Dear Medicare,
Could you please be more complicated?
Sincerely,
No one at all.
The rules, options and dates around Medicare are crazy! Especially enrollment. But it’s important to know this stuff. Seriously, understanding and getting enrollment right is super important because if you get it wrong, you could end up paying penalties the rest of your life. Yeah, the stakes are that high!
So we’re going to do our best to make it simple (and introduce you to some folks who can help guide you beyond this article.)
Brief Overview of Medicare
Before we get started, let’s make sure we’re all on the same page. Medicare is health insurance for folks over 65 (or people who have a disability and certain diseases) that’s run by the federal government. It comes in a few different parts—kind of like the Stooginfloöginfluuugenfläffer from Ikea comes in “a few” different parts:
- Part A is hospital insurance.
- Part B is medical insurance.
- Part C is also called Medicare Advantage and rolls parts A, B and often D into one plan through a private insurance company.
- Part D is prescription drug coverage.
Parts A and B together are called Original Medicare. People usually have either Original Medicare with Part D and a Medigap Plan added, or they have a Medicare Advantage Plan. Original Medicare gives you more options and control while Medicare Advantage locks you into a specific network of providers.
Eligibility for Medicare
You must meet one of the following basic eligibility criteria for Medicare:
- Be 65 years or older
- Have a disability status (qualifying for Social Security disability insurance)
- Have end-stage renal disease (requiring dialysis or a kidney transplant)
- Have amyotrophic lateral sclerosis or ALS (aka Lou Gehrig’s disease)
How to Enroll in Medicare
Let’s (en)roll!
If you’ve been receiving Social Security payments since at least four months before your 65th birthday, you’ll automatically be enrolled in Original Medicare (parts A and B). The government will send you a welcome packet along with your Medicare cards (don’t expect cookies or anything—it’s the government). At that time, you’ll be given the option to add on Part D and a Medigap Plan or switch to Medicare Advantage.
If you’ve decided to wait to receive your Social Security benefits until later, you’ll need to sign up on your own.
Enrollment Periods
Okay, the first thing to understand is enrollment periods. You have three opportunities to enroll in Medicare for the first time—but one of them comes with a penalty, so pay attention!
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There are six different enrollment periods in total:
- Initial Enrollment Period
- Special Enrollment Period
- General Enrollment Period
- Open Enrollment Period
- Medicare Advantage Open Enrollment Period
- Medigap Open Enrollment Period
Initial Enrollment Period (IEP)
The Initial Enrollment Period (IEP) is your first opportunity to sign up for Medicare. It starts three months before your 65th birthday month and runs through the three months after (total of seven months). To begin, you can sign up for parts A and B. Once you have those in place, you can also sign up for Part D and a Medicare Advantage Plan (if you choose) during this period.
You can enroll online, over the phone, or by contacting your Social Security office.
When you want to use this: If you plan to use Medicare as your health insurance coverage immediately
When you don’t want to use this: If you are currently covered by health insurance that’s of similar value to Medicare (this most often happens when you’re still working and have employer-sponsored health coverage or you’re covered by your spouse’s insurance)
Special Enrollment Periods (SEPs)
Sometimes people qualify for a Special Enrollment Period (SEP) because they have special circumstances like living overseas or something (living in Portugal would be pretty special).
Circumstances that trigger SEPs:
- Your comparable coverage ends (like you leave your job and lose your employer-sponsored health insurance).
- You move back to the U.S. after missing your IEP while living overseas.
- You lose comparable drug coverage.
- Your coverage changes and is no longer creditable (an industry term that means “as much coverage as” Medicare).
- If you experience any changes to your coverage outside your control that mean you need new coverage.
- You move to a new address and your plan isn’t available in that area (this one only applies if you have Medicare Advantage).
There are many little nuances to what triggers an SEP. If you need Medicare and already passed your 65th birthday, talk to a licensed Medicare advisor. This is what they’re trained for! They can look at your situation and figure out if you qualify for an SEP.
- When you want to use this: You missed your IEP because of special circumstances or you had other coverage that ended.
- When you don’t want to use this: When you already signed up during your IEP or you need to switch (or make changes to) your existing plan.
General Enrollment Period (GEP)
If you missed your IEP or SEP, maybe you should deal with your procrastination problem. Kidding. Mostly. (But seriously—you can still get Medicare!) You do get another chance to enroll for the first time during the General Enrollment Period (GEP) which runs from January 1 to March 31. You can sign up for Original Medicare, with the option to add Medigap or Medicare Advantage, as well as drug coverage.
