Maneuvering though the Medicare Maze

Author: Linda Fargo, CPA

Part 1: Overview

Medicare is health insurance for people 65 or older, people under 65 with certain disabilities, and people of any age with End-Stage Renal Disease (ESRD) but it works like no other insurance you have known.  Medicare is not a one-size-fits all system. Rather, it is made up of several parts with each part covering different aspects of health care costs. There are many decisions to be made and much to understand with regards to deciding if and/or when to sign up for the various parts of Medicare.  There are also various deadlines for enrollment for the various parts with potentially expensive and permanent penalties for failing to meet them. 

A good place to start is an overview of the various parts and what they cover:

Medicare Part A (Hospital Insurance) helps cover:

  • Inpatient care in hospitals and certain limited skilled nursing facility care
    • Services of professional nurses
    • Semiprivate room
    • Meals 
    • Other services provided directly by the hospital or nursing facility including lab test, prescription drugs, medical appliances and supplies and rehabilitation therapy
  • Hospice care
  • Home health care

Medicare Part A might more accurately be called coverage primarily for nursing care. It does not cover the services received from doctors, surgeons, or anesthetists while in a health care facility.  It also does not cover custodial or long-term inpatient care in a skilled nursing facility.  

The vast majority of people in Medicare are eligible for Part A at no cost for premiums.  It is essentially paid for in advance by the Medicare payroll taxes contributed from earnings while working. It is “free” unless the enrollee or their spouse has not accumulated 10 years of work credits in Social Security.  Those without enough work credits will pay a premium for Part A coverage. However, Part A services are not free. The patient is responsible for deductibles and co-payments for specific services.  

Medicare Part B (Medical Insurance) helps cover:

  • Medically necessary services from doctors and other health care providers
  • Outpatient care 
  • Some inpatient care when patients are placed under observation instead of being formally admitted
  • Approved Home health care not covered by Part A
  • Durable medical equipment
  • A wide range of preventive healthcare services (with little or no cost)

Unless income is low enough to qualify for assistance from the resident state, enrollees must pay a monthly premium to receive Part B services.  If modified adjusted gross income as reported on the enrollee’s IRS tax return 2 years ago was above a certain amount the enrollee may be required to pay more.  

If yearly modified adjusted gross income in 2017 was:

File individual tax return File joint tax return File married & separate Monthly premium in 2019
$85,000 or less $170,000 or less $85,000 or less $135.50
Above $85000 up to $107,000 Above $170,000 up to $214,000 N/A $189.60
Above $107,000 up to $133,500 Above $214,000 up to $267,000 N/A $270.90
Above $133,500 up to $160,000 Above $267,000 up to $320,000 N/A $352.20
Above $160,00 up to $500,000 Above $320,000 up to $750,000 Above $85,000 up and less than $415,000 $433.40
Above $500,000 Above $750,000 Above $415,000 $460.50

In addition to the monthly premium the enrollee pays a share of the cost of most Part B service.  This amount is almost always 20% of the Medicare approved cost. 

A person must be a U. S. citizen or be lawfully present in the U.S. to get Medicare-covered Part A and/or Part services. 

Part A and Part B together form what is known as traditional or original Medicare.  The other parts make up fee-for-service Medicare. 

The enrollee can decline Medicare B coverage if they have other health insurance that meets Medicare requirements.  If the other coverage is lost, he/she can enroll in Medicare Part B with no penalty if application is made on a timely basis. 

Medicare Part C (Medicare Advantage):

Medicare Part C is also called fee-for service Medicare. This is a Health Maintenance Organization (HMO) type coverage.

  • Includes all benefits and services covered under Part A and Part B
  • Usually includes Medicare prescription drug coverage (Part D) as part of the plan
  • Run by Medicare-approved private insurance companies that follow rules set by Medicare
  • May include extra benefits and services for an extra cost

Medicare Part D (Medicare prescription drug coverage):

This is optional Medicare coverage and usually requires a premium.

