Over 63 million Americans are enrolled in some form of Medicare plan with the number increasing year over year. Enrollment periods for Medicare can be confusing with most gaining eligibility for Medicare when they turn 65 years old. However, this is not always the case and there are circumstances that can effect a person’s Medicare eligibility, costs, and enrollment period.
Are Medicare Beneficiaries Automatically Enrolled at Age 65?
Foundationally, Medicare is built upon Original Medicare (Part A and B). According to Medicare.gov, there are scenarios where the government will automatically enroll individuals in Original Medicare without any enrollment legwork required by the beneficiary. This may occur when:
- An application for Social Security or Railroad Retirement benefits also serves as a Medicare application.
- Individuals who receive benefits from either of these programs for at least 4 months get automatically enrolled in Medicare Part A and B.
- People who live in Puerto Rico, or outside the United States don’t generally enroll automatically Medicare Part B.
How to Apply for Medicare?
There is a portion of people that won’t qualify for automatic enrollment, so they will need to take steps to apply. Contacting Medicare with questions about applying for Medicare is not the correct route to follow. Medicare will answer questions about benefits, but it’s not the correct government agency to contact with questions regarding an individual Medicare application.
Contact Social Security to apply for or find specific answers to individual questions about their Medicare benefits. The Social Security Administration can determine eligibility and process applications.
To complete a Medicare application or get more information, choose one of these options:
- Download and print Form CMS 40B, complete the application, and mail or fax the completed form to a local Social Security office.
- Call Social Security directly at 1-800-772-1213. TTY users can call 1-800-325-0778.
- Find a local Social Security office with this ZIP code search.
- Past employees and spouses of a railroad can call the Railroad Commission at 1-877-772-5772.
When Should People Complete a Medicare Application?
When it comes to Medicare enrollment, timing matters.
Medicare Eligibility Under 65
A small portion of Medicare recipients qualified before they turned 65 because of a disability. Typically, these younger beneficiaries either received Social Security Disability for 24 months. People who suffer from ESRD or ALS may also qualify for Medicare benefits.
Turning 65 Years Old
Most Americans need to turn 65 and have either been a citizen or legal resident of the United States for the previous 5 years to qualify for Medicare. To get Medicare Part A for free, they must also have a minimum of 10 years of work experience or have a spouse who did. These people can take advantage of a seven-month Medicare Open Enrollment window around their 65th birthday.
This period begins 3 months before the 65th birthday, lasts through the recipient’s birthday month, and extends for 3 more months (for a total of 7 months). For instance, a prospective Medicare beneficiary might turn 65 in June. That person’s Open Enrollment would start at the beginning of March and last until the end of September.
Medicare Late Enrollment Penalties
No law forces anybody to enroll in Medicare. Still, most people worked hard to qualify for these valuable healthcare benefits, so they will take advantage of them. According to Medicare.gov there are scenarios where a late-enrollment penalty will be imposed for people who signup after their initial Open Enrollment period. The late-enrollment penalty works like this:
- The government will charge an extra 10 percent for every 12 months the beneficiary could have enrolled in Medicare Part B but did not.
- Late enrollees will need to pay this additional fee each month they pay their Medicare Part B premium.
- The standard Part B monthly premium for 2022 is $170.10, so somebody who enrolled a year late could need to pay over $200 this year in penalties.
For more information reference the Medicare Enrollment Chart found on Original Medicare Parts A and B Enrollment.
Creditable Coverage Can Delay Medicare Enrollment Without Penalties
Since most people don’t have to pay a premium for Part A, they generally enroll as soon as they are eligible. People who can demonstrate proof of creditable coverage can delay enrolling in Part B while they still have coverage.
Creditable coverage must offer benefits at least as good as Medicare offers. This kind of coverage generally comes from employer- or union-sponsored group health plans. According to the VA, Medicare does not count VA benefits as creditable coverage for Part B, though it does count for Part D prescription plans.
Be sure to check with the benefits representative for the health insurance company to make sure that the plan qualifies. After confirming health insurance coverage, contact Social Security or follow the instructions in the Welcome to Social Security welcome packet.
Suppose the Medicare card has already come in the mail. In that case, the prospective beneficiary might need to send that card back to get a replacement that only shows enrollment in Medicare Part A and not Part B. Be sure to write down the Medicare number in case Medicare Part A would help cover a service, like a hospital visit, before the new card arrives.
