Beginner’s Guide to Turning 65

Chace Anderson
By Chace Anderson March 15, 2015 19:43

By the numbers

76.4 million Number of Baby Boomers, those born between 1946 and 1964 who now are a quarter of the nation’s 300-million-plus population ~ Source: Population Reference Bureau

62 Average retirement age in U.S., up from 57 in the early 1990s ~ Source: Gallup

$1,294  Average monthly Social Security benefit ~ Source: U.S. Social Security Administration

$5,119  Older consumers’ average out-of-pocket health care expenditures in 2012, an increase of 43% since 2002. The breakdown: $3,186 (62%) for insurance, $935 (18%) for medical services, $798 (16%) for drugs, and $200 (4%) for medical supplies ~ Source: U.S. Administration on Aging



By Chace Anderson

Nearly 65 and not sure what happens when you reach that milestone? Me too.

But we’re not alone. Between now and 2030, an average of 10,000 U.S. baby boomers will turn 65 each day. Like me — and I’m guessing you — most of them will be apprehensive about navigating the mysteries of Medicare and Social Security.

“I need Medicare for Dummies,” I told Debbie Shally, HICAP manager at Area 12 Agency on Aging. Shally is one of three staff members at Area 12 who, along with a group of volunteers, provide quarterly classes and individual HICAP counseling on what she calls “the Medicare maze.”

“Let’s start with the basics,” Shally began. Medigap, Part C, Donut Hole, Advantage Plans – terms I had heard but never understood – gradually found focus, and if not exactly an expert, I soon felt at least confident enough to make the kinds of decisions turning 65 will require.

Here is what I learned:

HICAP (Health Insurance Counseling and Advocacy Program), a federally funded service administered by the state and by regional agencies on aging, is a terrific resource. Everyone approaching Medicare eligibility should consider signing up for a free HICAP counseling session at an Area 12 office or satellite site in Alpine, Amador, Calaveras, Mariposa or Tuolumne counties.

If you’re already receiving Social Security payments, you will automatically be enrolled in Medicare when you turn 65, and a card will be mailed to you. If you’re not getting Social Security payments, you have a seven-month window in which to enroll in Medicare through a Social Security office. That window is three months before your birth month, your birth month, and three months after.

Sign up! Unlike Social Security, which some people put off because they think it will be financially advantageous to wait, there is a penalty – in the form of higher future premiums – for signing up late for Medicare.

A look at Medicare’s four parts:

Part A

This is hospital insurance. It also covers a percentage of skilled nursing, home health, hospice and inpatient mental-health care, and it is free if you or your spouse worked and paid into Social Security for at least 10 years or 40 quarters. If neither you nor your spouse did so, the 2015 premium is $407 per month, and the deductible is $1,260 per benefit period.

Part B

Part B is outpatient medical insurance, and it covers most medically necessary doctor services, outpatient and mental health care, lab tests, X-rays and some home health and ambulance services. Only those covered by a working spouse’s insurance policy are exempted from Part B. The current premium is $104.90 per month for most (high-income earners pay more) and the annual deductible is $147.

Part B premiums are deducted from monthly Social Security checks or are billed quarterly if you are not yet receiving those benefits. If you don’t sign up during the initial enrollment, you must wait until the following Jan. 1, when the next three-month annual enrollment period starts. Part B benefits don’t begin until July 1. The penalty for signing up late is a 10 percent increase in premiums per year that you wait.

Hospitals, doctors and other health-care providers who agree to accept the Medicare-approved amount as payment in full are said to “accept assignment.” Medicare will pay 80 percent of the approved amount, and the patient is responsible for the remaining 20 percent. Doctors and other providers who accept assignment can be found at or Or ask your doctor or provider.

Skipping ahead to … Part D

Part D is Medicare prescription drug coverage. Shally describes it as a “voluntary program with mandatory penalties” if you enroll late (if you never enroll, of course, there are no penalties). The penalty for signing up after the initial enrollment window is 1 percent of the national Part D average premium per month. Wait four years and the penalty is 48 percent. The national average premium in 2015 is $33.13 per month.