  • Helps cover the cost of prescription drugs
  • Run by Medicare-approved private insurance companies that follow rules set by Medicare
  • May help lower prescription drug costs and help protect against higher costs in the future
  • Generally an HMO or PPO

Medicare Supplement Insurance (Medigap):

Original Medicare pays for many, but not all, health services and supplies.  Medicare Supplement Insurance policies, sold by private companies, can help pay some of the health care costs that traditional Medicare doesn’t cover, like copayments, coinsurance and deductibles.  

Every Medigap policy must follow federal and state laws and must be clearly identified as “Medicare Supplement Insurance”.  Insurance companies can sell only a “standardized” policy. All policies offer the same basic benefits, but some offer additional benefits so you can choose which one meets your needs.  

  • The enrollee must have Part A and B
  • There are monthly premiums
  • Covers only one person
  • Can’t have prescription coverage in the Medigap plan and also have Part D
  • Costs can vary and may go up with age
  • Good all over the country when using doctors and other providers who accept Medicare payment

Part 2: Understanding the Costs –

Medicare isn’t free!  In fact, Medicare is said to cover only about half of the enrollee’s health care cost if they have no extra insurance.  A Medicare beneficiary/enrollee may be required to pay certain out-of-pocket costs, such as premiums, deductibles, copayments and/or coinsurance.  These costs are generally standardized for covered services under Original Medicare, Part A and Part B. If the beneficiary is enrolled in a Medicare Advantage plan or Medicare Part D Prescription Drug plan, the out-of-pocket costs may vary by plan.

Medicare Part A & B

Premium and deductible amounts may change each year.  The Center for Medicare & Medicaid Services (CMS) usually publishes the Medicare Part A and Medicare Part B rates for the following year around the middle of October or November.  Medicare-approved private insurance companies publish the new stand-alone Medicare Part D Prescription Drug Plan and Medicare Advantage plan premium and deductible rates for the following year during the fall. If you’re already enrolled in a Medicare Prescription Drug Plan or a Medicare Advantage plan, the plan sends you a document called an Annual Notice of Change.

PremiumsNone if the individual or their spouse has earned 40 or more work credits.Up to $413 each month if not.Between $135.50 and $460.50 per month depending on 2 years prior modified adjusted gross income.  More if a late enrollment penalty applies.Premiums vary a lot amount Part D plansThere is also an additional surcharge a month for people above a certain income level.More if a late enrollment penalty applies
Deductible$1,316 for each benefit periodAnnual deductible: $185Annual deductible: Between $0 and $400 depending on the plan.
Co-PaymentsHospital Stays:Day 1-60: no co-pays after deductible is metDay 61-90: $329 a day


Day 91-150: $658 a day for each lifetime reserve day (up to 60 lifetime reserve days per individual)

Skilled Nursing Facility:

Day 1-20: no co-pays

Day 21-100: $164.50 for each benefit period

After 100 days: patient is responsible for all costs if separate coverage does not cover

None for most preventative services.20% of the Medicare-approved costs for other services.Co-pays depend on what your plan charges for each drug and which phase of coverage the beneficiary is in at any given point of the plan year.

Without Medicare Supplement Insurance (Medigap) or Part C – Medicare Advantage coverage there is no annual maximum out of pocket cost for medical services.  There are also some major things that Medicare does not cover at all.  Although some of these too can be covered by Medicare Supplement Insurance or Part C – Medicare Advantage the additional premiums may also be prohibitive.

Medicare Part A doesn’t have an annual deductible but rather applies a deductible to each hospital benefit period.

A benefit period begins the day a patient is admitted as an inpatient in a hospital or skilled nursing facility (SNF). The benefit period ends when the patient hasn’t received any inpatient hospital care (or skilled care in a SNF) for 60 days in a row. If the patient goes into a hospital or a SNF after one benefit period has ended, a new benefit period begins. The inpatient hospital deductible must be paid for each benefit period. There’s no limit to the number of benefit periods.

