Medicare Transition Checklist: Moving From Your Current Health Insurance Coverage to Medicare

Whether you have ACA Marketplace coverage, an individual health insurance policy purchased directly from an insurer, COBRA coverage, retiree coverage, or another type of health insurance, understanding enrollment timelines, coverage options, and potential costs can help you avoid unnecessary expenses or gaps in coverage.

The checklist below outlines key steps to consider before, during, and after your Medicare enrollment period.

6-12 Months Before Your 65th Birthday

• Determine whether you need to enroll in Medicare at age 65 or may be able to delay enrollment based on your current coverage. If you are enrolled in a group health plan based on your or your spouse’s current employment, you may be able to delay certain parts of Medicare without penalty. Verify the applicable rules with the plan administrator.
• Estimate your healthcare costs under Medicare.
• Compare Original Medicare and Medicare Advantage to help determine which may better fit your needs.
• If you’re contributing to a Health Savings Account (HSA), coordinate the timing of your final HSA contributions with your Medicare enrollment. Once enrolled in Medicare, you can no longer make HSA contributions, and Medicare coverage may be retroactive in certain situations.
• Gather information about your current health insurance coverage, benefits, provider network, and anticipated healthcare needs.

3 Months Before Your 65th Birthday

• Confirm your seven-month Medicare Initial Enrollment Period, which generally begins three months before the month you turn 65 and ends three months after your birthday month.
• Determine whether you’ll be automatically enrolled in Medicare or need to apply through Social Security. In general, individuals already receiving Social Security benefits at least four months before turning 65 are automatically enrolled in Parts A and B.
• Review available Medicare coverage options.
• Compare provider networks and prescription drug coverage.
• Determine whether your current prescription drug coverage is considered creditable and retain any notices provided by your plan. Going 63 days or more without Medicare drug coverage or other creditable drug coverage may result in a Part D late-enrollment penalty.

During Your Initial or Applicable Enrollment Period

• Enroll in Medicare Parts A and B if appropriate for your situation.
• Evaluate Medigap and Part D options if choosing Original Medicare.
• Compare Medicare Advantage plans if considering Part C.
• Confirm your Part A and Part B effective dates.

Before Canceling Your Current Coverage

• Confirm Medicare enrollment is complete.
• Verify your Medicare coverage effective date.
• Understand that if you have ACA Marketplace coverage, eligibility for premium tax credits generally ends when you become eligible for premium-free Medicare Part A, even if you continue your Marketplace plan.
• If you have ACA Marketplace coverage and must pay a premium for Medicare Part A, review your coverage options carefully before ending Marketplace coverage.
• Review your plan’s termination, coordination, and enrollment rules before canceling coverage.

Common Mistakes to Avoid

• Missing your Initial Enrollment Period or the enrollment deadline that applies to your situation.
• Assuming your current coverage allows you to delay Medicare enrollment without penalty. ACA Marketplace coverage, COBRA coverage, and individual health insurance purchased directly from an insurer generally do not provide the same Medicare enrollment protections as qualifying employer coverage.
• If you have ACA Marketplace coverage, be sure to coordinate the end of your coverage with your Medicare effective date. Continuing Marketplace coverage after becoming ineligible for premium tax credits could result in unnecessary costs.
• Missing your six-month Medigap Open Enrollment Period, which begins when you’re 65 or older and enrolled in Part B.
• Overlooking HSA contribution rules and the possibility that Medicare coverage may be retroactive.

Questions to Discuss With Your Advisor

• How will my healthcare costs change under Medicare?
• How should Medicare expenses fit into my retirement income plan?
• Should I change how I use my HSA after age 65?
• How will Medicare premiums and income-related surcharges affect my retirement cash flow?
• How do my Medicare decisions coordinate with Social Security and other retirement income sources?

Final Thoughts

Every individual’s healthcare and retirement planning needs are unique. If you’re approaching Medicare eligibility, your Modera advisor can help you evaluate the financial implications of your options and coordinate your Medicare decisions with your broader financial plan. A little advance planning can go a long way toward making the transition smoother and avoiding unnecessary costs.