There’s more to it than you think.
Medicare is how 65 million Americans get their health coverage. Signing up for Medicare should be straightforward. But there are a few things you need to know—and a few things you need to watch out for. The Centers for Medicare & Medicaid Services (CMS) do their best to make things fair and simple, but mistakes get made every year. Unfortunately, making a mistake during Medicare enrollment can cost you thousands.
In this article, we will explain several options for signing up the right way. We’ll also cover common mistakes and show you how to avoid them (and save money along the way).
Medicare Initial Enrollment Period (IEP)
Everyone gets an Initial Enrollment Period, or IEP when they first become eligible for Medicare. The IEP is a seven-month window: the three months before the month of your 65th birthday, your birthday month, and the three months after.
During your Initial Enrollment Period, you can sign up for Original Medicare and enroll in a prescription drug plan and Medigap plan. Once you’ve signed up for Original Medicare, you can then switch to a Medicare Advantage plan if it makes sense for you. But remember that you need to first enroll in Original Medicare before you make the switch.
What If I Miss My Initial Enrollment Period?
If you fail to sign up for Medicare during your initial enrollment—and you don’t qualify for postponing Medicare Part B—you’ll face a late enrollment penalty. Your late enrollment penalty adds a 10 percent increase on your Medicare Part B premium for every 12-month period you went without Medicare Part B after the initial enrollment period.
If you miss your initial enrollment period, you’ll need to sign up for Medicare during the general enrollment period from January 1 to March 31 of each year. But your Medicare coverage won’t start until July 1 of that year.
Keep in mind that you can postpone your initial enrollment period if you have health care through current employment or your spouse. Just be sure that you do the necessary paperwork to notify Medicare.
Medicare General Enrollment Period (GEP)
If you missed your initial enrollment or decide to change your coverage, you’ll sign up for a new Medicare plan during the general enrollment period (January 1 to March 31 every year).
Medicare Special Enrollment Period (SEP)
Life never happens in a straight line. Medicare special enrollment periods (SEP) are available to assist during life’s special circumstances. Special enrollment periods last for eight months from the first day of the month that your employment ends or employer health insurance ends, whichever occurs first. During that time, you are allowed to make changes to your Medicare Advantage plan or prescription drug coverage.
Special enrollment periods are triggered by specific life events:
- You’ve moved to an area that makes new plan options available to you or is outside of the coverage area of your plan.
- You’ve moved into or out of an institution such as a skilled nursing facility.
- You’ve been released from jail or prison.
- You’ve returned to the United States after living abroad.
- You’ve lost Medicaid coverage, employer coverage, union coverage, or COBRA.
- You’re now eligible for Medicaid, Extra Help, or other government assistance programs.
- New plan options are made available to you through an employer.
- You’ve voluntarily or involuntarily lost your prescription drug coverage.
- Your plan provider has lost its ability to contract with Medicare.
- You are now eligible for a Special Needs Plan or are no longer eligible for a Special Needs Plan.
Sometimes you can qualify for a special enrollment period due to inaccurate information given when you signed up for your Medicare Advantage plan or prescription drug coverage.
Automatic Medicare Enrollment
There are a few circumstances where Medicare Part A and Part B enrollment is automatic. These circumstances are:
- You are 65 years old and you are already receiving your Social Security benefits or railroad retirement benefits.
- You are under 65, disabled, and receiving Social Security benefits (or in some cases, disability benefits).
- You have amyotrophic lateral sclerosis (ALS), also called Lou Gehrig’s Disease.
If you live in Puerto Rico and are receiving Social Security benefits or railroad retirement benefits, you’ll be automatically enrolled in Medicare Part A. But you’ll need to get Part B on your own.
People who are eligible for automatic enrollment can still choose a Medicare Advantage plan, add a Medicare supplement plan, and add prescription drug coverage. You can search for such policies with our partner eHealth Medicare, with another insurance agency, or at Medicare.gov.
What If I Have End-Stage Renal Disease (ESRD)?
If you have end-stage renal disease (ESRD), you’ll likely need to sign up for Original Medicare Parts A and B. Most private run medicare plans, like Medigap and Medicare Advantage plans, do not accept people with ESRD.
