For Medicare Part A and Part B, enrollment periods include the initial enrollment period, general open enrollment period, and special enrollment period. For most people, the suggested period to use is initial open enrollment.
Initial Open Enrollment
The initial open enrollment period is seven months, beginning three months prior to an individual's 65th birthday. It generally takes three months from the time an individual enrolls until the policy becomes effective. In order to ensure coverage by the time you turn 65, it is advised to enroll at the earliest possible date. If you do enroll in the three months prior to your 65th birthday, your policy will begin on the first of the month that you turn 65. If your birthday happens to be on the first of the month, the policy will begin on the month prior to your birthday, if you enrolled prior to that month.
For those who have been receiving Social Security or Railroad Retirement benefits prior to turning 65, automatic enrollment will take place on the first day of the month prior to your 65th birthday. Making changes to the type of coverage can be done before your 65th birthday. Medicare will send information by USPS approximately three months before your 65th birthday. The information will include the following options:
- Auto-enrollment in Medicare Part A and Part B
- Skipping enrollment
- Choosing Medicare Advantage
- Choosing Medicare Supplement Insurance (Medigap)
- Choosing Medicare Prescription Drugs Part D
General Open Enrollment
Though the initial open enrollment period is recommended, a general open enrollment runs from January 1 to March 31 annually. The disadvantage to using this period is the late-enrollment penalty for Part B. The penalty is a 10% increase in the premium for each year that you weren't enrolled in Part B or using creditable coverage. The penalty is added to your premium for every year that you use Medicare. In some circumstances, individuals need to pay for their Part A premiums. If missing the initial open enrollment, a penalty can be applied to these premiums, too.
What is Creditable Coverage?
If you are 65 and still working or if your spouse is still working, the health care benefits that you may be receiving through this employment is called creditable coverage. When this coverage comes to an end, individuals have an eight-month special enrollment period. During this window, they can enroll for Medicare Part B with a penalty-free premium.