On the surface, enrolling in Medicare is a relatively simple procedure. In fact, in some cases, you are automatically enrolled, and you do not really need to do much of anything.
However…
That is not always the case.
Medicare is a federal health insurance plan that has four parts. There are also several qualifying rules you also need to know about whether you are enrolling for the first time or want to make changes to your existing benefits.
Those parts of Medicare are:
Part A. Covers inpatient hospital stays, skilled nursing facility and hospice care, and some home health care.
Part B. Covers some doctors' services, outpatient care, medical supplies, and preventive services. Medicare Part A and Part B are also referred to as Original Medicare.
Part C. Also known as Medicare Advantage. These plans are sold by private insurance companies that will provide additional coverage above what Part A and Part B cover. Part D coverage is also often included.
Part D. Focuses exclusively on reducing the cost of prescription drugs and many recommended shots or vaccines. Private insurance companies also sell Part D policies.
Let's start with the basics of how initial enrollment occurs for Medicare Part A and Part B, often referred to as Original Medicare.
There are two instances where you are automatically enrolled in Part A and Part B coverage.
If you don't meet these eligibility conditions, you can sign up for Medicare during your Initial Enrollment Period (IEP) by contacting Social Security.
Your IEP is the 7-month period that begins three months before you turn 65, your birthday month, and ends three months after the month you turn 65.
You can sign up for Part A any time after you turn 65, and coverage starts six months back from when you sign up or when you apply for Social Security or the Railroad Retirement Board benefits. Also, note that coverage cannot start earlier than the month you turned 65.
The date your coverage starts depends on which month you sign up during your IEP. However, coverage always starts on the first of the month.
Just like Part A, you are automatically enrolled in Medicare Part B if you already receive Social Security benefits or the Railroad Retirement Board.
The difference between Part A and Part B is that you will have to pay a premium for part B coverage, and for this reason, you will be given the option of opting out of Part B.
If you are not automatically enrolled in Part B, most people typically sign up for Part B coverage during their IEP as well.
This is important: If you do not sign up for Original Medicare (and Part D) when you are first eligible, you might pay more for coverage in the form of a late enrollment penalty when you do decide to enroll.
After your IEP ends, you can sign up for Part A and Part B at other times of the year if you meet certain requirements.
Here is what you need to know about those other enrollment periods.
Original Medicare General Enrollment Period. You can also enroll between January 1 and March 31 each year. One drawback if you sign up during this period is that your Part B coverage will not begin until July 1. This could leave you with a coverage gap and higher premium costs. You can qualify for the General Enrollment Period only if you did not sign up when you were first eligible AND you are not eligible for a Special Enrollment Period
Annual Enrollment Period (AEP). This begins October 15 and runs through December 7 every year. If you missed your IEP, you could enroll during this timeframe, but you may have to pay a late permanent enrollment penalty for as long as you have coverage.
Anyone can make changes during the AEP. You can switch from Original Medicare to a Part C plan or vice versa. You can also switch from a Part C Medicare Advantage plan with drug coverage to one without. You can also drop or join a Medicare Part D prescription drug plan as well. Beneficiaries also have the option of switching to a new plan from their current insurer or switching to a new insurer
Any changes to coverage go into effect on January 1 of the following year.
While it is always a good idea to review your Medicare coverage annually, there is no reason to make a change if you are happy. In most cases, your existing Medicare plan will automatically renew on January 1.
General Enrollment Period. People who have not signed up for Part B can instead enroll from January 1 to March 31. If you choose this option, your Part B coverage will start on July 1, and you may have to pay a penalty for later enrollment.
Medicare Supplement Insurance Open Enrollment Period. To minimize costs that are not covered through Original Medicare, some opt to purchase additional coverage. These are known as Medicare Supplement or Medigap plans.
The best time to buy a Medicare Supplement plan is during a six-month enrollment period that starts the first day of the month you turn 65. To qualify for the Medicare Supplement plan, you must also have signed up for Medicare Part B. Also, you cannot buy a Medicare Supplement plan if you have a Part C Medicare Advantage plan.