Shally likens Part D to any other kind of insurance. When you turn 65, you might take only one or two prescription meds, or maybe you won’t need any. But who knows what expensive drugs you may require in the years ahead?

Prescription coverage is provided through private insurance companies, and there are now 34 approved plans in California. How do you know which is best for you? A HICAP counselor can help you choose, or you can go to the website and do it yourself.

Variables to consider are your specific ongoing meds, your preferred pharmacy, walk-in versus mail order, and one-month vs. three-month prescriptions. Changing any of these variables changes which Part D plan most economically suits your needs.

“You should come in during the open enrollment period (Oct. 15-Dec. 7 each year) to see if your current plan will still be best for you the following year,” Shally advises.

If you don’t, your existing plan will automatically renew, bringing with it the risk of unexpected and perhaps drastic increases in premiums or drug costs.

What do you receive for your Part D premium? That’s a little complicated.

Each plan will cover the first $2,960 of prescriptions, but there is a $320 deductible and a 25 percent copay. You are also on the hook for the next $3,720 (the “Donut Hole”), but thanks to passage of the Affordable Care Act, a 55 percent discount for brand-name meds and a 35 percent discount for generics kicks in.

Should out-of-pocket expenses exceed $4,700, you pay just 5 percent or $2.55-$6.35 per med (generic versus brand name), whichever is greater.

Back to Part C

Part C is called Medicare Advantage, and allows a private health insurance company like Kaiser or Anthem Blue Cross to provide Medicare benefits. Advantage plans must offer at least the same benefits as Medicare Parts A and B and often include D, but they can do it with different costs, coverages and restrictions. Some offer dental and vision coverage, which basic Medicare does not.

Under Part C, the government pays the private company to cover you. Doctors and other health-care providers deal directly with the company, and all bills go there. You may pay a premium to the company in addition to your Part B premium.

In Tuolumne and Mariposa counties, no companies offer a Medicare Advantage plan but plans are available in Amador, Calaveras and Alpine counties.

Now take a deep breath: There’s more.

Medicare supplement or ‘Medigap’ insurance plans

“Most people on Medicare in Tuolumne County have one of these supplemental plans,” Shally says.

But why have such a plan? Isn’t Medicare itself enough?

Remember the Part A and Part B deductibles? Remember the 20 percent that Medicare does not pay? And perhaps you’d like to be covered when traveling in foreign countries. Ten supplement plans, labeled by letters of the alphabet, will – for a price – provide some or all of those out-of-pocket costs.

“The plans are exactly the same from company to company, so it pays to shop around,” says Shally. “Plan K with one company offers the same coverage as Plan K with another company.”

“I think of Plan A as a beat-up VW,” she adds, “and Plan F as a new Cadillac.”

For detail-obsessed readers who may wonder: The plans’ alphabet soup includes A, B, C, D, F, G, K, L, M, N. As some plans were eliminated, their letters were dropped.

Plan premiums range from less than $50 a month to $160 a month. No matter what plan you choose, you will not be screened or penalized for pre-existing conditions if you enroll within six months after your 65th birthday or from the day you enroll in Part B. There are exceptions: Carriers can ask if you have ALS or end-stage renal disease, both very expensive to treat, and may deny coverage if you do.

Although there is no penalty for waiting to purchase a Medicare supplemental plan, premiums typically rise as clients age. And though plans are tailored to individuals, some companies offer a discount if spouses buy policies from the same company.

Shally recommends meeting annually with a HICAP counselor to determine whether your present supplemental coverage and premium will suit your needs in the year ahead.

HICAP counselors can help you select Part D and supplemental plans, but you will have to purchase them through the company directly or work with an independent insurance agent.