You can apply for Medicare if you have ESRD, even if you’re under 65. However, enrollment is not automatic.
Enrolling in Medicare Part D
Medicare Part D is most commonly called your Medicare Prescription Drug Plan.
For the most part, everyone needs to sign up for their prescription drug plan separately from their Medicare plan. However, you can be automatically enrolled in Part D:
- If you qualify for Medicare and Medicaid, or
- If you get Supplemental Security Income (SSI).
If you do not meet either requirement, you will need to apply for a prescription drug plan on your own.
Enrolling in Medicare Supplement Insurance
Also known as Medigap, Medicare Supplement Insurance Plans are meant to bridge gaps in coverage from Original Medicare. You can buy a Medigap policy from a private insurance company, which means that the plan is subject to medical underwriting (more on this below). However, you must be enrolled in Medicare Part A and Part B before you enroll in a Medigap plan.
Similar to Original Medicare, Medigap comes with an open enrollment period of six months. This period begins the month of your 65th birthday. During the open enrollment period, you can buy any Medigap program available in your area at a flat price. That means that, although the plan is medically underwritten, the private health insurance company cannot penalize you for a preexisting condition.
What if, at the time of your 65th birthday, you have health insurance through an employer or spouse and plan to postpone Part B enrollment? You won’t lose your Medigap open enrollment. In this case, your open enrollment would begin as soon as you sign up for Part B.
After your open enrollment ends, private health insurance companies are now allowed to charge more or deny coverage to people with preexisting health conditions. The window does not reopen.
Should I Enroll in Medicare Advantage?
You can think of Medicare Advantage, or Medicare Part C, as a Medicare-like health plan fulfilled by a private health insurance company instead of the federal government. A Medicare Advantage (MA) plan must cover everything that Original Medicare covers.
Some MA plans come with vision, dental, and prescription drug coverage. Some do not. Some MA plans have $0 premiums, while other plans can cost a few hundred dollars each month. More expensive plans do tend to offer a wider range of benefits. However, that’s not always the case, so it’s always a good idea to read plan information carefully.
Medicare Advantage is a popular choice among Medicare beneficiaries. Still, many people prefer using Original Medicare with a combination of Medigap and stand-alone health plans (like dental and vision). You’ll need to decide if Medicare Advantage is right for you.
How to Enroll in Medicare Advantage
To enroll in Medicare Advantage, you first need to enroll in both Medicare Part A and Medicare Part B. As some people will be automatically enrolled in just Medicare Part A, you should check to make sure you are enrolled in both parts of Original Medicare. You will also need to live in the service area for your desired plan.
Once enrolled, you can apply for a Medicare Advantage plan. You will need two things when applying:
- Your Medicare number found on your Medicare card
- Your start date for Part A and Part B coverage
To enroll in Medicare Advantage, follow these steps:
- Compare Medicare Advantage plans on a site like eHealth (our partner) or Medicare.gov.
- Choose a plan or speak with a licensed health insurance agent for more information about your choices.
- Fill out an online form (if available). With eHealth, a form will be provided to you.
- Submit your completed form. You may need to send supporting documents.
- Review your plan information before signing the final documents.
After you submit your online application and supporting documents, you will receive a notification about your health plan accepting or denying your application. Once you’re accepted, you should absolutely review your insurance documentation. Be sure you know your policy: what it covers and what it doesn’t. This will save you from unexpected expenses later on.
Can I Sign Up for Medicare Online?
The wonders of the internet age never cease: yes, you can sign up for Medicare online. You can apply for all of the following:
- Original Medicare (Medicare Parts A and B)
- Medicare Advantage (Medicare Part C)
- Prescription Drug Plan (Medicare Part D)
- Medicare Supplemental Coverage (Medigap)
- Dental and vision coverage (stand-alone plan)
If you’re signing up for Original Medicare, you will sign up on the Social Security Administration website. It may seem strange, but the administration and funding of Medicare and Social Security are connected.
When signing up for Medicare Advantage or other privately fulfilled Medicare products, you may be able to sign up online. This will depend on the private company through which you are purchasing coverage.
