Enrollment in Medicare is limited to certain time periods, as outlined and managed by the federal government via the Centers for Medicare & Medicaid Services (or CMS.)
Here we will explore when those occur, why you should care, and what you can do to take advantage of them.
Medicare Enrollment Periods: Your Initial Enrollment Period (IEP):
Your Medicare IEP takes place in a seven month window around your 65th birthday. For most people, it represents the first time you are eligible for Medicare coverage. IEP begins the three months before your birth month; it includes your birth month; and continues through the three months after. During this period, if you are already receiving social security benefits you will be automatically enrolled in Medicare Part A (hospital insurance) and B (medical insurance). Together, Parts A & B are referred to as "Original Medicare." Generally speaking, Original Medicare covers the costs related to hospitalization after certain deductibles are met and with certain limitations; as well as about 80% of your medical costs.
If you aren't receiving Social Security benefits when you turn 65, you'll want to contact your local social security office at the start of your IEP to enroll in Original Medicare. Helpful hint: It's always a good idea to try to take care of your Original Medicare enrollment prior to your birthday, even though your IEP extends after that date.
There is a premium cost associated with Part B, so you may decide to wait to enroll in Part B if you have other coverage that will be continuing after your turn 65 and that coverage is deemed acceptable by CMS to justify the delay. For example, in most cases you may continue with coverage through your employer, if you aren't ready to retire. But you do not want to delay your Part B enrollment without other coverage. If you do, you will likely incur lifetime penalties when you eventually do enroll.
This IEP is also your enrollment period for enrolling in your prescription drug plan, also referred to as a Part D plan. (You will want to do so, since delaying your Part D enrollment may also result in lifetime penalties.) Part D plans have a monthly premium cost, and are sold by private insurers. Or, instead of purchasing a Part D plan, you might choose to enroll in a Medicare Advantage Plan. Medicare Advantage plans, provided by private insurance companies under contract with the federal government, cover everything Original Medicare covers. Most also offer expanded coverage and robust additional benefits, and these plans almost always include your prescription drug coverage as well. Medicare Advantage Plans come with a monthly premium, and require you to pay co-pays and co-insurance for some services. But they also offer the peace-of-mind of "out of pocket maximums," or limits to what you will have to pay annually in hospital and medical costs.
Medicare Advantage plans "replace" original Medicare, but you are required to enroll in Original Medicare before you can enroll in a Medicare Advantage plan. Regardless of what coverage you choose, your IEP for Original Medicare and Medicare Advantage Plans is wrapped around the triggering event of your 65th birthday. It's a good rule of thumb to contact a licensed Medicare agent about 90 days before your 65th birthday do ensure you've covered all your bases.
NOTE: For disabled individuals under age 65, your IEP occurs when you first become eligible for Medicare. You are eligible after receiving 24 months of receiving Social Security Disability Income (SSDI). You will automatically be enrolled in Original Medicare starting with your 25th month. Your IEP for enrolling in a Medicare Advantage Plan or in Part D prescription drug coverage includes the 3 months prior to eligibility, the month you become eligible, and the three months after. You will have another IEP (called IEP2) when you turn 65.
Medicare Enrollment Periods: Your General Enrollment Period (GEP):
You can use a GEP to sign up for Original Medicare if you missed signing up during your IEP. The GEP runs from January 1 though March 31 every year, with coverage beginning on the first day following the month of your enrollment, in most cases. But enrolling during the GEP is not ideal because of the delayed effective date. You will probably owe a late-enrollment penalty if your sign up during the GEP.
If you use the GEP, you can sign up for a Medicare Advantage plan during the subsequent period of April through June, with coverage to start July 1. Technically, this is called a Medicare Advantage Initial Coverage Election Period, or ICEP. An ICEP occurs when you have initially become eligible to enroll in a Medicare Advantage plan due to your recent Part B enrollment, whenever that eligibility occurs outside of your IEP.
Medicare Enrollment Periods: The Annual Enrollment Period (AEP):
The Medicare AEP occurs every year from October 15 through December 7. During AEP, you can change your Medicare Advantage Plan or Prescription Drug Plan for the following year. Your current Medicare Advantage plan will send you an Annual Notice of Changes (ANOC) just prior to AEP so that you can review what your premiums and benefits will be for the upcoming year. You can then compare your current coverage with other plans that will be available in your market.
If you choose a new plan, you need to enroll before December 7 and by enrolling, you will automatically be disenrolled from your prior plan.
NOTE: If you've only previously had Original Medicare, you may also use AEP to enroll in a Medicare Advantage Plan for the first time. For those who are staying with Original Medicare (instead of enrolling in a Medicare Advantage plan,) AEP can also be used to select a new Part D plan. However, AEP is not an period that can be used for enrolling in Original Medicare.
To help with decision-making during AEP: plan to contact your licensed Medicare insurance agent sometime during the month of September to make an appointment to review your options. They can help you decide if it's in your best interest to make changes for the coming year and if so, can assist with your enrollment.
