Medicare’s Enrollment Periods
Unlike the health insurance you may have had before turning 65, Medicare has multiple “enrollment periods.” Each of these windows is designed for people in a specific situation. You may be new to Medicare, changing residences or trying out an Advantage plan to see how you like it. There is likely to be a defined window, an “Enrollment Period,” for every situation that you encounter.
Well-intended as they are, Medicare’s various enrollment periods can confuse many people. This can lead to missed deadlines, late-enrollment penalties, periods without any insurance coverage or paying higher premium rates to buy the policy you want. You can avoid Medicare snags by understanding the enrollment periods and knowing if you qualify for them.
Below is a summary of the Medicare enrollment periods you may encounter.
The Initial Enrollment Period (IEP)
Seniors who are enrolling in Medicare for the first time usually do so during their Initial Enrollment Period (see below for the exceptions). This seven-month window includes your birth month and the three months before and after the month you turn 65. If you were born in May, your IEP extends from the beginning of February to the end of August during the year you turn 65. If you turn 65 in December, your IEP extends from the beginning of that year’s September to the end of the following year’s March.
You must pay attention to these dates. Unless you qualify for a Special Enrollment Period, missing this window could leave you without coverage and expose you to a penalty for late enrollment when you do join. Most seniors have no trouble in being aware of these dates. If you have been receiving Social Security benefits for four months or more before your 65th birthday, you will automatically be enrolled in Medicare. Several months before Social Security recipients turn 65, the Medicare system will contact them with information about Medicare coverage.
Unless they decline part or all of the coverage, these people will automatically get Part A and Part B Medicare insurance starting the first day of the month they turn 65. No action on their part is necessary. If your 65th birthday happens to be on the first day of the month, Part A and Part B will start the first day of the prior month. Part B premiums will automatically be deducted from the Social Security benefit received each month.
Seniors who are not receiving retirement benefits from Social Security must proactively sign up during their Initial Enrollment Period. It is best to do this as early as possible. If you wait until the month you turn 65, or the three months after, your coverage will be delayed. This might cause an insurance “gap” if you do not have other protection. Do not wait for any government or private agency to contact you; apply to the Social Security system during the 3 months before your 65th birthday. Do this by applying online at SocialSecurity.gov, going to your local Social Security office or by calling Social Security at 1-800-772-1213. Even if you wish to decline some benefits, it is important to act during the Initial Enrollment Period. Not doing this may result in penalties when you do enroll.
Workers or their spouses who reach age 65 and are still covered by employment-based insurance plans may want to opt-out of Medicare Part B outpatient coverage and avoid paying premiums. However, you should almost certainly enroll in Medicare Part A, the hospital insurance. For most people, Part A is a premium-free entitlement. If you are qualified, there is no cost for Part A coverage (Parts B, C and D all carry premium payments).
Often, it is wise to enroll in Part B when you turn 65 regardless of employment status. Workers and their spouses who have health insurance from an employer may be able to delay enrolling in Part B and temporarily avoid the premiums, but be cautious about this. Be certain that you understand this private, job-related insurance. Work-based policies often stop covering workers when they become Medicare eligible, even if they remain employed.
Besides avoiding possible penalties, seniors who choose Original Medicare have another reason to pay careful attention to Initial Enrollment. If you apply during the IEP, you are guaranteed acceptance by any of the Medigap letter plans available. You cannot be turned down because of preexisting medical conditions and you will pay the standard premium. Depending on your circumstances, this may not be available in the future.
The General Enrollment Period
If you have turned 65 and missed the seven-month Initial Enrollment Period, it is still possible to enroll in Medicare. However, you must wait until the next Medicare General Enrollment Period (January 1 to March 31), and your coverage will start July 1. Be aware that you could be uninsured if you do not have other protection, and you might incur a penalty for late enrollment. If you miss the right enrollment period, Late Enrollment Penalties (LEPs) can be imposed and these get higher the longer you wait. It is important to keep this in mind; do not allow the correct enrollment period to go by without taking action.
Special Enrollment Periods (SEPs)
For most people, Part A is a free entitlement, and there is no late-enrollment penalty. This is not true for Parts B, C and D where late enrollees are penalized. However, there are certain situations when you can sign up for those Medicare programs without paying a late enrollment penalty. These opportunities are known as Special Enrollment Periods (SEPs). SEPs are only available for a limited time. If you allow this to expire, you must wait for the next General Enrollment Period, and you may have to pay a monthly late enrollment penalty, just as with the Initial Enrollment Period described above.
Several circumstances can make a person eligible for a Special Enrollment Period. Those seniors who initially declined Medicare coverage because they were covered by work-related insurance are one example. Seniors must take action when that work-related coverage ends. This SEP is designed especially for these older workers. The window lasts for eight months after the work-related insurance has ended. During that period, the qualified senior may enroll in the Medicare program of their choice without any penalty. If this opportunity is missed, the individual must wait until the next General Enrollment Period, probably without insurance and possibly incurring a penalty for late enrollment.
If you are uncertain about your qualifications for a SEP, consult an insurance professional or Medicare itself. Availability may depend on the specifics of your situation. Besides the example cited above, here are some other situations that may qualify-
- You have returned to the United States after residing in a foreign country.
- You have moved in or out of a skilled nursing facility or long-term care facility.
- You have lost coverage from an employer or union.
- You have moved to a new residence and your old plan is not available there.
