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Working past age 65….so what about Medicare? | Kathy Grant | SHIP Welcome to Medicare - YouTube
Channel: SHIP National Technical Assistance Center
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Hello, and welcome to Working Past
Age 65… So What About Medicare?
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We have several objectives for this
presentation we will help everyone
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turning 65 to understand what they do and
don't need to think about regarding Medicare
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we will explain to those who plan on working
past age 65 what they may need to do we'll give
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guidance to anyone who leaves their job after age
65 whether voluntarily or because of an unexpected
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job loss we will explain what you should do if
you become re-employed after age 65. and we will
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highlight why Medicare eligible individuals should
not take COBRA when they leave an employer plan
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age 65 was long considered the traditional
retirement age for workers over time we
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are seeing more and more people work well past
age 65. why there are several reasons for this
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the age of eligibility for social
security benefits was originally age 65
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but social security has gradually increased
the age of eligibility so that anyone born
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after 1960 now has a target retirement date
at age 67. individuals may also recognize
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that they don't currently have enough savings
to cover their living expenses in retirement
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there are also many people who enjoy their work
and want to continue to remain busy and active
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or they may be working towards becoming fully
vested at their company in order to accrue certain
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benefits when they eventually retire and many
recognize that health care costs may rise during
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retirement and they prefer to stay on an
employer health plan regardless of how
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long you plan to work there may be detours along
the way an unexpected layoff a company closing
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family obligations or personal health issues
all of these events may force a change of plans
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before we look at the decisions
you may need to make at age 65
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let's review some basic facts about Medicare
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there are three distinct
parts to Medicare coverage
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Medicare Part A is hospital insurance which covers
costs incurred when you are a hospital inpatient
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Medicare Part B is medical insurance which
covers doctor services both in and out of
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the hospital as well as other outpatient
services such as lab work and radiology Part
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B may also cover some prescription drugs and
Medicare Part D which was introduced in 2006
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offers prescription drug coverage to Medicare
enrollees who have either Part A or Part B or both
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Medicare Parts A and B with or without a
Part D plan is known as Original Medicare
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as an alternative to Original
Medicare. Medicare Advantage plans
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also known as Medicare Part C combine Medicare
Parts A b and d into an all-inclusive health plan
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Advantage plans are offered by insurance
companies and typically require you to
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stay within their network of hospitals and
providers when seeking non-emergency care
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so what are the requirements for Medicare
eligibility you must be 65 years old and either a
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U.S. citizen or a lawfully permitted resident for
five years individuals under age 65 who have been
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deemed disabled and are receiving social security
disability payments are also eligible for Medicare
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after 24 months of payments the waiting period
is waived if the individual has either end stage
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renal disease or ALS Lou Gehrig's disease in
order to qualify for premium free Part A you
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need 40 credits or about 10 years of working
and paying FICA taxes if you yourself have not
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earned enough credits you may qualify through your
spouse if he or she has earned sufficient credits
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even though the age of eligibility for
social security has gradually moved up
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the age of eligibility for Medicare remains at
age 65. every Medicare eligible individual has
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what is known as their initial enrollment
period which begins the first of the month
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three months prior to your birthday month and runs
until the last day of the month three months after
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your birthday month so Medicare is giving you
a seven month window to enroll in Medicare but
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there is a catch the later you enroll within this
initial enrollment period the longer you will need
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to wait for your Medicare coverage to start if you
are planning on signing up for Medicare at age 65
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you should be aware of your initial enrollment
period and make sure that you sign up for Medicare
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in one of the three months before your birthday
month in order for your coverage to start on the
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first day of your birthday month delaying sign
up until your birthday month or any of the three
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months after means the start of your Medicare
coverage will be delayed for up to three months
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if you are beyond your initial enrollment
period over 65 and leave or lose your employer
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coverage you have what is called a special
enrollment period to enroll in Medicare
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the eight-month window that's given to you is
protection against any late enrollment penalties
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but in most cases you would want to
time your Medicare coverage beginning
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to coincide with the end of your employer coverage
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so, let's look at a scenario where you've
decided to work past age 65. we'll look at
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each of the three parts of Medicare and review
the questions you should be asking yourself
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we'll start with Medicare Part A as we mentioned
before for most individuals Part A is premium free
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as long as they or their spouse have earned the 40
work credits for this reason people may enroll in
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Part A when first eligible but decide to decline
Part B if they're still covered by an employer
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group health plan there is one important caveat
however if your employer group health plan is a
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high deductible plan with a health savings
account or HSA to which you contribute you
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should not sign up for Part A as long as you're
still contributing to that health savings account
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if you're planning ahead you would need to
stop your HSA account contributions at least
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six months prior to signing up for Medicare Part
A in order to avoid any possible tax penalties
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now we'll look at the question of whether
or not to sign up for Medicare Part B
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if you're covered by an employer group health
plan you need to determine whether there are fewer
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than 20 employees at the company if so
you should absolutely take Medicare Part
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B which will become your primary insurance your
employer plan will then be secondary to Medicare
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if you have any questions or concerns it's always
wise to check with your employers human resources
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or benefits area to confirm whether or not you
should enroll in Part B if you're self-employed
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or not working and are either paying for
private insurance or purchasing insurance
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through your state's health insurance exchange
you must enroll in Medicare when turning age 65.
