Looking Ahead to Retirement and Medicare

When you turn age 65, you’ll be eligible to enroll in Medicare, the government-sponsored health care program for older Americans and for qualified individuals with certain disabilities, permanent kidney failure, or ALS (Lou Gehrig’s disease).

You have options for when to enroll in Medicare. However, the rules are complex and there are penalties for not enrolling by the Medicare deadline or for not continuing "creditable" coverage. The penalties can result in higher Part B and Part D monthly premiums for life. Plus, understanding how Medicare works with UC coverage can be confusing. That’s why it’s important to know the basics before you become Medicare-eligible.

Medicare and Your UC Medicare Coverage

Initial Enrollment
Once you enroll in Medicare (usually through the Social Security Administration) and retire from UC, you will enroll in the UC Medicare Choice PPO (administered by UnitedHealthcare — UHC).

Ongoing Enrollment
Each year during UC’s Open Enrollment period, you will have the option to remain in your current plan or change plans and enroll in another Medicare plan offered by UC, which includes:

• Kaiser Senior Advantage HMO (Kaiser Permanente Medicare Advantage HMO)
• UC Medicare PPO (Anthem)
• UC Medicare PPO without Prescription Drugs (Anthem)
• UC High Option Supplement to Medicare (Anthem)

Medicare Coordinator Program
The Medicare Coordinator Program (MCP) is designed for UC retirees and their Medicare-eligible spouses or domestic partners and survivors who live outside California (but in the U.S.). UC sponsors the MCP with a Health Reimbursement Arrangement (HRA). The HRA can be used to pay monthly premiums and eligible health care costs.

You’ll work directly with a company called Via Benefits to enroll in an individual Medicare plan through the MCP.

How Costs Are Paid
After you enroll in Medicare and transfer into the UC Medicare Choice PPO plan (administered by UnitedHealthcare — UHC), UHC becomes the primary payer for Medicare-covered services. You will typically have a copay when you receive care. Get more information about how the plan works and costs for services, and find a provider that accepts Medicare. For other questions or if you need help, call UHC at (866) 887-9533.

What You Pay for Medicare Coverage

For 2024, the UC Medicare Choice PPO plan has no premium for retirees receiving the full UC contribution. 

Part B late enrollment penalty — You won’t have to pay a Part B late enrollment penalty if you qualify for a Special Enrollment Period. However, you’ll pay an extra 10% for each year you could have signed up for Part B but didn’t. You may also pay a higher premium depending on your income. Learn more about Special Enrollment Periods.

Part D late enrollment penalty — The Medicare Part D late enrollment penalty is a permanent penalty that Medicare charges to Medicare-eligible people who go more than 63 days without creditable Part D prescription drug coverage. In accordance with guidelines from the Centers for Medicare & Medicaid Services (CMS), Medicare will charge 1% extra for each month you are not enrolled in creditable coverage after the 63 days. To avoid this penalty, you must enroll in an employee, retiree, COBRA or individual medical plan with creditable prescription drug coverage from age 65 on. 

Generally, you won’t have to pay a Part D penalty if you have creditable drug coverage (coverage that’s similar in value to Part D) OR you qualify for Extra Help.

You’ll pay an extra 1% for each month (that’s 12% a year) if you: 

• Don’t join a Medicare drug plan when you first get Medicare.
• Go 63 days or more without creditable drug coverage.

You may also pay a higher premium depending on your income. After you join a Medicare drug plan, the plan will tell you if you have to pay a penalty and what your premium will be.

Learn more about Medicare.