Key Takeaways
- A poster in the r/personalfinance forum says their 71-year-old father retires next month, but the post doesn’t say whether he put off Medicare Part B while he had job coverage.
- If he did, federal law gives him a one-time, six-month Medigap Open Enrollment Period. It starts the first month he has Part B, and during it no insurer can deny him coverage for pre-existing health problems.
- Without Medigap, Original Medicare usually leaves him 20% of each Part B bill after the deductible, with no yearly limit, so a treatment with a $40,000 Medicare-approved cost would cost him $8,000.
- The Part B start date on his Medicare card shows whether his window is still ahead of him, and his 62-year-old wife gets her own six months once she has Part B at 65.
If you worked past 65 and held off on Medicare Part B, you may still have a valuable window ahead of you. It opens when your Part B starts, and for six months a Medigap insurer can’t turn you down because of your health. That’s very good news for anyone retiring late, as long as they know the window is there.
One family’s retirement plan left out health insurance
A poster in Reddit’s r/personalfinance forum is helping their parents put together a retirement plan. Their dad is 71 and retires next month, and their mom, 62, may have to retire early next year. The parents have about $2.5 million across their paid-off home, cash and investments, and most of the post asks how far to move them out of stocks. Health coverage got one line: “For now, I’m intentionally sidestepping health insurance, since there’s a lot going on there.”
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The post assumes dad will be on Medicare. It doesn’t say whether he signed up for Part B at 65 or put it off while he had his job’s coverage. (If he was already collecting Social Security when he turned 65, Medicare enrolled him in Part B automatically, so putting it off would have meant turning it down.) If he took Part B at 65, his Medigap window closed years ago. If he put it off, he’s about to get one.
His six months start with Part B, even at 71
Federal law gives you one six-month Medigap Open Enrollment Period, starting the first month you have Part B and are 65 or older. The same goes for someone who signed up for Part B late because they had job coverage. For this dad, his six months would start when his Part B does, at 71. During those months, an insurer can’t use medical underwriting to decide whether to accept his application or to deny him coverage for pre-existing health problems. After that, he may not be able to buy a Medigap policy at all, or it may cost more. The window comes only once. It also only helps with Original Medicare, because Medigap doesn’t work with Medicare Advantage.
The 20% Original Medicare leaves him has no ceiling
Once he’s paid the Part B deductible, Original Medicare usually leaves him 20% of the Medicare-approved cost of each covered service or item. And since Part B has no yearly limit on out-of-pocket costs, nothing stops those 20% shares from piling up in a bad year. Say he needs a treatment with a Medicare-approved cost of $40,000. His 20% of it is $8,000. A second treatment like it in the same year costs him another $8,000, so he’s out $16,000 between the two. A Medigap policy helps pay costs Original Medicare doesn’t cover, like that 20%. During his six months, no insurer can turn him away over the kind of health history that leads to bills like these.
Mom’s turn comes at 65
Mom’s Medigap window works the same way, just later. Her first chance to sign up for Medicare lasts seven months, from three months before she turns 65 to three months after the month she turns 65. Her own six months for Medigap start the first month she has Part B. Until then, the poster has penciled in a rough worst case of $25,000 a year for 2-3 years to cover her on marketplace insurance or COBRA. Once she’s on Medicare, the same uncapped 20% applies to her Part B bills, so her six months matter just as much as his.
Check his Medicare card before he retires
His Medicare card shows the date his Part B coverage started, so the family should look there first. If it shows Part B from 65, his window has passed, and buying Medigap now may be harder or cost more. If he never signed up for Part B, he can sign up while he still has his job’s coverage, and his six months start the first month Part B does. If he buys a Medigap policy within those months, his health can’t keep him from getting one.
Frankly, if his Part B hasn’t started yet, I’d put those six months at the top of this family’s to-do list, ahead of the stock-and-bond questions that fill most of the post. They can rebalance the portfolio in any month, but his Medigap window can’t be moved once it opens. Of course, Medicare’s yearly open enrollment runs until Dec. 7, right around when he retires, so the two are easy to mix up. Nothing he does during open enrollment starts his Medigap window. Only his Part B start date does.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
