Odd O'blography

Social Insecurity

I turned 65 in May, but somber thoughts of mortality began in January as I contemplated the horrors of Medicare. I was fortunate to retire early with a defined pension benefit and continued health coverage from my former employer. And everything was fine for a few years.

Sure, I felt a little creaky in my joints, but I didn't really feel old until I got the notice from the retirement folks that I must apply for Medicare. They told me I had no choice, there isn't any option to stay on their health plan past age 65. But wait, you can't mean me, Medicare is for old people. For Pete's sake, my mom is on Medicare!

Once I accepted my inevitable fate, I decided that I would also apply for Social Security benefits. My intention was to begin receiving Social Security checks the same month that I started paying my Medicare premiums. The Medicare premium, plus the cost of supplemental insurance, is significantly higher than what I paid for my employer's plan, but my Social Security check will easily cover the difference. Yes, I could get an even bigger check if I wait until age 66 1/2, but that would mean some unwelcome belt-tightening in the short term.

So, I read up on the whole Social Security/Medicare thing, clicked into dozens of newsfeed articles, and started paying attention when my older friends and family members groused about the process. Still, I was surprised several times by things that weren't made clear, or that I misinterpreted. Here are my lessons learned so far:

1. Create an online Social Security Account when you turn 60 (or sooner).

It isn't at all obvious, but you can start your Medicare coverage from your SSA account. In addition, your SSA account provides an earnings history that you can verify, and it shows estimated benefits for your financial planning. If you need to correct the earnings history, it's better to do it a year ahead of applying for benefits. And, most importantly, applying online for Medicare, Social Security, or both, is relatively easy. It will save you time and stress versus doing it in person. This is one thing I got right, and I'm glad I did.

2. Your Medicare birthday is on the first of the month.

My birthday falls on the 28th of May, so I counted back 3 months and started thinking about my application process at the end of February. That was a mistake. It was mid-March when I finally clicked send on my formal application and it turned out that I would actually go on Medicare on the 1st of May. That was barely enough time to grind through the full process. So, count back three months from your birthday and start on the 1st of that month. In my case, I went on Medicare and became responsible for the premiums 1 month earlier than I had expected.

3. You must have a Medicare number before you can apply for supplemental coverage.

Fortunately, I didn't have any problems with my application. The Medicare approval process moved along at a reasonable pace, but they wouldn't give me my number over the phone. I had to wait until the physical card arrived in the mail before I could start my supplemental coverage. And then it took another 10 days to receive that card in the mail. It was actually mid-May before everything was in place.

4. Social Security pays you for the previous month.

If you wish to start your Social Security checks in June, then you must request that your benefits begin in May. This seems wrong to me, but that's the way it works. I asked to start my Social Security in June. So, I don't get a check until July, even though I owe Medicare premiums for both May and June.

5. Medicare will deduct your premium from your Social Security check.

My Social Security benefit hadn't started in May, so Medicare sent me a bill for the first premium payment. Apparently, they bill quarterly, so this was for 3 months of premiums. I didn't want to risk my coverage, so I shrugged and paid. This was another mistake.

I soon received a letter explaining that my current and past due Medicare premiums would be deducted from my first Social Security check. Even though I had already paid. This seemed like a clear case of double-billing, so I called to complain.

The Medicare rep said that the SSA deduction is automatic and out of their control. She told me that I should have just ignored the bill. Then I called SSA to complain. That rep confirmed the double-billing and admitted that it happens all the time. The good news is that I'll automatically get a refund next quarter, in September. Somehow, it doesn't feel like a win.

Some of the confusion may be my own fault, but I don't feel that it's explained very well. The bottom line is that you may be on Medicare, and paying premiums, one month sooner than expected. And you'll probably get your first Social Security check one month later than you expect.

So, if you decide to start your Social Security benefit and Medicare together, then ignore any Medicare billing until you receive your first Social Security check. If you don't start them together, then you need to cover the Medicare premiums in the interim.

Me, I'm loaning the SSA some money, at zero interest, from May until September.