If you’re approaching 65, you may see numerous online ads and receive multiple pieces of mail urging you to sign up for Medicare. Those ads are even more prevalent during the Medicare Open Enrollment Period. While some of these ads and informational mailers are misleading, others can be intimidating or alarming, demanding that you act now to avoid penalties. It’s important not to jump into action every time you receive a piece of mail or see a commercial about Medicare. Instead, take time to understand Medicare enrollment periods.
At Mercer Advisors, we’re here to help. We have partnered with Chapter, a leading tech-driven Medicare advisor, as a healthcare concierge. As a client, you can schedule an appointment with Chapter for personalized Medicare guidance from a trusted advisor.
What should I know about Medicare enrollment?
Just as with employer-linked insurance coverage, you must enroll in or change Medicare options during set time periods. Unlike employer-linked coverage, however, it’s not necessary to enroll in Medicare every year. Understanding Medicare enrollment periods will help you understand when to take action.
Initial Enrollment Period
During this period, you can sign up for Original Medicare (Parts A and B) and choose which supplemental Medicare insurance options are right for you.
Your Initial Enrollment Period is a seven-month window: The month when you turn 65, plus three months before that and three months after. If your birthday falls on the first of the month, your Initial Enrollment Period begins one month earlier. For example, if your birthday falls on January 1, then your Initial Enrollment Period begins September 1 of the prior year and extends through the end of March.
Part B Special Enrollment Period
What if you or your spouse are still working at 65 and prefer to remain on employer coverage? It still makes sense to enroll in Part A, because it’s free for Americans who have been working and paying taxes for at least 10 years. You can delay Part B enrollment without penalty if you work for a company with 20 or more employees.
General Enrollment Period
If you miss your Medicare Initial Enrollment Period and aren’t eligible for a Special Enrollment Period, then you will have to wait to sign up for coverage during the next Medicare General Enrollment Period. The General Enrollment Period spans January 1 to March 31. If your Initial Enrollment Period hasn’t already passed, don’t rely on General Enrollment, as you may be subject to a late-enrollment penalty.
Choosing supplemental coverage
After enrolling in Original Medicare, you’ll need to evaluate supplemental coverage options, according to your needs. Technically, you don’t need to enroll in supplemental coverage, but only 10% of Medicare beneficiaries choose not to. This is because Original Medicare doesn’t provide comprehensive coverage: After meeting your deductible, you’re still responsible for 80% of covered service costs. Original Medicare has no prescription drug coverage and no out-of-pocket maximum; without supplemental coverage, you could be left with hefty costs.
Enrollment works a little differently for Medigap, Medicare Advantage, and Medicare Part D (prescription drug coverage), but you’re generally able to enroll following Part B enrollment.
Annual Open Enrollment Period
Medicare has an Open Enrollment Period each year, from October 15 through December 7. As mentioned, you’ll likely see many ads and receive plentiful calls and postcards from Medicare insurance brokers during this time.
During the Medicare Open Enrollment Period you can:
- Switch from Medicare Advantage to Original Medicare
- Switch from Original Medicare to Medicare Advantage
- Change Medicare Advantage plans
- Add, drop, or change Part D (prescription drug) coverage.
While you aren’t required to take action during the Open Enrollment Period, it’s a good time to review your coverage and make any changes (for example, Medicare Advantage plans use this time to add or remove in-network doctors, change benefits, and adjust drug coverage). You can also review other plans to ensure that your existing plan is the best choice.
One last note: If you previously chose a Medigap plan, it’s generally a good idea to stick with it instead of being swayed by advertisements for Medicare Advantage.
Medicare Advantage Open Enrollment Period
The Medicare Open Enrollment Period each fall can feel a little hectic: You may receive countless calls and see a bunch of ads, with aggressive marketing tactics aimed at persuading you to switch Medicare coverage. If you enrolled in a Medicare Advantage plan that isn’t a good fit, you can switch to a different Medicare Advantage plan or switch to Original Medicare. If you switch to Original Medicare, you can also enroll in a standalone prescription drug plan (Part D).
For help navigating Medicare enrollment periods, schedule a review with a Chapter advisor here. You can also talk to your Wealth Advisor about Medicare resources at Mercer Advisors. You should never feel as if you’re navigating Medicare’s complexities alone.
