To get Medicare benefits, a person must enroll in the federally regulated program. Some people may be automatically enrolled, while other people must enroll during certain time periods.
Knowledge of the Medicare enrollment periods is useful in order to make decisions about plan changes, prevent the loss of healthcare coverage, or avoid incurring financial penalties.
This article discusses the Medicare enrollment periods and what each one entails. It also looks at penalties and costs.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
There are several Medicare enrollment periods, including:
- initial enrollment period (IEP)
- general enrollment period (GEP)
- open enrollment period (OEP)
- special enrollment period (SEP)
During each of the enrollment periods, a person can take different actions, including signing up for original Medicare (Part A and Part B), changing plans, or enrolling in new ones.
The IEP begins 3 months before a person turns 65, includes the birthday month, and continues for 3 additional months.
For example, a person born on November 5, 1955, would have an IEP from September 1, 2020–February 28, 2021.
During these 7 months, a person can sign up for original Medicare, which includes Part A hospital insurance and Part B medical insurance. A person can also enroll in Medicare Part D, prescription drug coverage, during this period.
In addition, a person may choose to enroll in Medicare Part C, also called Medicare Advantage, rather than in original Medicare. The Advantage plans provide an alternative to original Medicare, and offer at least the same basic coverage.
The GEP is from January 31–March 31 each year. If a person did not enroll in original Medicare during their IEP, they can do so during the GEP.
During the GEP, a person can also change their Advantage plan, or switch from an Advantage plan to original Medicare. However, a person cannot go from original Medicare to an Advantage plan.
In addition, a person can make only change during the GEP.
The OEP is from October 15–December 7, each year. During this time, a person can make changes to their healthcare coverage.
This OEP is also known as the annual enrollment period (AEP), and a person can switch between Advantage plans, or change from original Medicare to an Advantage plan.
A person enrolled in original Medicare can also enroll or drop the Medicare Part D plan, which is prescription drug coverage.
Annual notice of change
Each September, Medicare sends out the Annual Notice of Change (ANoC). This document explains the upcoming plan amendments and may help a person decide on changes they want to make during the OEP.
During the Medicare Advantage OEP from January 1–March 31, a person can change from an Advantage plan to original Medicare, as long as they are already enrolled in Medicare Advantage.
A person call also switch between Advantage plans, or enroll in a Part D prescription drug plan.
Medicare allows SEPs under certain circumstances. The type of changes a person can make, and the rules surrounding the changes, are different for the various parts of Medicare, and the SEP covering it.
A person can use this online tool to find out if they qualify for a SEP.
During a SEP, a person can enroll in original Medicare if they are eligible because they are insured with a union, or through a group health plan. A person is also eligible if they are employed or their spouse is employed.
The SEP for original Medicare lasts 8 months, which includes the month after the end of a person’s group health plan, or a person’s employment.
Advantage plans or Part D
A person can make changes to their Medicare Advantage plans or to their Part D prescription drug coverage during a SEP, in the following circumstances:
- A person changes their location by moving to a new address or returning to the United States from abroad.
- A person loses their current healthcare coverage because they no longer qualify for Medicaid, or have left their employment.
- A person enrolls in an alternative health plan offered by an employer or union.
- A person is released from prison.
If a person has moved into or away from an institution, such as a skilled nursing facility, they can also enroll in or make changes to their Medicare Advantage plan and Part D drug prescription plan, or they may return to original Medicare.
The SEP time period for changes to Advantage plans, Part D coverage, or original Medicare is generally 2 months.
5-star special enrollment
Medicare assigns performance ratings to plans based on performance and quality. The ratings vary between 1–5 stars, with five stars being the best rating.
A person can change to a 5-star plan only one time, between December 8–November 30.
Depending on the changes a person makes during enrollment periods, there could be associated costs or penalties.
For example, if a person chooses to switch from an Advantage plan with drug coverage to a 5‑star Medicare Advantage plan without drug coverage, they may receive a Part D late enrollment penalty if they have to wait until their next enrollment period to get the coverage.
If a person does not enroll during their IEP, they may receive a late enrollment penalty if they enroll during the OEP.
Part A late enrollment penalty
Most people receive premium-free Medicare Part A because they have paid sufficient quarters. However, if a person has to pay for Part A, and does not get it when they are initially eligible, they may receive a penalty.
Typically, the penalty means their monthly premium will increase by 10% for double the years the person did not have Part A. For example, if a person is eligible for Medicare for 5 years before they enrolled, they may have to pay the higher premium for 10 years.
Part B late enrollment penalty
The Medicare Part B penalty increases with the amount of time a person does not have Part B coverage and continues for as long as they are enrolled in Part B.
The penalty is generally a premium increase of 10% for every year a person was eligible but did not enroll in Part B.
Part D late enrollment penalty
A person may have to pay a late enrollment penalty for Part D if they do not have prescription drug coverage for a continuous period of 63 days or more after their IEP. The prescription drug coverage must be creditable or be either Medicare Part D or a Medicare Advantage plan such as a PPO or HMO.
The late enrollment penalty depends on the length of time a person does not have the coverage. Medicare calculates the penalty as 1% of $32.74, which is the national base premium in 2020. The amount is then multiplied by the number of full uncovered months, and the total rounded to the nearest $.10 and added to the Part D premium.
Medicare enrollment periods provide an opportunity for people to enroll in, or review or change, their Medicare coverage. Annual changes to Medicare plans are announced each September.
If a person delays enrolling in certain parts of Medicare, they may receive penalties.