When to Sign Up for Medicare 101

Medicare is one of the most popular health insurance programs in the United States. While most people know that the insurance is primarily for retirees, how this program works or even when to sign up for Medicare is not always clear.

What are the Different Parts of Medicare?

Medicare is a federal health insurance program that’s available for people 65 years of age and older, people who have disabilities, and people with certain medical conditions. It is broken into several Parts:

  • Part A (Hospital Insurance)
  • Part B (Medical Insurance)
  • Part C (Medicare Advantage)
  • Part D (Prescription Drug Coverage)

Together, Medicare Part A and Part B are known as Original Medicare. There is also Medigap, or Medicare Supplement Insurance, which is insurance coverage someone can purchase from private insurance companies to fill in the gaps of their Medicare coverage.

Who Is Eligible?

While exceptions apply, according to the official site, US citizens and certain non-citizens are generally eligible to enroll in the program under one the following circumstances:

  • Someone is 65
  • Have a disability
  • Have end-stage renal disease (ESRD)
  • Have ALS (Amyotrophic Lateral Sclerosis, Lou Gehrig’s disease)

When Should You Sign Up for Medicare?

Most people who enroll in Medicare do so as soon as they are able to, although some people choose to wait until later. There are several Medicare enrollment periods when someone can enroll into the program, so long as they meet the eligibility requirements for health coverage.

Initial Enrollment Period (IEP)

People’s first opportunity to enroll into the program is known as the initial enrollment period. It lasts for 7 months, starting 3 months before someone’s 65th birthday.

Open Enrollment Period

Occurring annually between October 15 – December 7, this period allows people to change their current Plans, according to the official site.

Medicare Advantage Open Enrollment Period

This period occurs annually between January 1 – March 31, according to Medicare.gov. During this period, someone who already has a Medicare Advantage Plan (Part C) can:

  • Switch to a separate Part C Plan
  • Switch to Parts A and B (Original Medicare)
  • Join a separate Part D Plan (Prescription Drug Plan)

Medigap Open Enrollment Period

Medigap’s open enrollment period is a 6-month window that starts as soon as someone has Part B coverage and they’re at least 65.

General Enrollment Period

Every year between January 1 – March 31 is the general enrollment period, when anyone who is eligible to enroll can enroll. If the person is not eligible for a special enrollment period, people may have to pay a monthly late-enrollment penalty.

Special Enrollment Period (SEP)

In certain cases, people may be eligible for a special enrollment period, a period outside of other enrollment periods when they can sign up for coverage. People may be exempt from late-enrollment penalties during this time.

What Happens If You Don’t Sign Up for Medicare?

Not enrolling in Medicare during the initial enrollment period can result in a late-enrollment penalty. This penalty varies on several factors, including the specific Medicare Part and the amount of time someone has delayed enrollment.

  • For Medicare Part A (Hospital Insurance), monthly premiums may increase 10% when someone has to buy Part A (not to be confused with premium-free Part A) and they did not enroll during their initial enrollment period. These premiums apply for twice the number of years someone was eligible but didn’t enroll in the program. For example, if someone was eligible for Medicaid but waited 3 years to enroll, they would have to pay these increased premiums for 6 years.
  • For Medicare Part B (Medical Insurance), monthly Part B premiums increase 10% every year if someone delayed enrolling in Part B while they were eligible. That means the penalty increases the longer someone delays enrolling. Someone will pay for this increased rate until their Part B coverage ends.
  • For Medicare Part C (Medicare Advantage), there is no specific late-enrollment penalty that applies.
  • For Medicare Part D (Prescription Drug Coverage), monthly premiums increase 1% for every single month someone who was eligible for Part D delayed enrollment. These increased premiums apply for as long as someone has Part D coverage.
  • For Medigap (Medicare Supplement Insurance), there is generally no specific penalty for late enrollment. That said, rates are usually better the earlier someone applies for coverage. In some cases, people may not be eligible for certain Medigap Plans if they wait past their Medigap Open Enrollment Period.

These penalties might be waived under special circumstances, such as in cases where the individual qualifies for Extra Help, which is a Medicare program that helps low-income individuals help pay for Part D coverage.

Is It Mandatory to Go On Medicare When You Turn 65?

Depending on the circumstances, someone may be automatically enrolled into Medicare Part A and/or Part B.

  • If someone already has Social Security benefits or Railroad Retirement Board (RRB) benefits, in most cases they will automatically be enrolled in Original Medicare the first day of the month of their 65th birthday.
  • If someone lives in Puerto Rico and gets Social Security or RRB benefits, they’ll automatically be enrolled into Part A, but not Part B, when they turn 65.
  • If someone is disabled and under 65 but otherwise eligible for Medicare due to their disability, they will be automatically enrolled into Original Medicare. This occurs after the person receives disability benefits from Social Security or certain disability benefits from RRB for 2 years (24 months).
  • If someone has ALS and also receives Social Security or RRB disability benefits, they will automatically get Original Medicare. This occurs after the person receives disability benefits from Social Security or certain disability benefits from RRB for 2 years (24 months).
  • If someone is receiving disability benefits and has Part A only, they will be automatically enrolled into Part B when they turn 65.

Someone may still have to pay premiums in these circumstances, which is why someone who does not want Part B coverage has to manually start a process to refuse coverage. People will not be automatically enrolled into Part C or Medigap, so people who want these types of coverage will need to start the enrollment process themselves.

Who Do I Contact for More Information?

Navigating Medicare benefits, insurance plans, beneficiaries, retirement benefits, current employment and employer coverage, and knowing when coverage starts can all be confusing. For those who are wondering if they should contact Social Security, their local Social Security office, or Medicare, this helpful PDF should help point them in the right direction.

 

Disclaimers – This article does not constitute professional, legal, financial, health care, or medical advice. While we strive to provide accurate information, given the nature of the subject, we cannot guarantee full accuracy of this article.