Health care is complicated, and Medicare is no exception. Knowing when to enroll in Medicare is important because a missed deadline can lead to expensive penalties.
Initial Enrollment Period
In general, you are expected to enroll in Medicare around the time you turn 65. The enrollment period lasts for seven months, covering the birthday month, the three months before, and the three months after.
If you do not enroll in Medicare during the Initial Enrollment Period, you may face a penalty. It’s not a one-time fee, either.
- For Medicare Part B, the penalty is a 10 percent premium increase for each year you delayed enrollment, and it lasts as long as you have Medicare Part B.
- For Medicare Part A, you pay a 10 percent penalty, and the penalty lasts twice as many years as you delayed.
- For Medicare Part D, the penalty is calculated based on time spent without a creditable prescription plan and the national base beneficiary premium.
Late enrollment can also result in coverage gaps.
What About Employer Coverage?
If you still receive coverage through an employer when you turn 65, you may be able to delay your enrollment in Medicare without facing a penalty if the following criteria are met:
- You receive group health plan coverage through an employer.
- The employer has 20 or more employees.
As soon as the employment or benefits end, you have eight months to enroll in Medicare. Do not delay enrollment past this Special Enrollment Period, even if you receive COBRA coverage, or you may face the late enrollment penalty.
What About the ACA Health Exchanges?
Some people have missed the Medicare enrollment deadline because they had insurance through the Affordable Care Act Marketplace and were confused about the requirements. As a result, they were subject to the lifetime penalty for late enrollment in Medicare B.
To address this issue, CMS has announced that it will waive the penalty for certain individuals who were enrolled in Medicare A and a Marketplace plan. To receive this waiver, eligible individuals must act before September 30, 2017.
What If You Miss the Deadline?
If you miss the Initial Enrollment Period and the Special Enrollment Period, you can enroll in Medicare Part A and Part B during the General Enrollment Period, which runs from January 1 to March 31 of each year. Remember that will you face penalties for missing your enrollment deadline.
The annual Open Enrollment Period for Medicare Advantage and Medicare Part D starts October 15 and ends December 7.
What about Medigap?
If you want to enroll in a Medigap plan, you should do so during the Medigap Open Enrollment Period, which lasts for six months starting when you turn 65 and enroll in Medicare Part B. During this enrollment period, you will not be subject to more expensive premiums based on preexisting health conditions.