There is often confusion on how to enroll in Medicare, the options that are available and when can a person sign up. Part of this comes from online information and articles where these options were merged.
They are two separate kinds of coverage. Let's provide clarification on the different enrollment rules for each.
First, a look at Medicare the federal-level medical insurance program. People normally become eligible when they reach age 65 if they had not qualified prior to 65 for Social Security benefits because of a disability. Note: Enrollment through any of the following eligible periods is processed by Social Security not by Medicare.
Initial Eligibility Period (IEP): People qualify for this upon reaching 65 and it lasts for seven months. They can then sign up during:
- any of the three months before the month of eligibility (become 65). If they select one of these months, their Medicare coverage would be effective the first of the month they are 65. Coverage for a person whose birthday is the first day of a month will begin the first of the previous month.
- the month they turn 65. Coverage will be effective the first day of the next month.
- either of the three months after eligibility. Doing this results in different coverage dates:
+ enroll one month after 65 – first day of second month after the person enrolls.
+ enroll two or three months after 65 – first day of the third month after they enroll.
Special Enrollment Period: In a situation where someone continued to work after age 65 and then decided to enroll, they qualify for an up to eight-month period to sign up. Using this SEP:
- when still on an employer plan or during the first month after leaving the group plan.
- means coverage will begin the first day of the month they enroll or the first day of any of the following three months they select.
Note: When someone is in this situation, I recommend calling their local Social Security office and making an appointment with a retirement person to enroll in Medicare.
A couple special things to be aware of when eligible for a SEP:
During the appointment, ask the retirement person for Form CMS-L564. Take it to your employer to fill in the dates you were covered on the company medical benefit plan. When it's signed, take it back to the SS office. This form qualifies a person for this SEP and means they avoid Part B’s late enrollment penalty, which can add 10% to the cost of Part B.
The SS system will make their Part A effective date retroactive six months.
General Enrollment Period: If a person did not enroll during the IEP or SEP, he will have to wait to enroll in Part B. This could and has happened when a person left employment and elected to continue the group plan coverage with COBRA. In this situation, when COBRA ends they have to wait to enroll in Medicare Part B the first couple months after the next January 1. Coverage, however, would not start until July 1. A person in this situation can enroll in a stand-alone Prescription Drug Plan but would not have any coverage for the 20% of outpatient expenses Medicare does not pay.
Let's look at the types of insurance plans to pay treatment expenses Medicare does not pay. There are two types of what I like to call Medicare Health Plan a person can enroll in. Both are purchased from a private company:
Medicare Supplement: A person who selects this type can receive treatment from any provider in any state who agreed to participate with Medicare and thus accept the reduced level of payment for any approved treatment/service they provide. Medicare normally just pays them 80% of the approved amount.
Medicare Supplement plans, sometimes call a MediGap plan, are approved for use in CT by the DOI. A person in CT can (normally) enroll/change their plan any time for coverage the 1st of the next month. Other states have different enrollment and underwriting rules
These plans have “lettered” names. A has the least coverage, B, C., etc. have more. The use of letters can be confusing since the parts of Medicare also have letter names.
Any Supplement with the same letter from any of the approved companies has identical coverage. However, there can be considerable variation in the monthly cost companies charge for their plan. Here in CT, the DOI approves plan cost.
The second type is a Medicare Advantage Plan (MA), which are also purchased from a private company. A person who selects this type receives, at a minimum, coverage for everything original Medicare does. A couple points on MA plans:
An MA company has a yearly contract with Medicare, is paid a fixed monthly payment for each person who enrolls and administers all the medical treatment a person receives. Plans usually include medications and are then call a MAPD. Individuals usually pay the company a monthly cost.
Plans cover additional benefits such as an annual physical (Medicare does not) and usually offer discounts on or options to buy benefits, such as fitness, dental, vision and hearing not in original Medicare.
All treatment is received from providers in the company’s network.
Availability is based on the county a person lives in. Here in CT, some MA companies offer plans but do not offer all options in all counties.
If an individual is interested in a Medicare Advantage plan, there are different election periods in which they can enroll. Medicare has assigned the following priority to these periods:
The Initial Coverage Election Period: This occurs when a person is first eligible for Medicare. They can elect a Medicare Advantage plan or a MA plan with prescription coverage (MAPD).
Note: There is also an enrollment period at the same time for the person who wants to stay on original Medicare and buy a stand-alone Prescription Drug Plan. It is called an Initial Enrollment Period.
The Medicare Advantage Open Enrollment Period: This option will again be available for 2019. It occurs from January 1st to March 31st and allows a person who was dissatisfied for some reason with their current Medicare Advantage (MA) plan to make a change. They can elect a new MA or return to original Medicare and select a stand alone Prescription Drug Plan.
Special Election Periods: These are for different kinds of situations such as when a person moved to a different state.
Annual Election Period: A period each year in the fall to change coverage for January 1. This is currently October 15 to December 7.
Open Enrollment Period for Institutionalized Individuals: A special period for an individual who is entering or leaving a long-term care facility.