The start of a person’s Medicare coverage depends on when they enroll in the program. There are several enrollment periods during which a person can sign up for Medicare.
This article explains what Medicare is, the different enrollment periods, and when Medicare coverage starts. It also looks at the costs and possible late penalties.
Medicare is the federal healthcare program in the U.S. that funds hospital and medical care for people who are either 65 years old and older, under the age of 65 years with certain disabilities, or living with end stage renal disease.
In addition to federal funding, a combination of Social Security, Medicare taxes, and premiums funds Medicare.
Medicare has four parts, with each part providing coverage for specific health services:
- Part A provides hospital health coverage.
- Part B provides outpatient medical coverage.
- Part C offers an alternative way to receive original Medicare (Part A and Part B) benefits through a Medicare-approved private health plan.
- Part D provides coverage for prescription drugs.
Medicare coverage may start at different times, depending on when a person enrolls in the program. There are several different Medicare enrollment periods.
Initial enrollment period (IEP)
A person is generally eligible for Medicare when they turn 65. They can enroll in the program during their IEP, which lasts a total of 7 months. It begins 3 months before their birth month, includes their birth month, and then extends for a further 3 months.
If a person enrolls in Medicare during the first 3 months of their IEP, their coverage will start on the first day of their birth month.
For example, if a person turns 65 on July 20 and enrolls in Medicare in April, May, or June, their coverage starts on July 1. However, if a person’s 65th birthday is on July 1, and they enroll during the first 3 months of their IEP, then coverage would start on June 1.
During their IEP, a person can enroll in various Medicare programs, including original Medicare, Medicare Part D, or a Medicare Advantage plan.
General enrollment period (GEP)
If a person chooses to delay enrollment during their IEP, they can sign up for Medicare during the GEP, which runs from January 1 to March 31 each year.
During the GEP, a person can make one change to their Advantage plan, including dropping it and enrolling in original Medicare. However, during a GEP, a person is not permitted to switch from original Medicare to an Advantage plan.
Open enrollment period (OEP)
Another enrollment period, known as the OEP, runs from October 15 to December 7 each year. During it, a person can change from original Medicare to an Advantage plan or switch between Advantage plans.
Throughout the OEP, a person can also choose to enroll in or drop an existing Part D drug prescription plan.
Special enrollment period (SEP)
People can enroll in original Medicare or make changes to their Medicare Advantage plans or their Part D plans during an SEP, depending on certain conditions.
If a person enrolls during an SEP, Medicare does not generally apply any late signup penalty. This online tool may help a person find out whether they qualify for an SEP.
A person who gets Social Security or Railroad Retirement benefits is automatically enrolled in original Medicare.
However, other people will need to enroll manually. They can do this by:
- applying online at www.ssa.gov
- calling their local Social Security office
- calling the general Social Security number at 800-772-1213
- mailing a letter to Social Security, including details such as their name, Social Security number, and date of enrollment
In case a person’s Medicare enrollment application is lost, and to avoid the chance of getting a subsequent late enrollment penalty, a person should keep physical proof of the date they enrolled in Medicare. They can do this by:
- writing down the names of any Medicare representatives whom they have contacted by phone
- using certified mail to send the enrollment forms and requesting a return receipt
- printing out and saving the confirmation page for an online application
If a person does not enroll in original Medicare during the various enrollment periods, they may face a penalty charge.
Many people are eligible to enroll in premium-free Medicare Part A and can enroll during or after their IEP without incurring a penalty.
However, if a person paid taxes for less than 10 years, they may have to pay a monthly premium. In 2021, the maximum premium is $471 per month. In addition, a person must enroll during their IEP or face a penalty, which is generally 10% of the basic premium.
Medicare will calculate the penalty based on twice the number of years a person delayed enrollment.
A person must enroll for Medicare Part B during their IEP or face a penalty if they delay enrollment to the GEP. Medicare calculates the late enrollment penalty for Part B at 10% of the basic Part B premium, which is $148.50 in 2021.
A person’s premium increases by 10% for every 12 months they delay signing up, and it generally continues for as long as they are enrolled in Part B.
For example, if a person became eligible to enroll in Medicare Part B in 2016 but chose to delay enrolling until 2021, Medicare calculates the penalty as follows:
- Multiply the 2021 standard monthly premium of $148.50 by 10%, resulting in $14.85.
- Multiply $14.85 (the 10% amount) by the total number of missed 12-month periods, which is five.
- Multiply $14.85 by the 5 years, which results in the sum of $74.25.
- Add a penalty of $74.25 to the monthly premium of $148.50.
Based on that example, a person’s new monthly cost in 2021 would be $222.75.
A person’s Medicare coverage generally starts after they enroll during their IEP, with coverage commencing either on the first day of their birth month or the first day of the previous month.
Delaying enrollment in Medicare Part A or Part B may incur penalties, which, in some cases, may last as long as the person is enrolled in Medicare.