Some people think you can join Medicare any time after your 65th birthday, while others believe that Medicare automatically enrolls them, so what’s the real answer?
Here are the facts:
- Medicare has fixed enrollment periods that dictate when you can enroll, change or disenroll from plans.
- If you miss your Initial Enrollment Period, late enrollment penalties apply
- Some late enrollment penalties are lifelong, meaning you pay them for as long as you have Medicare.
If you’re turning 65 and thinking of deferring enrollment in some of all parts of Medicare – make sure you understand when your Initial Enrollment Period, so you don’t miss it.
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Initial Enrollment Period (IEP)Your IEP is the period when you first become eligible and can sign up for Medicare. Your IEP occurs during the 7-month period around your 65th birthday that includes: – The three (3) months before the month of your 65th birthday |
Late Enrollment Penalties
Why are there late enrollment penalties?
Penalties exist to ensure that healthy individuals contribute to Medicare premiums when they are healthy so there is not a ‘free-rider’ problem where Medicare-eligible beneficiaries only sign up for Medicare when they are sick or require Medicare-covered services to skip paying any premiums.
What are the penalties?
The most two most common penalties are the Part B and Part D penalties.
| Part B Penalty | Your monthly premium increases 10% for each 12-month period that you missed signing up for Part B after your first eligibleYou will pay this higher premium for as long as you have Part B coverage (i.e., lifelong penalties) |
| Part D Penalty | If at any time after your IEP, there are 63 days or more when you don’t have Medicare Part D drug coverage or other ‘creditable’ drug coverage: You pay a late enrollment penalty of 1% of the monthly ‘national base beneficiary premium’ ($32.74 in 2023) multiplied by the number of full months that you had no coverageYou will pay this penalty for as long as you have Part D coverage (i.e., lifelong penalties) |
* There is no penalty specific to Part C (Medicare Advantage) – any penalties that apply for Part B or D will apply whether you’re in a Medicare Advantage plan or not.
When are you automatically enrolled?
If you are receiving Social Security at least four (4) months before turning 65, you will typically be automatically enrolled in Medicare Part A and B. If you are not automatically enrolled, you can enroll anytime during your IEP via the Social Security Administration: ssa.gov/benefits/medicare
If you miss your IEP, your next window to enroll is during the General Election Period, which happens every year between January and March, after the year you are first eligible. However, coverage doesn’t begin until July 1 of the same year, meaning you’re at risk of a ‘coverage gap’ of 6 months or more.
What are the exceptions?
The only typical exception for late enrollment penalties if you have ‘creditable’ medical and prescription coverage (see Mistake #3).
Bottom Line: Don’t miss your Initial Enrollment Period unless you’re eligible to defer
It is critical to know when your initial enrollment period is if your turning 65 to avoid potential penalties and coverage gaps. Always reach out to a Medicare expert such as CoverRight if you are unsure whether you should enroll during your Initial Enrollment Period.
| ????Tip: Speak to an expert Missing your Initial Enrollment Period has long-term consequences.While your friends and family are well-meaning they are not always the best resource for helping you define and understand your IEP. Save yourself money and trouble later by speaking with an expert. |
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