I think that one of the most confusing aspects of the dealing with the government and Medicare is the Medicare Open Enrollment Period.
For this reason, I am going to go through each section of Medicare and explain the Open Enrollment Period
My goal is to de-mystify it so that you can make sense of when you can apply for Medicare and when you cannot…because these decisions have an impact on the cost of the Medicare programs you join.
Video Overview of Medicare Open Enrollment Period
Medicare Part A and B
Let’s start with the Medicare parts you are probably most familiar with…
- Medicare Part A-hospitalization coverage
- Medicare Part B-doctor’s visits and durable medical equipment
For most of us, you will become eligible to enroll in Part B “starting the first day of the month you turn 65” and will be enrolled in Part A automatically.
This means if you were born on March 17, 1947, and will turn 65 on March 17, 2012, the Medicare Open Enrollment Period for Medicare Part B begins on March 1, 2012.
You will receive a card in the mail from Medicare before this date. Now if you wish to opt-out of Part B you can, but otherwise you will start being charged the Medicare Part B premium as of your birthday.
As for Part A premiums, most people receive Medicare Part A for free so long as they paid Medicare taxes while working.
Note: The only people who will need to sign up for Parts A and B will be those who will are still working at age 65. If you are still working you will not receive Part And B automatically.
Initial Enrollment for Parts A and B
Below you can see the Medicare Open Enrollment Period for Parts A and B. It consists of the three months before the month you turn 65 and concludes the three months after the month you turn 65…for a total of 7 months.
However, the important thing to note is if you delay in signing up there will be a delay in coverage, as the chart below shows.
Now, let’s say that you didn’t sign up when you were eligible, for whatever reason. You can sign up for Medicare Part A and B on January 1st through March 31st every year, but we warned that even if you sign up in January…
- Your coverage does not come into effect until July 1st
- You will have to pay a higher premium for Medicare Part B
Part A and Part B Premium Penalties
If you don’t sign up when you are first eligible, then you will have to pay a 10% penalty. In the case of Part A, if you delay enrolling for 3 years you will have to pay the 10% premium penalty for 4 years.
In the case of Part B, you have to pay a 10% penalty for every 12-month period you do not have enroll. So if you delay for a 24 month period you have to pay an additional 20% premium…FOR LIFE!
Medicare Supplement Insurance (Medigap) Open Enrollment Period
A Medicare Supplemental Insurance Plan pays the 20% of your Medicare Part B costs that Medicare does not.
Upon reaching age 65, you have 6 months of a Medicare Open Enrollment Period that starts the first month you hit age 65 and enroll in Medicare Part B to obtain your Medigap policy.
This six month period features one tremendous advantage…it gives you the right to buy any Medigap policy offered in your home state without regard to your health situation. So for those with a serious pre-existing condition this is a vital element to securing your health insurance as you seek to age in a healthy fashion.
Medicare Advantage Plans (Part C) and Medicare Prescription Drug Coverage (Part D)
You have the ability to purchase a policy…or change coverage you already own…under the following circumstances:
- When you turn 65 or first become eligible for Medicare
- During the open enrollment periods…October 15th to December 7th [changes will take place on January 1st] or January 1st to February 14th.
- You move…and if you move your current policy may not be available to at your new address. This is why this provision is permitted.
- You enter a long term care facility or nursing home
- You become eligible for Medicaid or qualify for Medicare Extra Help to assist in your prescription drug costs
Note: There is a penalty if you do not join a Medicare Prescription Drug plan when you first eligible, and you will in all likelihood have to pay that penalty for as long as you own the policy.
This is why these Medicare Open Enrollment guidelines are so important to know about.
What I have done is sought to demystify the Medicare Open Enrollment Process…but unfortunately the problem is that the rules do change from time to time.
The best options for you to avoid any problems as you begin to reach 65 is to contact Medicare directly so that you can be appraised of all of the most recent information.
And I will do my best to keep you updated as well.