The situations described above relate mostly to first-time enrollment or changes in personal circumstances (moves, termination of private insurance, etc.). Each year, there are also several opportunities to rethink and change existing Medicare coverage. Those enrollment periods are described below.
The Open Enrollment Period (aka the Annual Enrollment Period or AEP)
Existing Medicare beneficiaries may use the Open Enrollment Period to review their current coverage and shop around for plans that better suit their needs. Each year, seniors will be exposed to a blizzard of advertising reminding them of the Open Enrollment Period, running from October 15 to December 7. Most of this advertising encourages people to sign up for Medicare Part C, an Advantage Plan. However, at this time, you can apply for any Medicare program, including Parts A, B, C and D.
Remember the important caution cited above. During your Initial Enrollment Period, if you choose Original Medicare and apply for one of the Medigap letter plans, you are guaranteed acceptance by that plan at the standard premium rate. This may not be true after the Initial Enrollment Period has expired, so be sure that you understand the rules as they apply to you.
Every fall, the Centers for Medicare & Medicaid Services (CMS) and private insurers publish coverage changes (if any) for the following year. In October, Medicare also releases its star rankings for Advantage Plans and Part D drug plans. This system assigns a quality score to Medicare Advantage organizations, rating them on a 5-star scale, based on the plan’s performance on several benchmarks. The best plans receive a five-star rating.
Most often, seniors use the AEP to shift into one of the Advantage plans. This trend is growing, and it is predicted that Advantage membership will be over half of all Medicare beneficiaries in a few years. However, there are other options available in this open period. Here is a summary of what you can do during the Annual Enrollment Period-
- Change from one Medicare Advantage plan to another (regardless of whether either plan offers drug coverage or the plans’ star ratings).
- Change to an Advantage plan from Original Medicare.
- Change from an Advantage plan to Original Medicare (both Parts A and B).
- Enroll in a Part D prescription drug plan, change from one Part D plan to another or opt-out of Medicare prescription drug coverage completely.
Changes made during the AEP go into effect on January 1 of the next year.
The Medicare Advantage Open Enrollment Period
Do not confuse the Medicare Advantage Open Enrollment Period (MAOEP) with the fall Medicare Enrollment Period. The MAOEP runs from January 1 to March 31 of each year. If you are already in an Advantage plan and not satisfied with it, you can switch to a different Medicare Advantage Plan, no matter what its star rating is or whether or not it includes drug coverage.
You can also change from Medicare Advantage to Original Medicare and add Part D. However, the MAOEP is a one-way street. You cannot change from Original Medicare to Medicare Advantage during this period, although you can do this during the fall Medicare Open Enrollment Period. That enrollment period (aka the Annual Election Period or AEP) runs from October 15 to December 7 every year.
The Medicare Supplement Enrollment Period
This term refers to the six-month period that starts on the first day of the month that you turn 65 and have enrolled in Part B. During this window, you cannot be denied coverage at the standard premium rate for any Medigap policy sold in your state. Your past medical history does not affect this. If you wait until your Medicare Supplement Enrollment Period is over, you could be refused coverage or charged higher premiums.
That is why it is important to pay attention to this enrollment period. The best time to purchase a Medigap plan is unquestionably during the Medicare Supplement Enrollment Period that begins on the first day of your 65th birth month.
Special Enrollment Periods for Life Events
Many life events may qualify a person for a Special Enrollment Period that allows them to start or change Medicare insurance coverage without penalty or restriction. These events may include changes in residency location, becoming eligible or ineligible for Medicaid, returning to the United States, even getting out of jail.
If you have any reason to think that one might apply to you, consult a Medicare insurance expert or the Medicare system itself. You can do this by going to your local Social Security office or by calling Social Security at 1-800-772-1213.
The Medicare Advantage Trial Period
Although not an enrollment period, you should know about the Advantage Trial Period. If you join a Medicare Advantage Plan and are disappointed, you have one year to change back to Original Medicare and buy a Medigap policy without medical underwriting. There are two circumstances in which you can use this Medicare Advantage Trial Period option-
- If you chose an Advantage plan when you first joined Medicare, during the first year of membership, you can switch to Original Medicare and buy any Medigap policy sold in your state. You must apply for a Medigap policy no more than 60 days after your Advantage plan coverage ends.
- If you dropped a Medigap policy to join an Advantage plan for the first time, you have one year to change your mind and return to Original Medicare. If you act within that time, you can purchase the same Medigap policy you had without restrictions. As above, you must apply for the Medigap policy no more than 60 days after your Advantage plan coverage ends.
The Five-Star Advantage Plan Enrollment Period.
Medicare’s star rating system for Part C Advantage plans and Part D Prescription Drug Plans as described above. Each year, Medicare attempts to identify the best-performing plans using information from satisfaction surveys and other sources to give overall performance ratings to plans. Five-star plans are the top-rated organizations. These ratings change each year, giving consumers some way to shop for the best value.
To make these ratings meaningful, Medicare created the Five-Star Advantage Plan Enrollment Period. This program provides a very long window of opportunity to move to the best quality care. It extends from December 8th of one year to November 30th of the following year. During that time, you can change from any Medicare plan to any five-star Advantage plan available in your area. The new plan must be rated five stars. The fact that other enrollment periods are closed does not affect the five-star rated Advantage or Prescription drug plans. You can use this opportunity only once during each December 8 to November 30 period.
This SEP is Medicare’s attempt to steer people into the most satisfactory Advantage plans and to encourage plans to meet the highest possible standards of care. The December 8 to November 30 window means that it is possible to join a five-star plan at any time of the year.