Heads up though. Using the GEP to enroll usually comes with a penalty in the form of higher premiums—and they last for the rest of your life.
When you want to use this: Pretty much never! Remember to sign up during your IEP or SEP. But if you forget, then sign up during the next GEP.
When you don’t want to use this: When you already signed up during your IEP or SEP, or when you want to make changes or switch plans.
Open Enrollment Period (OEP)
Don’t be fooled. The name sounds awfully similar to regular health insurance’s open enrollment period, when anyone can sign up for health insurance—but this is not (repeat not) a time for you to sign up for Medicare for the first time. Medicare’s Open Enrollment Period (OEP) runs from October 15 to December 7, and it’s a time for folks who already have Medicare to make changes to their existing plan or switch plans.
For example, if you have a Medicare Advantage Plan but get annoyed having to use in-network providers, you can drop your Advantage Plan and switch back to Original Medicare.
When you want to use this: If you already have Medicare and need to make changes to your current plan (including Part D) or switch to or from Medicare Advantage and Original Medicare
When you don’t want to use this: If you want to sign up for Medicare for the first time
Medicare Advantage Open Enrollment Period
Yep, there’s more. This one runs from January 1 to March 31 (yes, same dates as the GEP) and also within the first three months you get Medicare. The Medicare Advantage Open Enrollment Period is, you guessed it, just for people with Medicare Advantage plans.
During this period, you can:
- Switch to a different Advantage Plan
- Drop your Advantage Plan and go back to Original Medicare
- Add or drop drug coverage
When you want to use this: If you have Medicare Advantage and want to make changes or switch back to Original Medicare
When you don’t want to use this: If you want to sign up for Medicare for the first time, or if you have Original Medicare and want to sign up for Medicare Advantage
Medigap Open Enrollment Period
Last one, we promise.
If you decide to go with Original Medicare, you’ll most likely want to get a Medigap policy to help cover your out-of-pocket costs. The best time to buy a Medigap policy is during your Medigap Open Enrollment Period, which runs for six months starting the first month you have Part B coverage.
During this period, insurance companies are required by the federal government to cover you—so you can’t be denied a policy because of preexisting conditions. If you wait until later, there are no laws forcing insurers to sell you a policy, so you could be denied. Plans often cost a lot more if you wait. But you can technically buy a policy any time of year—provided you can get an insurance company to actually sell it to you.
| Medicare Enrollment Periods | ||
|---|---|---|
| Period | When It Happens | Features |
| Initial Enrollment Period (IEP) | 3 months before your birthday month through 3 months after | You can sign up for Medicare for the first time. |
| Special Enrollment Period (SEP) | Varies | This only happens if you have special circumstances. You can sign up for Medicare for the first time. |
| General Enrollment Period (GEP) | January 1–March 31 | You can sign up for Medicare for the first time if you missed your IEP or SEP. Sadly, you will be penalized. |
| Open Enrollment Period (OEP) | October 15–December 7 | You can make changes to your existing plan or switch plans. |
| Medicare Advantage Open Enrollment Period | January 1–March 31 | You can make changes to your Advantage Plan or switch back to Original Medicare. |
| Medigap Open Enrollment Period | The 6-month window starting the first month you get Part B | You can sign up for a Medigap Plan and won’t be denied. |
Enrollment Process for Parts A and B
You sign up for Medicare parts A and B through Social Security. They make sure you’re eligible and have paid into Social Security long enough to qualify for premium-free Part A. There are a few ways to sign up for Medicare parts A and B:
- Online (sign up through the Social Security website)
- By phone (call Social Security)
- In person (visit a local Social Security office)
- Automatic enrollment
Applying online through the Social Security website is the easiest and fastest route. But no matter which way you decide to do it, you’ll need these documents to apply:
- Proof of age (like your birth certificate)
- Proof of U.S. citizenship or legal residency (like your passport or green card)
- Record of employment (like a W-2)
- Any marriage or divorce information
- Any military service information
- Any past Social Security benefit claims
We touched on this earlier, but there is one instance where you won’t have to apply for parts A and B. This is called automatic enrollment, and it happens only if you’ve already been receiving Social Security benefits for four months prior to your 65th birthday.
But if you are automatically enrolled, don’t just sit back on your haunches. You’ll want to consider applying for drug coverage and Medigap or consider whether you want to switch over to a Medicare Advantage Plan.
Enrollment for Medicare Advantage (Part C) and Part D
If you decide a Medicare Advantage Plan works better for your needs, you’ll get an opportunity to enroll in one of the enrollment periods. You’ll also be able to sign up for Part D during these times.