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lastly if you are on Medicaid, you will also
need to sign up for Medicare once you turn
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age 65. your eligibility for continuing
Medicaid as a supplement to Medicare will
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be subject to redetermination at that time
however if you are covered as a current
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employee by an employer group health plan either
your own employer plan or that of a spouse and
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that employer has more than 20 employees you can
opt to decline Medicare Part B until a later date
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finally you need to consider Medicare Part D
coverage whether through a stand-alone Part D
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prescription drug plan or as part of your
coverage under a Medicare Advantage plan
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although Medicare Part D is actually considered
voluntary there is a penalty for late enrollment
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as long as the drug coverage you have under your
current employer plan is considered creditable
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which is defined by Medicare as just as good
as Medicare coverage you do not need to be
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concerned about late enrollment penalties however
once you leave or lose that creditable coverage
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you have 63 days to enroll in a Medicare
prescription drug plan because Part D is voluntary
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some individuals may choose to forego
enrolling in a plan when they are first
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eligible especially if they're not currently
taking any prescription medications
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this may prove problematic later on however
when they need coverage as they may need to
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wait for an open enrollment period and will also
have a penalty if the 63 day period has passed
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so where does one go to sign up for Medicare your
local social security office is the place to start
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you can access social security at ssa.gov
and enroll online you will need to set up
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a personalized mysocialsecurity.gov
account in order to enroll online
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you can also call social security and complete
your enrollment by phone or you can visit your
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local social security office and complete your
enrollment in person the social security website
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has an office locator where you can search by
zip code for the office that is nearest to you
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as I mentioned before plans can change and we
want you to be prepared for what you need to do
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under those circumstances so let's
look at some alternate scenarios
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so, say your plan was to work until age 70 but
unfortunately your plan has been derailed by an
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unexpected job loss at the age of 67. what steps
do you need to take first you want to contact
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social security as soon as possible to start the
process of enrolling in Medicare remember you do
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have that eight month special enrollment period
but ideally you want to time the start of your
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Medicare coverage to coincide with the loss of
your employer coverage so be sure to confirm
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exactly when your employer coverage will end
Medicare coverage always starts as of the first
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of the month you've enrolled if you have already
enrolled in Part A when you turn age 65 great
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otherwise you should now be enrolling in both
Parts A and B social security will need proof
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that you had employer group health plan coverage
from your 65th birthday until the last day of
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your current employer coverage providing them with
this proof will protect you from a late enrollment
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penalty you must have your employer complete
CMS form L564 to provide evidence of coverage
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you can obtain this form on the social security
website you'll also need to make some decisions
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on how you want to get your Medicare coverage
whether enrolling in Original Medicare with a
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separate prescription drug plan or a Medicare
Advantage plan which combines a b and d if you
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are staying with Original Medicare you may also
want to review medigap plans which supplement
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Medicare costs by covering co-pays and deductibles
and finally you should be aware that COBRA is
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not considered employer coverage and it leaves
you exposed on two fronts it will not protect
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you from the late enrollment penalty if you have
not signed up for Part B within that eight-month
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special enrollment period and if COBRA insurers
learn that you are eligible for Medicare while
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they are covering you they may refuse to cover
you and reclaim any payments made on your behalf
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shown here is an example of CMS form L564
again you would need this form to be signed
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by any employer who had you participating in their
group health plan after you had turned to age 65.
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the most critical information is what you
see circled in red here that is the dates of
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coverage under the employer plan as long as this
form shows you have had continuous coverage from
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your 65th birthday to the present you will not
need to worry about any late enrollment penalties
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for Medicare remember too that if you had more
than one employer since turning age 65 you will
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need a separate CMS form L564 signed by each
employer citing the relevant dates of coverage
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along with form L564 you will also need to
submit a CMS 40b form which is an application
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for Medicare Part B this form can also be
found on the social security website at ssa.gov
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so now let's say you stopped working at age
66 followed all the rules we just talked
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about and signed up for Medicare Parts A
b and d and now you've been offered a job
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where you're actually going to be able
to join the employer's group health plan
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in this case you can request at social security
that your Medicare Part B be suspended until you
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need it or want to pick it up again if you have a
Part D plan or a Medicare Advantage plan in place
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it's your responsibility to contact
those plans and cancel that coverage
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and of course you want to be mindful to time
the change over correctly so that you don't
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duplicate your coverage or leave yourself with
any gaps in coverage when making that switch
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and finally let's look at what you
should do if you delay your enrollment
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and your retirement past age 65 and your plan is
on track to retire a few years later once again
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your first stop should be at social security to
apply for Part B as well as Part A if you did not
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previously enroll you will need that CMS form
L564 from every employer who covered you after
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turning age 65. you'll need to decide how you want
your coverage Original Medicare with a Part D plan
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or a Medicare Advantage plan you may want to look
at optional medigap plans as a way to supplement
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those Medicare costs that aren't covered whatever
you do not bridge the time between leaving your
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job and signing up for Medicare by taking COBRA
as COBRA is not considered employer group health
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plan coverage and you may be penalized and
may have coverage declined and to help you
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with all of these decisions we urge you to make
an appointment with a ship counselor in your area
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so what kind of assistance can SHIP counselors
provide they can help you decide which path to
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Medicare is the best for you Original Medicare
or Medicare Advantage they can explain
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what Medicare does and doesn't cover and what
preventive services are actually available to
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you at no cost they can provide information on
medigap options in case you do wish to supplement
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your Original Medicare coverage they can assist
you in reviewing your prescription drug coverage
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initially and every year during open enrollment
to make sure that the plan you select is giving
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you the best coverage for the lowest cost they
can check to see if you're eligible for a number
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of federal and state programs that help consumers
with health care costs and they can explain how
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late enrollment penalties work and help you
understand what you need to do to avoid them
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to find a SHIP program in your state you can go to
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shiphelp.org and use the SHIP locator function
to find your local program from there you will
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be directed to a counselor in your city or town
that can meet with you and review your needs
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SHIP counselors provide free confidential unbiased
counseling to all Medicare beneficiaries and their
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families and caregivers we hope this information
has been helpful and we hope you will consider a
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visit to a SHIP counselor in your area to help
you navigate your Medicare journey thank you
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