Medicare Enrollment Periods: Open Enrollment Period (OEP):
The Medicare OEP runs from January 1 through March 31 every year. OEP offers an opportunity for Medicare Advantage beneficiaries to change to a different Medicare Advantage Plan, or to return to Original Medicare. Only one change can be made during OEP, and this enrollment period is only available to those individuals who are enrolled in a Medicare Advantage plan as of January 1. Changes take effect the first day of the month following the date the request for a change was made. It's important to note that per CMS, licensed Medicare agents may not solicit beneficiaries at any time during OEP to make this change. So if you want to make a change to your plan during this time, you'll need to reach out for help.
About Special Enrollment Periods (SEPs):
SEPs occur when a specific life event triggers an opportunity to add or change Medicare Coverage. SEPs apply both to Original Medicare and to Medicare Advantage/Prescription Drug coverage enrollment, but not in the same ways. The rules for SEPs vary accordingly. We will take a look at the two most common SEPs in depth, and then review others that apply in unique circumstances.
Special Enrollment Periods (SEP)-Employer coverage after age 65: As mentioned earlier, you may choose to delay your enrollment in Medicare when you turn 65 if you have other coverage through an employer or a spouse's employer. In this situation, so long as you've had continuous employer coverage that has been deemed acceptable by CMS, you can delay your Medicare enrollment and will avoid Part B penalties. Later, your retirement date will trigger an eight month SEP to enroll in Part A (if you haven't already) and in Part B.
Your retirement date also opens up a 60 day SEP (which is technically called an Initial Coverage Enrollment Period, or ICEP) to enroll in a Part D plan (if you choose to stay with Original Medicare) or instead, a Medicare Advantage plan.
A very important note related to your SEP after employer coverage ends: You will want to enroll in Original Medicare--and to set up your Medicare Advantage plan or drug coverage--to begin the date your employer coverage ends. This will ensure you avoid all penalties, meet all enrollment guidelines and, importantly, avoid any lapses in your health care coverage. In order to make this happen, start the process of your enrollment or begin working with an agent about three months prior to your retirement date.
Special Enrollment Periods (SEP)-Moving: Medicare Advantage plans and Part D plans are available based on the county where you live. When you plan a move out of your current county; whether into or out of the state you now live; you will likely need or want to make a change. You can take advantage of an SEP due to a move if the plan you currently have is not available in the area you are moving, or if there are plans available in the new area that you could not consider previously. Your Medicare Advantage SEP occurs when your address changes, and is open for 60 days. You can visit the Medicare website to see plans available in your new area, or contact a licensed Medicare agent for help.
Some other SEPs:
Other life events that can trigger Medicare SEPs include when you:
Enter or leave a rehabilitation facility or nursing home
Become eligible for Medicaid, or experience a change in your Medicaid eligibility status (Medicaid is coverage based on income)
Become eligible for or have a change in your Extra Help status (Extra Help is assistance with prescription drug costs and is income-based)
Involuntarily lose coverage offered by an employer or union, or your Medicare plan type is eliminated from your area
Have the opportunity to enroll in a Medicare 5-star rated plan
A word about enrollment and Medicare supplement plans:
Medicare supplement plans are one way to augment the coverage you receive from Original Medicare. They are an option if you are not interested in a Medicare Advantage plan, because you cannot have a supplement plan and Medicare Advantage plan at the same time. Specifically, supplement plans are insurance policies that cover the hospital and medical costs you incur as a result of the gaps with your Original Medicare coverage, including your deductibles and 20% co-insurance. Because of this, they are often called "Medigap" plans.
Medicare supplement plans don't have annual enrollment periods, but when you apply is still very important. If you're new to Medicare, you will have a six-month Open Enrollment Period for a supplement plan. During this time, you cannot be denied the ability to purchase the plan; nor can you be charged more for your policy; due to your current or past health issues. This Open Enrollment Period is tied to your Part B start date, whether that is your 65th birthday, or upon retirement, or after you enroll using a GEP.
You may also qualify for a Medicare supplement plan with "guaranteed issue"--or without medical underwriting--under other very specific and special circumstances, such as when your current plan is eliminated for reasons beyond your control, or when you relocate to another state, for example.
You can apply for a Medicare Supplement plan anytime outside of your Open Enrollment window, or a qualified guaranteed issue period, but you might not be approved to purchase one based on medical underwriting.
In closing:
We have shared a lot of information, but there is one key takeaway regarding Medicare enrollment periods: Many people find that the best way to navigate the sometimes-complicated Medicare enrollment web is to rely on a knowledgeable and licensed Medicare insurance agent. Services are usually available at no cost to you. Find someone you trust, and set an appointment about 90 days before you turn 65. After that, you can reach out and get guidance as you move forward and encounter new life circumstances such as retirement, a move, or a change in your financial situation.