Medicare is a wonderful product but it can also be confusing from the rules they implement. Understanding some of the basics will help take that sting out of this new journey we will all embarc on when we turn 65. I think one of the key things to understand when it comes to Medicare is the enrollment periods.
Enrollment periods are critical when it comes to your coverage, it’s also one of the more complicated things about Medicare. I will go over the enrollment periods, and what they mean for you, to help you understand the timing of your healthcare coverage.
Initial Enrollment Period (IEP)
The initial enrollment period revolves around your 65th birthday. Everyone turning 65 MUST enroll in Medicare even if you currently have major medical. This period lasts 7 months. That includes 3 months prior to your 65th birthday, the month of your 65th birthday, and 3 months post your 65th birthday. Lets use July 1st as your birthday. You can enroll in Medicare starting March 1st of that year. You must enroll by September 31 of that year.
It doesn’t matter if you enroll in a Medicare Advantage plan or Original Medicare with Supplements – you just have to enroll. When enrolling if you are currently still working and have qualified medical coverage, you need only enroll in Part A (Hospital). If you do not have qualifying health coverage, you must also enroll in Part B (Doctors). When you retire from your job, you will lose your employer sponsored health coverage. From the last day you work, you have 30 days to enroll in Part B. If you go beyond 30 days you need to have COBRA coverage or you will be penalized per day you don’t have coverage. Upon signing up with Part B, your COBRA will cease.
You can’t enroll in Part D WITHOUT Part A and B. You can also get Part D with a Medicare Advantage Plan (MA). You do not need to enroll in Part D initially, but you won’t be able to enroll in a Part D plan until the OEP, GEP or a SEP is warranted.
Open Enrollment Period (OEP)
Open Enrollment happens every year starting on October 15th and runs through December 7. When you are in open enrollment, you can change your plans. For example, go from Original Medicare to a Medicare Advantage Plan. You can downgrade your Medicare Advantage Plan to Original Medicare with Medicare Supplements. If you did not enroll in Part D prior, you can enroll now. You can also drop your Part D plan.
General Enrollment Period (GEP)
This period runs from January 1st to March 31st of the following year. This time slot is designed for someone who did not enroll during their initial enrollment period (IEP). You may incur a penalty during this time if you do not qualify for a SEP or didn’t have COBRA coverage for your Part B that you didn’t add during the (OEP).
Special Enrollment Period (SEP)
Special Enrollment Periods can happen anytime throughout the year, pending a qualifying occurrence happens. Things that can trigger a SEP are: you qualify for Medicaid which can pay for or help pay for your Medicare, you move, you go into a long term care facility, you are diagnosed with a chronic illness like diabetes, dementia, heart attack, stroke or other health condition. If one or more of these things occur, you can change your policy. If you have a chronic illness you can qualify for a SNP plan. If you qualified for Medicaid you can qualify for a D-SNP. If you move even across town your current plan may not be available in that area so you may need a SEP to change your plan to one that’s offered in your area.
As you can see, it can be a little confusing. Having the understanding of enrollment periods will help you navigate Medicare when you are able to qualify, and help you avoid penalties. Let’s face it, nobody wants to pay any penalties and when your income is now a fixed limited income every penny counts.
