Understanding open enrollment
Every year, millions of seniors become eligible for Medicare coverage. While some may be automatically enrolled when they turn 65, there are several options for healthcare coverage and not everyone will take advantage of their Medicare eligibility at the same time. Here’s what you need to know about Medicare enrollment periods:
Medicare initial enrollment
You become eligible for Medicare when you turn 65, considered to be retirement age. Upon reaching 65, seniors become automatically enrolled in Medicare Part A, which requires no premium or monthly costs. Because there is no cost associated with Medicare Part A, most seniors choose not to defer enrollment. Part B does require a premium, and some may choose to not sign up for it right away. You can sign up for Medicare during a seven-month period surrounding your 65th birthday – the three months before, the month of your birthday and three months following.
It is possible to forego signing up for Medicare during this time period if, for example, you are still working and covered under your employer’s insurance. A late enrollment penalty may be added to Part B premium rates. This increased rate never decreases. There is another open enrollment period for those who did not sign up in the seven-month period around their 65th birthday that runs from Jan. 1 to March 31 every year.
Once you sign up for Medicare, you don’t need to enroll again. However, you do have the option to make changes to your Medicare plan or enroll in additional coverage options such as a prescription drug plan or Medicare Advantage Plan. Every year, there is a time period in which seniors can adjust their coverage or add more. The open enrollment period for Medicare Advantage Plans and prescription drug plans run from Oct. 15 to Dec. 7.
There are many options for senior prescription drug plans that cover specific medications at certain price points. It is important that you review different plan options before open enrollment if you plan to change your drug plan or enroll in coverage for the first time.
When employer insurance coverage ends
There are some special circumstances under which you can sign up for Medicare after having deferred if you were already covered under your employer. This is called a Special Enrollment Period, and you can sign up for Part A and/or B during an eight-month period after employment ends or employer healthcare benefits expire, whichever occurs first. If signing up during the SEP, you typically don’t have to pay a late penalty. You can also enroll for Medicare Part A or B anytime while you are still covered under your employer’s health insurance.
Annual disenrollment period
Every year, there is an annual disenrollment period that allows seniors to make changes to Medicare Advantage Plans, or Medicare private health plans. The annual disenrollment period runs from Jan. 1 through Feb. 14, and changes can only be made during this time by those who already have a Medicare Advantage Plan.
Seniors with Advantage Plans can add or drop coverage when switching over just Original Medicare (Part A and B), but changes cannot be made for those with only Original Medicare. There are a few options to switch from a plan to a different method of coverage. For example, a person could change from the Medicare Advantage Plan to Original Medicare with a prescription drug plan or just Original Medicare.
Change of residence
There is another time when seniors can make adjustments to Medicare coverage plans or enroll: After changing residences. There is a short, four-month window called the Special Election Period when a person moves out of their plan’s service area. The period begins during the month prior to the permanent move, through the month of the move and the two months after. For many people, moving does not affect Original Medicare but may impact Medicare Advantage Plans or prescription drug plans. If moving out of the area of a Medicare Advantage Plan, seniors will need to switch to a new one.
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