How to Apply for Medicare Part D
Private health insurance companies offer Part D. A licensed health insurance agent can help Medicare beneficiaries compare Part D plans, balancing the premium against any current prescriptions the beneficiary needs. If healthcare needs or the plan changes, Medicare recipients can switch plans during the annual Part D Open Enrollment in the fall.
Why Enroll in Part D During the Initial Enrollment Period?
Medicare Part A and Part B only cover prescriptions in certain circumstances. For instance, these two parts of Original Medicare will generally cover medication administered in a hospital or other facility by a healthcare professional.
Neither Part A nor Part B will help pay for typical prescription medication from a pharmacy. To cover most prescriptions, Medicare beneficiaries will need a Part D prescription plan during their Initial Enrollment period unless they have other creditable coverage.
Failure to enroll in Part D at this time can result in penalties without other creditable coverage, such as employer-based health insurance, VA drug coverage, or a Medicare Advantage plan that includes prescription benefits. Unlike Medicare Part B, VA benefits can help beneficiaries avoid late-enrollment penalties. Keep records documenting any of these benefits to show to Medicare to avoid a penalty.
Medicare calculates these penalties as the number of months a beneficiary was eligible but without Part D times one percent of Part D’s base beneficiary premium, or $33.37 for 2022. As with late enrollment penalties for Medicare Part D, an increase in premiums will increase the penalty, and this is a lifetime penalty. Besides the penalties, the lack of drug coverage might leave a Medicare beneficiary responsible for the cost of prescriptions.
When to Sign Up for Medicare Supplements or Medicare Advantage
Medicare Advantage and Medicare supplemental insurance come from private companies. A local health insurance agent can help Medicare recipients compare plans and complete the applications.
When is the Best Time to Sign Up for Medicare Supplements?
Medicare supplements, also called Medigap plans, have a six-month Open Enrollment period. For most people, this begins the month of their 65th birthday. During this period, insurance companies can’t deny applications or charge more for people with pre-existing health conditions.
After the Guaranteed Issue period ends, beneficiaries won’t have these protections. According to Medicare.gov this is the best time to enroll in Medigap. Insurers may take applications several weeks before an applicant’s Open Enrollment begins, so taking proactive steps can ensure that the supplement starts on the first day of Medicare enrollment.
Certain circumstances may give Medicare beneficiaries Guaranteed Issue rights after Open Enrollment ends. Examples include moving out of the service area of a Medicare Advantage plan or losing job-related group health insurance. These extra Guaranteed Issue rights generally last 63 days.
A licensed health insurance agent can help beneficiaries understand the specific rules, compare policies, and sign up for Medicare supplements.
When to Sign Up for Medicare Advantage Plans
Beneficiaries can only enroll in Medicare Advantage plans at specific times. According to Medicare.gov the Initial Enrollment Period begins 3 months before the month of the 65th birthday, lasts through the birthday month, and extends for 3 more months.
After Initial Enrollment, applicants must wait until the annual Open Enrollment each fall to enroll in or switch to Medicare Advantage. Some circumstances may open up a Special Enrollment period, like losing another Medicare Advantage plan by moving out of its service area.
Why is it Important to Apply for Medicare at the Right Time?
For Original Medicare and Medicare Part D, the government may impose penalties for people who miss their Initial Enrollment period. Some people can delay Medicare Part B and Part D enrollment without penalties if they have creditable coverage.
During the Initial Enrollment period, beneficiaries should also enroll in a Medicare supplement or Medicare Advantage plan to enjoy Guaranteed Issue rights and avoid a lapse in coverage. Note that the prescription benefits included in many Medicare Advantage plans can replace the requirement for a separate Part D plan.
Prospective beneficiaries should start gathering information about various programs and learning how to apply several weeks before their 65th birthday to enjoy the best coverage as soon as Medicare benefits begin.
Sources:
1. Ready to sign up for Part A & Part B, Medicare.gov.
2. Social Security office locator Social Security Office Locator, Social Security
4. Part B Late Enrollment Penalty, Medicare.gov.
5. 3 Ways to Avoid the Part D Late Enrollment Penalty, Medicare.gov.
6. Understanding Medicare Advantage & Medicare Drug Plan Enrollment Periods, Medicare.gov.