During this Open Enrollment Period, you cannot be denied the right to buy a Medicare Supplement plan of your choosing, if you are enrolled in Medicare Part A and Part B, and you live in the plan's service area. An insurance company may not deny you enrollment in a Medigap policy based on any pre-existing conditions during your OEP. Pre-existing plans vary from policy to policy, so this is one of the questions you will need to ask if it becomes an issue.
You have the option to buy one of these plans later, but you will no longer have the shield of a guaranteed issue right. The plan provider may require you to undergo medical screening to qualify for coverage or deny you coverage.
Part B Special Enrollment Period (SEP). You can enroll in Part B without penalty after 65 if you can show you or your spouse had group health coverage from an employer after turning 65. The Part B SEP runs eight months from when you or your spouse stopped working and receiving coverage.
Special Enrollment Periods (SEP). Sometimes, you can sign up for Part A and Part B without paying a late enrollment penalty. SEPs are limited in duration, and if you do not sign up during your SEP, you will have to wait for the next General Enrollment Period, and you might have to pay a monthly late enrollment penalty.
For example, if you have health insurance through a job and you are still working, you can sign up for Part A and Part B any time you have group health plan coverage or you or your spouse (or a family member if you are disabled) is working for the employer that provides your health coverage.
SEPs run eight months after you or your spouse stop working or lose group health plan coverage (whichever happens first). Your SEP starts when you stop working even if you choose other medical coverage that is not Medicare, including COBRA.
People eligible for Medicare based on disability may be eligible for a SEP based on their spouse's current employment. Based on a spouse or family member's current employment, they may be eligible if the employer has 100 or more employees.
You do not qualify for a SEP if your COBRA or retiree coverage ends, you lose your Marketplace coverage, or you have end-stage renal disease (ESRD).
You can enroll in a Medicare Part C or a Part D plan during your IEP. Medicare prescription drug coverage plans are often bundled under Part C plans, so be sure to ask this plan option question before you buy a plan from a provider.
If you do not sign up during your IEP, you can only enroll in Medicare Advantage plans or change your existing coverage at certain times of the year.
The Annual Election Period runs October 15 through December 7 each year.
Also, the Medicare Advantage Open Enrollment Period takes place annually from January 1 through March 31. You can make a one-time change to go with another Medicare Advantage plan or switch back to Original Medicare during this time.
New coverage starts on the first day of the month following the month you make a change for both periods.
If you go back to Original Medicare, you can also add a Medicare Supplement plan. But the same rules apply for Medicare Supplement enrollment. If you are not within the six-month window, insurance companies no longer must honor a guaranteed issue right to you.
A Part D Special Enrollment Period lets you delay enrolling in Part D drug coverage beyond age 65 if you have creditable drug coverage from another provider. Creditable is defined as having prescription drug coverage equal to or exceeding what you can get with Part D.
In addition, you can enroll in Part D coverage at any time you qualify for the Extra Help program.
Special Election Periods let you make changes in certain life qualifying situations. In some cases, you may be able to change your Part C or Part D coverage. For example, if you move out of your Medicare plan's service area, or your plan leaves the Medicare program, you are given a timeframe to find a new plan. You may also qualify if you lose your current coverage because you lose your job or leave it for any reason.
Special Election Periods may happen anytime you have a qualifying situation, and you have two months after you lose your coverage to sign up for a new plan.
Your coverage will begin the first day of the month after you sign up.
There is also an Annual Disenrollment Period for people enrolled in Medicare Advantage Plans who want to change to Original Medicare or enroll in Part D coverage. This happens between January 1 and February 14. New coverage begins the first day of the month after you make your changes.
DISCLAIMER: Information is for educational purposes only and should not be construed as an offer of insurance, advice, or recommendation. The information provided is not intended as tax, financial, investment, or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.
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