- IEP (if you’re new to Medicare)
- OEP (if you’re changing your plan)
- SEP (if you have special circumstances)
- Medicare Advantage OEP (if you’re switching between Advantage plans)
Start by comparing plans as you would with any health insurance. If you already have doctors and health care providers you like, make sure they’re in the provider network of the plan you choose. Once you find the best plan for your situation, join it by calling the plan provider or visiting their website.
Remember, you must already be enrolled in Medicare parts A and B to get a Medicare Advantage Plan. To sign up, you’ll need to provide your Medicare number and the start dates of your parts A and B coverages.
Delaying Signing Up
If you don’t want to sign up for Medicare at 65, you don’t get to just sit back and ignore everything. You must prove to the government that you have comparable health coverage through your employer or the marketplace—otherwise you’ll get penalized later if you ever want to sign up for Medicare (which you probably will). Proof could be as simple as an insurance card with both your and your employer’s names on it.
Understanding Enrollment Choices
We’ve talked a lot about the different Medicare options and how to enroll in them. Let’s just review the details of those options quickly.
Comparing Original Medicare and Medicare Advantage (Part C)
The main difference between the two is how much control and how many options you have.
Original Medicare: This is parts A and B together. You would usually add a Medigap Plan to help cover out-of-pocket costs and Part D for prescription drugs. You’d have three Medicare cards and would manage these plans separately. You can go to any provider who accepts Medicare.
Medicare Advantage: This is parts A and B plus extra coverages by a private insurer. These often come with a prescription drug plan too. After you sign up for parts A and B and then buy an Advantage plan, all these plans are managed by the private insurer, and you get one card. You are limited to providers within the network set by the insurance company.
Choosing a Medicare Part D plan
There are a few things to consider when you’re picking out prescription drug coverage. One big thing you should know about Part D plans is they have a coverage gap—also called “the donut hole.” Yes, donuts make you think of tasty glazes and sprinkles, but this donut hole is not tasty. In this hole, you pay more for your prescriptions depending on what type of drug they are.
Here’s how it works: Everything is normal up until the limit ($5,030 in 2024)—you pay your copay and your plan pays the rest. Then when you and your plan reach the limit, suddenly you pay a percentage of your drug costs based on the drug type (which usually results in you paying a lot more). Once you’ve reached another out-of-pocket limit ($8,000 in 2024), your plan takes over and pays 100% of everything.
There are plans that cover this donut hole, but they cost more. So, it pays to figure out if you need those extra coverages.
When you’re picking out a Part D Plan, ask yourself these questions:
Do you take medications currently? If you’re on medications, make sure the plans you’re looking at cover those drugs.
Do you take generic drugs or expensive drugs? If you take generic drugs, look for a plan that offers “tiers” where you pay nothing or low copayments for generic drugs. If you’re concerned about your drug costs getting too high, look for a plan that offers coverage in the coverage gap (aka “donut hole”).
Do you have pharmacies you prefer to go to? Make sure the plan allows you to use them. Some plans contract with a network of pharmacies and won’t cover drugs from pharmacies outside it. Some plans have “preferred pharmacies” that offer better prices, which could save you money.
Do you want to avoid penalties? Who doesn’t? Even if you don’t really have drug costs now, you should still sign up for a Part D Plan with low monthly premiums when you are first eligible (unless you already have drug coverage through other health insurance). You’ll avoid the penalties that come with signing up later.
Common Mistakes and How to Avoid Them
With a program this confusing, it’s not surprising that it’s easy to make a lot of mistakes. Here are some common Medicare mistakes you can avoid:
Missing enrollment deadlines: There are a lot of dates to keep track of. But the really important one is your IEP. If you miss it and don’t qualify for an SEP, you’ll have to pay higher premiums for the rest of your life. And keep in mind, the longer you wait, the bigger the penalties get.
Not reviewing coverage options annually: Medicare rules change every year. You need to keep up with them because changes can mean you’re no longer fully covered. A Medicare advocate can keep track of these for you and let you know if you need to adjust anything.
Failing to understand costs and benefits of different plans: Just like with regular health insurance, Medicare plans are different, and depending on your situation, some work better than others.
If you’re thinking about going with a Medicare Advantage Plan, you need to understand that you may not be able to get a Medigap policy if you decide you want to switch back to Original Medicare. Insurance companies are only required to sell you a Medigap Plan during your Medigap Open Enrollment Period. After that, they can deny you coverage if you don’t meet their health requirements (like if you have a preexisting condition). Even if you don’t have medical issues, you may have less options and have to pay more for your plan.
