Trying to make sense of all those Medicare enrollment periods and what they mean for you and your coverage? You’re not alone.

According to a 2012 Report by the Medicare Rights Center, about 700,000 people paid a  late enrollment fee that year. Turns out it’s pretty common to miss your Medicare enrollment period. It doesn’t help much that there is a Medicare initial enrollment period, a Medicare supplement open enrollment period, a Medicare Annual Enrollment Period, and Medicare special enrollment periods.

Sheesh! Who can keep all that straight?

Roughly 12% of Medicare beneficiaries also lacked creditable prescription drug coverage, making them potentially liable for a premium penalty when they later do enroll in a Part D Drug Plan.

That’s about 6 million people who could pay monthly penalties for as long as they have Medicare coverage. That could add up to a lot of money over the years.

Here’s a look at the different Medicare enrollment periods for 2020 and beyond that you should be aware. You don’t want to wind up without essential health care coverage—or paying more than you should for the coverage you want.

What is the Medicare Initial Enrollment Period?

Your Medicare Initial Enrollment Period is probably the most important date for you to know as you’re approaching the age of Medicare eligibility.

Your Initial Enrollment Period (or IEP) is a seven-month period of time. It begins three months before the month of your 65th birthday. It then includes the month of your birthday, and extends for three months after your birthday month.

For example, if you turn 65 on May 20th, your Medicare IEP would run from Feb 1st to August 31st.

One exception: if your birthday falls on the 1st of the month – your IEP will start one month early. For example, if your birthday is April 1st, your IEP will begin December 1st and your Medicare will begin one month early on March 1st.

During the IEP, you can enroll in Original Medicare (Part A and Part B) or a Medicare Advantage plan (Medicare Part C). Enrolling during your IEP avoids any late enrollment penalty.

You can also avoid late penalties for Part D by enrolling drug coverage during this same window. That drug coverage can be a standalone plan or part of a Medicare Advantage plan that includes Part D.

If you enroll in Original Medicare, you may want additional coverage with a Medicare Supplement Plan (Medigap). For this, you will use your  Medicare Supplement Open Enrollment Period. This is a 6-month window starting on your Part B effective date. Using the Medigap OEP to enroll in a Medigap means:

• You can’t be turned down for any Medigap plan available in your area regardless of your health status.
• Your insurance company cannot charge you higher premiums because of your health status or pre-existing conditions.
• Your coverage for any pre-existing conditions cannot be delayed

There are a number of unpleasant consequences you might face if you don’t sign up for coverage during your IEP. These apply only if you do not have other creditable coverage, like employer coverage.

Let’s break them down:

• If you don’t enroll in Part B during your IEP, you’ll probably have to pay a late enrollment penalty—for as long as you have Medicare coverage. The penalty is 10% for every 12-month period you should have had Part B, but didn’t enroll. The standard premium for Part B is $135.50 in 2019, which means you’ll pay an extra $13.50 every month. This will increase if the standard Part B premium goes up next year, which it likely will. You’ll pay this penalty even if you ultimately choose Medicare Advantage.
• You may also go without Part B coverage for a significant chunk of time. If you don’t sign up during your IEP, you’ll have to wait until the next General Enrollment Period, or GEP. Your coverage won’t start until July 1 that year.
• If you don’t have creditable Part D prescription drug coverage and miss your IEP, you’ll pay a penalty with your Part D premium—again, as long as you have the coverage. The penalty is 1% per consecutive month that you went without coverage for prescription drugs. The national base premium is currently about $36 per month, so if you go without coverage for a year, you’ll pay an extra $4.30 a month (and quite possibly more if the Part D base premium increases) for as long as you have coverage.
• In the rare situation where you don’t qualify for premium-free Part A because you don’t have enough work credits, and you don’t buy it during your IEP, you’ll pay a 10% premium penalty for twice the number of years you could have bought the coverage but didn’t.

Creditable Coverage

In many cases, people are still working have group coverage through an employer or union plan.  This allows you to delay enrollment in Part A and/or B.  When you retire, you can sign up for those Parts during a Special Enrollment Period (SEP). Medicare credits you for having employer group coverage at any large employer (20+ employees.)

Later when you retire, you get the 63-day Special Enrollment period to sign up for Parts A and/or B with no late penalties.

The Medicare Special Enrollment Period is an eight-month period that begins either the month you or your spouse quits working or the month your group coverage ends, whichever comes first.

If you missed your IEP and you don’t qualify for a special enrollment period, you can sign up for Original Medicare during the General Enrollment Period (GEP). This runs from January 1 through March 31 each year.

Don’t be fooled into thinking the GEP is a safety net so you don’t have to worry about your IEP, however. Even though you can enroll in Original Medicare during this time, you are still subject to the late enrollment penalties.

Even more problematic, your coverage won’t begin until July 1, which means you may go without coverage for months.

Keep in mind that the General Enrollment Period only applies to Original Medicare. If you want a Medicare Advantage plan or Medicare Part D coverage for prescription drugs, you’ll have to wait for the Annual Enrollment Period.

There’s an Annual Enrollment Period, or AEP, that occurs between October 15 and December 7 each year that’s specifically for Medicare Part C and Part D, the Medicare Advantage plans and prescription drug plans. If you miss your initial Medicare enrollment period, you can use the next Annual Enrollment Period to join a plan.

During the AEP, you can switch to Medicare Advantage from Original Medicare. You can also change Medicare Advantage plans if you’re currently enrolled in one. Should you join a Medicare Advantage plan and later want to leave it, you can use the AEP to return to Original Medicare as well. You can also enroll in a Medicare Part D Prescription Drug Plan—or switch to a different plan if you’re currently enrolled. You can even drop your Part D coverage completely, without penalty, if you’ve obtained creditable coverage through an employer or other source.

The Medicare program also gives you a window of opportunity to change your mind about a Medicare Advantage plan. If you enroll in a Medicare Advantage plan and for any reason you don’t like it, you can disenroll during the new Medicare Open Enrollment Period from January 1 – March 31.

You can:

• Return to Original Medicare and elect a Part D drug plan to go alongside it
• Switch Medicare Advantage plans once

Keep in mind that if you return to Original Medicare and plan on picking up a Medigap plan, that is not guaranteed. In many circumstances you may have to answer health questions for the Medigap plan and the carrier does not have to accept you.

There are certain situations that will trigger a Special Enrollment Period (SEP) that is specific to you.

A Medicare special enrollment period is usually a two-month window when you can make changes to your coverage due to a special circumstance. For example, moving outside the plan’s service area will qualify you for a Special Enrollment period.

You can use the SEP to switch to a new Medicare Advantage or Part D prescription drug plan. Likewise, you can also return to Original Medicare without penalty. You can sometimes also enroll in Medigap under guaranteed issue rights—with no medical underwriting.

There are also other situations in which you may be eligible for a Special Enrollment Period. If you don’t see your situation above, get in touch with us to learn what your options are.

We mentioned above that once you are enrolled in Medicare Parts A and B, you will also qualify for a 6-month open enrollment window for Medigap plans. This starts with your Part B effective date and is a one-time election period. You can enroll in any Medigap plan that you like, with no health questions asked.

What’s most important to know about this enrollment period is that it happens only once for most people. Then it’s gone forever so it’s one of the Medicare enrollment periods that you cannot miss.