First, if you do not already have Medicare Part A (hospital benefit) and/or Medicare Part B (outpatient benefit), there are 2 forms (available thru Social Security) that need to be completed to activate your benefits. One form is completed by you; the other is completed by your employer; both forms need to be taken to Social Security for enrollment onto Part B (and if you weren’t already enrolled onto Part A, that will be taken care of at the same time by Social Security). Your new enrollment allows you a special election period any time during the year without penalty.
Once you are enrolled onto both Part A and Part B of Medicare you have choices: (1) you can add a Medicare supplement/medigap policy, if you want freedom of choice when selecting providers, along with a stand alone prescription drug plan; (2) you can select a Medicare Advantage/HMO plan (i.e., all of your doctors would need to be in the same medical group and take the HMO plan you select) – the HMO would provide both your medical and prescription drug coverage; or (3) if your company has a retiree plan that contains prescription coverage and states in their plan document that the drug coverage is deemed comparable to a Medicare drug plan, you can go ahead and partner that retiree plan with your Part A and B of Medicare; however, if the retiree plan does not have creditable drug coverage, then you will want to purchase a Medicare stand-alone drug plan so that you do not incur any penalty.
Note: If you are over age 65, verify with your former employer that the prescription drug coverage under the employer plan had language indicating that their drug coverage was comparable/creditable to a Medicare drug plan. If it was not, then you will incur a penalty of 1% per month for each month since turning 65 that you were not on creditable drug coverage. This penalty will be in perpetuity.