Medicare at 65: the deadlines that matter

Medicare is one of the best parts of turning 65. It's also one of the easiest places to make a mistake that costs money for the rest of your life, simply by signing up a few months late. The rules aren't hard once they're laid out, so let's lay them out.

First, the parts of Medicare

• Part A covers hospital stays. Most people pay nothing for it because they or a spouse worked long enough.
• Part B covers doctors, outpatient care and tests. It has a monthly premium.
• Part D covers prescription drugs, through private plans.
• Medicare Advantage (sometimes called Part C) is a private plan that bundles A, B and usually D, often with a network of doctors.
• A Medicare supplement, also called Medigap, is private insurance that helps pay what Original Medicare (Parts A and B) leaves for you to pay.

Your first window: seven months around your 65th birthday

Your Initial Enrollment Period starts three months before the month you turn 65, includes your birthday month, and ends three months after. If you're turning 65 in March, your window runs from December through June.

If you're already collecting Social Security, you'll be signed up for Parts A and B automatically. If you're not, you need to sign up yourself, usually through Social Security.

If you're still working at 65

If you, or a spouse, are still working and covered by that employer's health plan, you can often wait to sign up for Part B without a penalty. (For smaller employers, those with fewer than 20 employees, Medicare usually has to come first, so check with the plan.)

When that job or coverage ends, you get an eight-month Special Enrollment Period to sign up for Part B.

Here's the trap: COBRA, the option to keep your employer's plan after you leave, does not count as coverage from current work. If you go on COBRA after 65 and don't sign up for Part B, the clock on your eight months is already running, and you could face a penalty and a gap in coverage. Retiree health plans work the same way.

The penalties that never go away

• Part B: For each full 12 months you could have had Part B but didn't (and didn't have coverage from current work), your premium goes up 10%, for as long as you have Part B.
• Part D: If you go 63 days or more without Part D or other drug coverage that's at least as good, you'll pay an extra 1% of a national base premium for every month you went without, again for life.

If you miss your windows, there's a General Enrollment Period from January 1 to March 31 each year, with coverage starting the following month. But the penalty still applies.

The window most people don't know about

When you first have Part B and are 65 or older, you get a six-month Medigap open enrollment period. During those six months, an insurance company has to sell you any supplement it offers in your state, at its best price, regardless of your health.

After that window, in most states, insurers can ask health questions, charge more, or say no. That matters if you start with Medicare Advantage and later want to switch back to Original Medicare with a supplement: depending on your state and your health, that door may not stay open.

Every year after: October 15 to December 7

Once you're on Medicare, you can change your Medicare Advantage or Part D plan each fall during Open Enrollment. Plans change their costs, drug lists and networks every year, so it's worth a look even if you're happy.

A few more things worth knowing

• Health savings accounts: You can't put money into an HSA once you're on Medicare. If you sign up for Part A after 65, coverage can be backdated up to six months, so many people stop HSA contributions six months before they sign up.
• Couples: Each of you has your own dates. If one spouse is younger, they'll need their own coverage until they turn 65.

This is general information, and the rules have details and exceptions. Medicare.gov and your State Health Insurance Assistance Program (SHIP), which offers free, unbiased counseling, are good places to check your own situation.