Medicare Enrollment Periods

man-marking-calendar

Trying to understand the many Medicare plan enrollment periods can be daunting. In fact, it is very common to miss an enrollment period and face a late-enrollment fee.

Roughly 12% of Medicare beneficiaries also lacked creditable

prescription drug coverage, making them potentially liable for a premium penalty when they later do enroll in a Part D Drug Plan.

Here is a guide to the different enrollment periods. Make sure you know what you’re signing up for and when you should do so. Keep this information in mind so that you won’t end up with late-enrollment fees!

What is the Initial Enrollment Period?

Your Medicare Initial Enrollment Period one of the most important dates to keep in mind. During the IEP, you can enroll in Original Medicare (Part A and Part B) or a Medicare Advantage plan (Medicare Part C). Enrolling during your IEP avoids any late enrollment penalty.

Your Initial Enrollment Period (or IEP) is a seven-month period of time. It begins three months before the month of your 65th birthday. It includes your birthday month and then continues for three months following your birthday month.

For example, if you turn 65 on November 15th, your Medicare IEP would run from August 1st to February 31st.

You may also enroll for Part D coverage during this period. That drug coverage can be a standalone plan or part of a Medicare Advantage plan that includes Part D.

Keep in mind that if you enroll for Part D after this period and you do not have creditable coverage, you will incur a late penalty. However, if you enroll within 63 days of dropping creditable employer coverage, you will not have to pay a penalty.

If you enroll in Original Medicare, you may want additional coverage with a Medicare Supplement Plan (Medigap). For this, you will use your  Medicare Supplement Open Enrollment Period. This is a 6-month window starting on your Part B effective date.

What happens if I miss my Initial Medicare Enrollment Period?

If you don’t sign up during the initial enrollment period, you may end up facing some consequences:

Missing the Part B IEP:

If you don’t enroll in Part B during your IEP, you’ll probably have to pay a late enrollment penalty. The penalty is an additional 10% of the premium for every 12 months you should have had Part B but didn’t enroll. Keep in mind that you will still be paying the Part B if you join a Medicare Advantage Plan.

To avoid a penalty, either sign up for Part B during the Initial Enrollment Period or wait until the General Enrollment Period. The GEP begins January 1st and ends March 31st (coverage, when you enroll during this period, starts on July 1st).

If you are currently enrolled in a group health plan, you may enroll in Part A or B at any time and will not incur a penalty.

Missing the Part D IEP:

If you don’t have creditable* Part D prescription drug coverage and miss your IEP, you’ll pay a penalty with your Part D premium. The penalty is 1% of the national average premium every month that you went without coverage for prescription drugs.

You are exempt from penalties if you lost your prescription drug coverage in the last 63 days, or if you qualify for a low-income subsidy.

*creditable coverage is coverage that pays at least as much as Part D

Missing the Part A IEP (if you don’t qualify for premium-free Part A)

If you do not have enough work credits (40 quarters/10 years) you will pay a penalty of 10% the premium for twice the number of years you could have bought the coverage but didn’t.

When is the Medicare General Enrollment Period?

If you don’t qualify for a special enrollment period and missed your IEP, you can sign up for Original Medicare during the General Enrollment Period (GEP). This begins on January 1 and ends on March 31. Moreover, your coverage won’t start until July 1–meaning there will a gap in your coverage.

However, even though you can enroll for Original Medicare during the GEP, you will still pay a penalty if you missed your IEP.

Keep in mind that the GEP only applies to Original Medicare. If you want a Medicare Advantage plan or Medicare Part D coverage, you’ll have to wait for the Annual Enrollment Period.

What is an Annual Enrollment Period?

If you miss your initial Medicare enrollment period, you can use the next Annual Enrollment Period to join a plan. The AEP begins on October 15 and ends December 7 and is specifically for Medicare Advantage plans (Part C) and prescription drug plans (Part D).

What can you do during this period?

  • Switch to Medicare Advantage from Original Medicare.
  • Switch Medicare Advantage plans if you’re currently enrolled in one
  • Switch back to Original Medicare from a Medicare Advantage Plan.
  • Enroll in a Medicare Part D Prescription Drug Plan
  • Switch Part D plans if you’re currently enrolled
  • Drop Part D coverage completely (without penalty) if you have creditable coverage through an employer or another source

Medicare Advantage Disenrollment Period

If you are unhappy with a Medicare Advantage plan you chose during the AEP, you may drop that plan and switch to Original Medicare without penalty. You can do this in the Medicare Advantage Disenrollment Period (ADP) between January 1 and February 14. During this period, you can return to Original Medicare and add Part D coverage if you wish to.

During the ADP, you cannot:

  • Switch to Medicare Advantage if you currently have Original Medicare.
  • Switch Medicare Advantage plans if you’re currently enrolled in one
  • Switch Part D plans if you’re currently enrolled in one

What if I Move or have other Special Circumstances?

If you have special circumstances that keep you from enrollment or accessing coverage, you may qualify for a Special Enrollment Period. Moving outside the plan’s service area will qualify you for a Special Enrollment Period. SEPs usually begin the month the qualifying event occurs and usually last for 60 days.

What qualifies you for a SEP?

  • Change in residence
  • Involuntary loss of creditable coverage
  • Gain or loss in Medicaid eligibility
  • Gain or loss in low-income subsidy
  • Switching from an employer group to an MA plan
  • Enrollment was based on incorrect information
  • A non-resident becomes lawfully present in the U.S.
  • Dropped Medigap for the first time and is still in a trial period
  • Severe chronic illnesses

If you are unsure if you qualify for a SEP, give us a call. If you would like to learn about life insurance options for any high-risk condition, click here.

Help with your Medicare Enrollment Period Choices

You’ve worked hard to receive your Medicare benefits. In order to take full advantage of them, it’s important to understand how Medicare works. This, of course, includes knowing when the appropriate enrollment periods are.

Take a minute to make sure you know when it’s the right time for you to enroll. If you need any help at all, don’t hesitate to contact us!