“Medicare Savings Programs” – there are four types – help low-income seniors with premiums and deductibles. Shally labels these “the most underused” federal programs. Information can be found in Medicare & You, a booklet available at HICAP offices, and online at

Enrollment, preventive services

Once enrolled in Medicare, how will you know which services you qualify for? HICAP counselors recommend everyone over 65 sign up for an account at There you can see your statements within 10-15 days of service, review quarterly summaries of all services, and request email reminders for preventive services like colonoscopies, breast cancer screenings and yearly wellness visits, all covered by the program.

HICAP goes a long way toward simplifying Medicare and helping folks navigate “the maze.” But its counselors cannot sign you up for Medicare. To do that you must go through the U.S. Social Security Administration, either online or at a local office.

The Sonora Social Security office serves Tuolumne and Calaveras counties while the Placerville office handles Amador, Alpine and El Dorado counties. The Merced office serves Mariposa County residents, but customers there may teleconference from the Mariposa Social Services office. And no one is ever limited to any one office.

“You can easily apply online,” says Jeff Inabnit, manager of the Sonora office. “Everything you need is there. But anyone uncomfortable with computers or those who want a more human touch can do it over the phone or make an appointment to come in and talk to one of the eight service representatives in our office.”

Social Security

Much of my apprehension about Medicare is gone, but what about Social Security? I grew up thinking it also is a program that kicks in at 65. I’ve learned since that it isn’t that simple, and with some research at,

I began to understand the options.

Those who have paid into Social Security for at least 10 years can qualify for benefits, in addition to surviving spouses. But only those born before 1938 will receive a full benefit at 65. Otherwise, you must wait a year or perhaps as long as two, depending on your birth year.

Those like me, born between 1943 and 1954, can apply for a full Social Security benefit at age 66. Born after 1954? The full-benefit age gradually increases to 67.

You can apply for Social Security as soon as you turn 62, but your benefit is reduced by fractions of a percentage point for every month short of your full retirement age.

Online at, you can view a calculator that outlines when you will qualify for a full retirement benefit and what percentage of that benefit you’ll receive if you retire early.

If you receive a pension based on work not covered by Social Security, as teachers and government workers often do, your Social Security benefit will be reduced.

What if you work past your full retirement age? Or retire and delay receiving Social Security benefits? In those cases, eight percent per year will be added to your benefit until you turn 70, when payments top out.

Inabnit is right about the Internet. Nearly every question I could think of was answered at I found charts and calculators that could do just about anything.

Am I still anxious about turning 65? A little – but only because 65 seems “old,” not because I’m nervous about Medicare.

I now know the answers to most of my questions, and as for the rest, I’ve learned where they can be found online. And if the Internet becomes intimidating or a little confusing, I know real people with the right information are close by and waiting to help.

And it’s also nice to know I’ll have lots of company as I approach this milestone.

Where to Enroll, Get Help


Health Insurance Counseling and Advocacy Program (HICAP), at Area 12 Agency on Aging, 19074 Standard Road, Standard. The office is open from 8am-noon and 1-5pm Monday-Friday. Its trained volunteers can also schedule meetings at various satellite sites throughout the foothills. Call 532-6272 or 1-800-434-0222 for appointments and locations.


U.S. Department of Health and Human Services, Medicare 24/7 information line, 1-800-MEDICARE       (1-800-633-4227). Online,,


Social Security Administration, 1-800-772-1213,

Sonora office, serving Tuolumne and Calaveras counties, 745 Morning Star Drive, 1-888-397-4125.

Placerville office, serving Amador, Alpine and El Dorado counties, 3916 Missouri Flat Rd., Ste. A.,       1-877-545-5497.

Merced office, serving Merced and Mariposa counties,  600 W. Olive Ave., 1-888-632-7069.

For the deaf or hard of hearing, call Social Security’s TTY number, 1-800-325-0778.

Hours for all local offices listed above: 9am-4pm Mon., Tues., Thurs., Fri.; 9am-noon Wed.

Copyright © 2015 Friends and Neighbors Magazine
Chace Anderson
By Chace Anderson March 15, 2015 19:43
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