social Security will ask when employment or insurance coverage ended, whichever is earlier," she says.
To avoid a penalty, you need to sign up within the eight months of your job ending.
Retiree benefits. If you have retiree health benefits from a former employer, you still must enroll in Medicare during your initial enrollment period to avoid a Part B penalty.
Private insurance. If you're covered by a health insurance policy you purchased yourself, sign up for Medicare when you turn 65.
To cancel your private policy, contact your insurer (and Covered California, if appropriate). Insurers are not allowed to terminate your coverage unless you tell them to do so.
Taking good notes. Medicare enrollment is handled by the Social Security Administration. You should contact your local office about how and when to enroll to avoid both a penalty and a gap in coverage.
Be sure to document all of your conversations. If you're given inaccurate information that causes you to incur a penalty, you may have recourse.
"One thing we want people to know is if they call or go to Social Security and someone tells them anything, they should make a note of the person and the date," says Stein with the Center for Medicare Advocacy. "If it happens to be incorrect. they have a right to rely on that information" and appeal.
Bowman, the former tow truck driver in Torrance, says a little more information about Medicare enrollment would have been welcome. "It's like taxes. There are a lot of things that nobody says a word [about]. If you don't do your research then you find out [later] you got screwed."
Resources and links
For free personalized Medicare counseling services: State Health Insurance Assistance Programs, http://www.shiptacenter.org, or call (800) MEDICARE, or (800) 633-4227
Medicare Rights Center help line: (800) 333-4114 or online at Medicare Interactive, http://www.medicareinteractive.org
Center for Medicare Advocacy: http://www.medicareadvocacy.org/medicare-info
Zamosky is the author of "Healthcare, Insurance, and You: The Savvy Consumer's Guide."