Table of Contents:
- Your Initial Enrollment Period and the Annual Enrollment Period
- Reasons to Enroll Before the General Enrollment Period
- Special Enrollment Periods
Medicare’s General Enrollment Period (GEP) lasts from January 1st to March 31st each year. During this window of time, individuals who missed their Initial Enrollment Period (IEP) and are not eligible for a Special Enrollment Period can sign up for Original Medicare.
Your Initial Enrollment Period and the Annual Enrollment Period
Your IEP only occurs once and lasts for seven months. It begins on Day 1 of the month 3 months prior to your 65th birthday and extends through the 3 months following your birth month. For example, if your birthday is in June, your IEP window opens on March 1st and closes after September 30th. While it is possible to enroll in Medicare after your IEP ends (thanks to the GEP), it is generally advisable to enroll during the IEP if possible.
After enrolling, Original Medicare beneficiaries have an opportunity to update their coverage each year during the Annual Enrollment Period (AEP). This period occurs from October 15th to December 7th and allows beneficiaries to expand the scope of their coverage, drop a policy, or switch from one plan to another. You cannot take advantage of the AEP if you are not already enrolled in Medicare.
Reasons to Enroll Before the General Enrollment Period
While the GEP acts as a kind of safety net for Medicare-eligible individuals who did not enroll during their IEP, there are many reasons not to wait.
Late Penalties May Cost You Thousands
In most cases, if you wait until the GEP to sign up for Medicare, you will have to pay a late penalty.
For Medicare Part A, the penalty applied to your coverage if you delay signing up past IEP is 10% of the plan’s monthly premium ($252 in 2021). This penalty lasts for double the number of years you waited to sign up after you became eligible, which means that if you sign up at age 67 (2 years late), your premium will increase by 10% until you are 71. For 99% of beneficiaries, Part A plans are premium-free. If this is true for you, it is wise to consider simply signing up for Part A as soon as you are eligible.
For Medicare Part B, the penalty applied to your coverage lasts for life. Beneficiaries who postpone signing up for Part B past IEP pay an extra 10% of their premium for each 12-month period that they failed to sign up. If you miss your IEP and sign up for Part B the following January, you will pay an additional 10% for life. In 2021, Part B’s monthly premium is $148.50. This means you would pay an additional $14.86/month in 2021 for neglecting to enroll during your IEP.
The late-enrollment penalty formula for Part D (or Prescription Drug) plans is determined by multiplying the national base beneficiary premium ($33.06 in 2021) by 1%, then multiplying this number by the number of months you qualified for Medicare, but did not have a Part D plan. That means if you are 5 months late in signing up for Part D, your late penalty for 2021 would be $0.33 (1% of $33.06) multiplied by 5 (number of months without a Part D plan) for a total of $1.65/month.
You’ll Be Uninsured for Half the Year
Signing up for Medicare during the GEP delays the start of your coverage to July 1st. This means you will not have valid health coverage through Medicare for the first half of the year. By signing up for Medicare during your IEP, you ensure that you do not have any gaps in your coverage.
Special Enrollment Periods
Beneficiaries may qualify for a Special Enrollment Period (SEP) if they’ve lost a viable form of health insurance, moved to a new address, or experienced a qualifying change within their household (for example, getting married, having a baby, or adopting a child). There are no penalties administered for joining a Medicare plan during an SEP.
The Health Insurance Marketplace has an eligibility screener that will determine whether you qualify for a Medicare SEP. If you are considering enrolling in Medicare during the GEP, it is a good idea to see if you might qualify for an SEP instead. If you are denied an SEP and disagree with the decision, you can appeal within 90 days.