Important Dates in the World of Medicare
Key Takeaways:
You become eligible for Medicare at age 65. The Initial Enrollment period is a 7-month period that covers 3 months before the month you turn 65, the month you turn 65, and 3 months after the month you turn 65.
General Enrollment occurs between January 1st and March 31st. This enrollment period is used to sign up for Medicare coverage if you missed your initial enrollment window. July 1st is when coverage begins for those who signed up using the general enrollment period.
Open Enrollment is available from October 15th to December 7th. During open enrollment you can change between Medicare Advantage and Traditional Medicare plans, or you may select a different Medicare Advantage plan or change your prescription plan.
Penalties will apply if you do not sign up for Medicare when you become eligible. The penalties are significant – 10% each year for Part B and 1% per month for Part D – because a permanent price increase is applied to your monthly premiums for the rest of your life.
You will encounter many important dates and deadlines once you peer into the world of Medicare and you will want to attend to these matters earlier than later – each day 11,000 people turn 65 and “get in line” to sign up for benefits. We hope this article will help you stay on top of things and have a smooth experience signing up for Medicare.
Initial Enrollment Period: When you turn 65 years old you become eligible to sign up for Medicare. This initial enrollment period is 7 months long. 3 months before the month in which you turn 65, the month during which you turn 65 and 3 months after the month during which you turned 65. If you want to make sure you do not go without coverage, you will find following table handy:
An interesting exception to the rule is that if your birthday falls on the first day of the month, Medicare coverage will start on the first day of the month before your birthday. For example, if your birthday falls on October 1st and you sign up during months of June, July, or August – your coverage will start on September 1st.
If you start drawing your Social Security benefits before you turn 65 – Social Security Administration will automatically enroll you into Medicare Part A (Hospitalization insurance) when you turn 65. If you do not qualify for Social Security benefits or have not yet filed for your benefits to begin – you will have to sign up for Part A manually.
General Enrollment Period: If for whatever reason you missed your Initial Enrollment Period you will have a second opportunity to sign up for Part A, Part B (Medical insurance), Part D (Drug coverage) and supplement plans between January 1st and March 31st. If you sign up during this period, your coverage will begin on July 1st.
Open Enrollment Period: Lasts from October 15th through December 7th and during this period you may change to Medicare Advantage or back to Traditional Medicare plans, are also allowed to switch to a different Medicare Advantage plan or change/enroll/drop prescription plans.
Enrolling while covered by employer’s plan: If you are still working and have health insurance when you turn 65, you should sign up for Medicare Part A when you become eligible – this will prevent any penalties for signing up late – given that you are not contributing to a Health Savings Account. If you are still working, contributing to a Health Savings Account (HSA), and would like to continue to do so – then you should delay signing up for Medicare. Medicare does not qualify as a High Deductible Health Plan (HDHP) and enrollees are not eligible for Health Savings Accounts. If you do not qualify for free Medicare Part A, then sign up as soon as you do qualify. You will have 8 months after you terminate your employment to sign up for Medicare Part B.
Medigap Open Enrollment Period: Is a period that lasts 6 months after the first day of the month you turn 65 AND are also enrolled in Part B. Which means that if you have creditable coverage (from spouse, job, etc.) you do not have to sign up for Medigap. If you discontinue your creditable coverage from other sources, your 6-month period will start in the month you sign up for Part B. Some states have continuous open enrollment periods; if you live in Connecticut, Massachusetts, or New York you are not limited to the 6-month period and can sign up year-round.
Medicare Advantage Open Enrollment Period: Dates within this enrollment window coincide with the General Enrollment Period – January 1st through March 31st. During this period, you may enroll in a drug plan, switch to a different Medicare Advantage Plan, or switch back to Traditional Medicare. However, during this period, you cannot switch from Traditional Medicare to Medicare Advantage Plan or sign up for a drug plan under Traditional Medicare.
Special Enrollment Periods: This enrollment window runs each year from October 15th to December 7th and allows you the opportunity to change to another Medicare Part D or Medicare Advantage plan, outside of the annual Open Enrollment period. Special Enrollment Periods are only permitted under special circumstances – such as, moving outside of your plan’s service area or entering a long-term care facility. To find out if your situation qualifies for the Special Enrollment Period, this article will allow you to see the various ways you might be eligible.
5-Star Special Enrollment Period: While it sounds like something from a fantasy football rulebook, it is not nearly as exciting. This is your once-a-year window of opportunity between December 7th and November 30th to switch you’re your current Medicare Advantage plan to a five-star Medicare Advantage plan that is available in your area. Only Medicare Advantage and Medicare Prescription Drug Plans plans are eligible for 5-Star Special Enrollment Period. Plans are rated based on feedback from health care providers and satisfaction surveys from enrollees.
Annual Notice of Change: Each September your plan provider will mail you a notice explaining all changes that will take place within your plan. Changes in doctors, coverage, costs, etc. will be listed in this mailing and it is important to review it so you would know if plans you are currently enrolled in fits your needs – if your doctor will no longer be included in your plan – you will have to find a new plan or switch doctors.
Penalties: If you do NOT sign up for Medicare when you become eligible you may be subject to penalties that could increase your premiums. The worst part is that this penalty applies for the remainder of your life.
If you delay purchasing Part B your monthly premium will go up 10% for each 12-month period that you could have had Part B coverage. Which means that if you delayed purchasing Part B for 2 years your premiums will increase by 20% and in most cases will remain subject to this penalty for as long as you have Part B coverage.
Each delayed month with Part D will increase your future premiums by 1% of what Medicare calls “National Base Beneficiary Premium” which is $33.37 in 2022. So, if you delayed Part D coverage by 5 months, your penalty will be 5% multiplied by $33.27 rounded to nearest 10 cents.
These penalties can also be avoided if you had creditable coverage during the time of delay. In other words, if you are still working and have employer provided coverage, Medicare will not force you to purchase coverage from them too (given that your coverage qualifies as creditable). While Medigap coverage does NOT impose penalties, you should enroll during open enrollment period to receive the best rates.
Other Tips: When you receive your Medicare benefits card – make sure it has the corrected effective date. The same goes for your Part D coverage – check that your enrollment date is correct. Finally, make sure that correct Supplement plan is listed.
Coming up next is the last article in our blog series, Health Savings Accounts (HSAs) and Medicare. In this article you will get a better understanding of how to use your HSA once you go on Medicare. Additionally, if you want further guidance about becoming a better Medicare plan shopper, you can watch our online course video, The Retirement Continuum – Medicare.
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