What are my options for open enrollment with Medicare?
As you near age 65, you have the option to enroll in Medicare. Medicare pays for the bulk of your health care expenses, as long as you apply for coverage at the right time. Like most insurance, there are limitations on when you can apply, coverage limits, and how to use the insurance once you have it.
When Do You Qualify for Medicare?
Medicare coverage is available when you reach 65 years of age or go on permanent disability benefits. For disability to qualify for Medicare, you must receive Social Security benefits for at least 24 consecutive months. In many cases, you will be automatically enrolled in Medicare parts A and B. When you first sign up to receive Social Security, you are automatically enrolled in parts A and B, unless you choose to delay part B. If you are not taking Social Security benefits, you won't be automatically enrolled. To start your Medicare, you must enroll either three months before, during the month of or within three months after your 65th birthday. Essentially, you have a total of seven months to decide.
Why Do People Delay Enrollment?
If your spouse is still working, you might not want to start paying the Part B premiums right away. You can remain on your spouse's insurance and pay no enrollment penalty when you do opt-in to Medicare Part B, if you have creditable coverage. If you choose to delay for another reason, be sure to look at the possible consequences. Delayed enrollment carries a 10 percent penalty on premiums for as long as you have Medicare. That can add up to a lot for a short delay. Don't assume it's best to stay on group insurance coverage, it may benefit you to opt out, take Medicare, and add a Medicare Supplement (Medigap) coverage.
Medicare Eligibility and Enrollment
If you have delayed enrollment for Medicare Part B or were not automatically enrolled, you'll need to sign up during an open enrollment period. Every year, the open enrollment Medicare period/annual election period starts on October 15 and runs until December 7. This period is also when you can change your existing Medicare plan.
If you're currently on Medicare Parts A and B, you can switch to a Medicare Advantage Plan(Part C). If you're already on a Part C plan, you can upgrade to the original Parts A and B. Medicare Part D open enrollment is on the same schedule, so if you need prescription drug coverage, this would be the enrollment window.
Coverage Changes Starting in April, 2018
Every year, Medicare makes small, but meaningful changes to your coverage. Premiums go up, coverage limits change, discounts go up or down, and all of these changes can affect your out-of-pocket costs. If you're enrolled in Medicare Part D, look out for increases to your drug discounts. On name brand prescriptions your discount will increase to 65 percent with a planned increase to 75 percent by 2020. On generic prescriptions, you'll get a 56 percent discount with the same planned increase schedule.
Medicare does not cover all health care costs, but it does help keep costs manageable by paying a large portion of covered services. To help with expenses that aren't covered, Medigap plans can help with certain uncovered expenses. Just remember that Medigap only works with Original Medicare, not Medicare Advantage Plans. You'll want to enroll as soon as you become eligible unless you have a compelling reason to opt out. After all, the penalty on your premium for a delayed enrollment adds up to quite a lot over the years. Once you've enrolled, be sure to look over your plan every year. Some Medicare Advantage plans are discontinued and others are added, so you'll want to confirm that your coverage continues to address your needs.
Want to Make Changes?
If you are already enrolled in Medicare and would like to make changes, you are typically limited to specific time periods. The Annual Election Period is generally an ideal time to make changes or update your plan; it runs from October 15 through December 7.