When you start approaching Medicare eligibility, you have to start thinking about your New To Medicare Enrollment Periods. One of the most important time frames to consider is when you first become eligible.
You need to know these periods because if you don’t do you might have a coverage gap or face financial penalties. Let’s take a look…
Initial Enrollment Period
When you’re first eligible for Medicare, you have a 7-month Initial Enrollment Period to sign up for Part A and/or Part B.
The Initial Enrollment Period begins 3 months before the month you turn 65. It continues in the month you turn 65 and ends 3 months after that.
If you aren’t automatically enrolled, you can sign up for Part A any time during or after your Initial Enrollment Period starts. Your coverage start date will depend on when you sign up. If you have to buy Part A and/or Part B, you can only sign up during a valid enrollment period.
General Enrollment Period
Sign up for Part A and/or Part B during the General Enrollment Period between January 1–March 31 if both of these apply:
- You didn’t sign up when you were first eligible.
- You aren’t eligible for a Special Enrollment Period (see below).
If you are allowed to sign up during the General Enrollment Period, your coverage will start July
Special Enrollment Periods
You may have the chance to sign up for Medicare during a Special Enrollment Period (SEP). If you’re covered under a group health plan, you have a SEP to sign up for Part A and/or Part B anytime as long as:
- You or your spouse (or family member if you’re disabled) is working.
- You’re covered by a group health plan through the employer or union based on that work.
You also have an 8-month SEP to sign up for Part A and/or Part B that starts at one of these times (whichever happens first):
- The month after the employment ends
- The month after group health plan insurance based on current employment ends
Usually, you don’t pay a late enrollment penalty if you sign up during a SEP. It is very important to understand these New To Medicare Enrollment Periods to avoid financial penalties.
COBRA and retiree health plans aren’t considered coverage based on current employment. You’re not eligible for a Special Enrollment Period when that coverage ends. This Special Enrollment Period also doesn’t apply to people who are eligible based on having End-Stage Renal Disease (ESRD).
If you have a Health Savings Account (HSA) based on your or your spouse’s current employment, you may be eligible for an SEP. To avoid a tax penalty, you should stop contributing to your HSA at least 6 months before you apply for Medicare. You can withdraw money from your HSA after you enroll in Medicare to help pay for medical expenses. If you’d like to continue to get health benefits through an HSA-like benefit structure after you enroll in Medicare, a Medicare Advantage Medical Savings Account (MSA) Plan might be an option.
You may qualify for a Special Enrollment Period if you’re a volunteer, serving in a foreign country.
Annual Enrollment Period
Every year, Medicare’s open enrollment period is October 15 – December 7.
What you can do during the Open Enrollment Period (OEP):
- Anyone who has (or is signing up for) Medicare Parts A or B can join or drop a Part D prescription drug plan.
- Anyone with Original Medicare (Parts A & B) can switch to a Medicare Advantage plan.
- If you have a Medicare Advantage plan, you can drop it and switch back to Original Medicare (Parts A & B).
- Anyone with Medicare Advantage can switch to a new Medicare Advantage plan.
- You can switch to a new Part D prescription drug plan if your current plan has gabs.
Why should you consider re-evaluating your current coverage?
Each year, insurance companies can make changes to Medicare plans that can impact how much you pay out-of-pocket. This might affect your monthly premiums, deductibles, drug costs, and provider or pharmacy “networks.”
A network is a list of doctors, hospitals, or pharmacies that negotiate prices with insurance companies. They can also make changes to your plan’s “formulary” (list of covered drugs). It is a good idea to re-evaluate your plan each year to make sure it still meets your needs.