However, just because you can sign up online, doesn’t mean you have to. You can work with an insurance agent—someone from a private company who helps you choose between Medicare options. We partner with eHealth Medicare to provide you with Medicare options and qualified insurance agents. The benefit of working with an agent is having their expertise in your toolkit.
However, you can choose from a broad field of insurance agents. And if you have a preferred insurer, you can work directly with a private insurance company agent to get covered.
FAQ: Signing Up for Medicare
What is the difference between Original Medicare and Medicare Advantage?
There are several important differences. Original Medicare is health insurance administered by the federal government. It's made up of Part A (hospital insurance) and Part B (medical insurance). Part B covers doctor visits and preventative care, while Part A covers inpatient care, like a stay at a skilled nursing facility. Original Medicare will cover you for a visit to any health professional who accepts Medicare. Monthly costs are typically low, as long as you meet work history requirements. However, with the coinsurance system, there is no cap for out-of-pocket costs—many people purchase a Medigap plan to control costs. Additionally, Original Medicare does not include prescription drug coverage, so a separate plan must be purchased. Medicare Advantage is administered by a private health insurance company but regulated by the federal government. Medicare Advantage (MA) plans must offer at least everything that Original Medicare offers. Many MA plans offer additional coverage, like extra visits to a chiropractor. Many MA plans also offer a prescription drug plan, a dental plan, a hearing plan, and a vision plan. There's a catch, of course. These plans also tend to be more expensive month to month. But taking into account that MA plans come with out-of-pocket limits, these plans are worth it to 21.8 million people.
Am I eligible for Medicare?
To qualify for Medicare, you must (with few exceptions) be an American citizen either age 65+ or with a qualifying disability. However, many people qualify for Medicare Part A without paying a monthly premium. Medicare Part A beneficiaries must have earned “work credits” through their work history. A work credit is earned for every $1,410 earned in a year, as of 2020. A maximum of four work credits can be earned in one year. To qualify for Medicare Part A for free, you must have at least 10 work credits. If your spouse was the primary earner, you are likely still eligible for free Medicare Part A. The reasoning behind work credits is that you pay into the Medicare program through Medicare taxes over your working life. If you do not have enough work credits to qualify, you can still get Medicare. You’ll just have to pay a monthly premium for Medicare Part A in addition to the Part B premium.
What is the Medicare coverage age?
For most people, Medicare coverage starts at age 65. However, some can access Medicare benefits early if they have a qualifying disability.
Do I automatically get Medicare when I turn 65?
People drawing from their Social Security benefits by age 65 will be automatically enrolled in Medicare coverage. However, everyone should still verify that they’ve been enrolled in Medicare. Don’t rely solely on the system to do things right.
How long before you turn 65 can you apply for Medicare?
Everyone has at least three months before turning 65 to sign up for Medicare. Everyone also has the month of their 65th birthday, plus the following three months to sign up for Medicare. It’s a good idea to choose your plan and sign up early. You may be eligible for early enrollment if you have a qualifying disability.
Does Medicare Advantage work with Medigap?
Unfortunately, you cannot have both a Medicare Advantage Plan and a Medigap Plan. You will have to choose one of these options. However, you can use Medigap along with Original Medicare.
How do I contact Medicare?
Phone Number: 1 (800) MEDI-CARE [1 (800) 633-4227] TTY: 1 (877) 486-2048 Mail: Medicare Contact Center Operations PO Box 1270 Lawrence, KS 66044 Website: Medicare.gov
Conclusion: Know Your Options
The key to signing up for the right Medicare plan is to know what’s available to you. You should know:
- What benefits you qualify for, including financial assistance
- What Original Medicare covers and what it doesn’t
- Which Medigap plans are available to you
- Which Medicare Advantage plans are available in your area
- Your Medicare prescription drug coverage options
- Your dental, vision, and hearing options (likely purchased as stand-alone policies)
We encourage you to do more research if this is the start of your journey. You can also speak to a licensed health insurance agent with our partners at eHealth Medicare. Your agent can explain your plan options and help you understand the important differences between your options.