Medicare Open Enrollment, the period when you can sign up, renew or change your Medicare coverage is October 15 to December 7, 2019. The initial enrollment period for Medicare is available during the three months leading up to and the three months following an individual’s 65th birthday month. Once someone is enrolled in the Medicare program, they are able to make changes to their coverage during the annual open enrollment period.
There are four major parts to Medicare: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage) and Part D (prescription drug coverage). The initial enrollment period for Parts A, B, and D happen in conjunction with turning age 65. Those who do not enroll when they become eligible are subject to penalties and higher monthly fees after enrollment. For example, if someone misses the initial enrollment period for Part B, they face an additional monthly premium of 10 percent for every 12 months they were eligible, but did not enroll. Registration for Part C is available during initial enrollment period or during annual enrollment periods without penalty once Medicare coverage is in place.
Part A (Hospital Insurance)
Medicare Part A covers hospitalization expenses, including hospital care, nursing home care, hospice and home health services. It is free if you already receive or are eligible to receive Social Security benefits, if you or your spouse has worked and paid taxes for at least 40 quarters (10 years), and/or if you are the parent of a fully insured deceased child. There may be other circumstances, such as specific medical conditions, that allow an individual to qualify for Medicare Part A before they turn 65.
Part B (Medical Insurance)
Medicare Part B covers medical and preventive care services, such as lab tests, flu shots, ambulance services, clinical research, medical bills and medical equipment. The majority of Part B benefits are subject to a yearly deductible ($185 in 2019), out-of-pocket co-payments, coinsurance and monthly premiums. The standard Part B monthly premium for 2019 will be $135.50.
Individuals who have an income or assets higher than a set amount may need to pay higher Part B premiums as determined by Social Security. Those with a lower income or assets may be eligible to receive assistance with Part B payments through a variety of programs such as Medicaid.
Part C (Medicare Advantage)
Medicare Advantage Plans are offered by private companies and approved by the Centers for Medicare and Medicaid Services. They are similar to private insurance plans that are available through the open marketplace. Medicare Advantage Plans cover emergency and urgent care needs and may offer extra coverage for vision, hearing, dental and health and wellness programs. Most Medicare Advantage Plans include prescription drug coverage as an extension of Medicare Part D. Monthly premiums for a Medicare Advantage Plan are separate from the Part B monthly premium. Medicare Advantage plans, by law, have an out-of-pocket maximum of no more than $6,700 per year, while Original Medicare (Parts A and B) do not have an out-of-pocket maximum.
Part D (Prescription Drug Coverage)
Medicare Part D is prescription drug coverage. Enrollment in Part D is not automatic, and there is a late enrollment fee for signing up after the initial enrollment period. All of the prescription drug plans vary in cost and formulary options.
Individuals who decide not to enroll in a Medicare Part C plan have the option of buying what is called a Medigap plan. These are supplemental policies that cover services not covered by Medicare Parts A, B, and D. These are not a government benefit, like Parts A and B, but insurance policies sold by private companies.
Stay on Employer’s Plan or Sign up for Medicare
If an individual has employer-based insurance when they turn 65, they may stay on their work plan. However, once they are off the plan, they need to enroll in Medicare Part B within eight months to avoid a penalty. This rule varies depending on the size of the employer, so individuals should check with their benefits advisor before making decisions regarding Medicare enrollment.
Many employers offer group health coverage to employees, retirees and their spouses/partners. If you have Medicare and are offered coverage under a group health plan, you can choose to accept or reject the group plan. If you have a group plan through your employer or your spouse when you qualify for Medicare, the decision to sign up for or delay Medicare is an important one that may have long-term effects on your coverage. In many cases, signing up late for Medicare will result in lifelong penalties. Keep in mind many private plans change the structure of their benefits for enrollees at age 65 to account for Medicare. This may result in gaps in coverage and you should weigh your options carefully.
If you have Medicare in addition to other health coverage, each type of coverage is called a “payer.” The “primary payer” pays what it owes on your bills first, and then your provider sends the rest to the “secondary payer” for payment. Medicare will either be the first or second payer, depending on a variety of factors. The payment arrangement between your group or employer plan and Medicare will determine which plan is the first payer. It is important for individuals to check with their private policy for the rules about which plan will pay first.