Things Medicare does not cover:

  • Ear exams, hearing aids, or having hearing aids fitted
  • Vision test, eyeglasses or contact lenses
  • Oral exams, teeth cleaning, extractions or dentures
  • Toenail clipping or the removal of corns or calluses
  • Medical equipment it considers items of convenience rather than medical necessity
  • Long-term care in nursing homes
  • Medical services abroad
  • Acupuncture and other alternative medical practices
  • Chiropractic care unless injured or in pain because of a problem with the spine and provided that the treatment is clearly improving
  • Skilled nursing care without 3 days of hospital admission (not observation) immediately prior to admission

Medicare Part D

Your actual drug plan cost will vary depending on:

  • The patient’s actual prescriptions and whether they are on the plans formulary list and depending on what “tier” the drug is in
  • The plan chosen.  Plan costs change every year.
  • Which pharmacy is used – some plans have preferred pharmacies
  • Whether the patient qualifies for the Extra Help program
  • The patient’s income level may result in higher premiums

If yearly modified adjusted gross income in 2015 was:

File individual tax returnFile joint tax returnFile married & separateMonthly premium in 2017
$85,000 or less$170,000 or less$85,000 or lessPlan premium
Above $85000 up to $107,000Above $170,000 up to $214,000N/A$34.20 plus plan premium
Above $107,000 up to $160,000Above $214,000 up to $320,000N/A$51.40 plus plan premium
Above $160,00 up to $214,000Above $320,000 up to $428,000Above $85,000 up to $129,000$70.90 plus plan premium
Above $214,000Above $428,000Above $129,000$77.40 plus plan premium

In addition, most Medicare drug plans have a coverage gap (also called the “donut hole”). The coverage gap begins after the patient and the drug plan together have spent a certain amount for covered drugs. In 2017, once the coverage gap is entered, the patient pays 40% of the plan’s cost for covered brand name drugs and 51% of the plan’s cost for covered generic drugs until the end of the coverage gap is reached. Not everyone will enter the coverage gap because their drug costs won’t be high enough.

Part D drug coverage is generally divided into four phases over the course of a calendar year.  Here’s the breakdown:

Phase 1, the annual deductible: The patient must pay the full cost of the drugs until the deductible is met.

Phase 2, the initial coverage period: This stage begins once the deductible is met.  During this phase the patient pays the co-payments required by the plan.  This phase ends once the total cost of the drugs paid by the patient and the plan reaches a certain dollar limit set by law.  The threshold is $3,700 in 2017.

Phase 3, the coverage gap: This gap – often called the “donut hole” begins when the limit of initial coverage is met and ends if and when the amount the patient has spent out-of-pocket on drugs from the beginning of the year hits another dollar limit set by law.  The threshold is $4,950 in 2017.  Under the Affordable Care Act the gap is gradually shrinking due to discounts that come partially from the drug companies and partially from the government.  These discounts get larger until by 2020 the patient will pay no more than 25% of the cost of any drugs in the gap.

Part 3: Decisions –

Decide which coverage – Considerations:

Original Medicare: Includes Part A & Part B

  • Medicare provides this coverage directly
  • Choice of doctors, hospitals, and other providers that accept Medicare anywhere in the country
  • The patient pays the deductibles and coinsurance
  • Will usually pay a monthly premium for Part B
  • If drug coverage is desired, must join a Part D – Medicare Prescription Drug Plan and pay additional monthly premiums
  • May also want to consider purchasing additional Medigap coverage from a private insurance company to fill the gaps in Original Medicare
  • Individuals who also have Federal Health Benefits (FEHB) or some other public retirement health benefits may have some additional considerations.


Medicare Advantage- Part C: Includes BOTH Part A & Part B

  • Private insurance companies approved by Medicare provide this coverage
  • In most cases the patient is required to use plan doctors, hospitals, and other providers or pay more or all of the costs. This type of plan is not a good choice for people that don’t live in the same location all year.
  • Generally there is a monthly premium in addition to the Part B premium as well as deductibles, copayments or  coinsurance for covered services
  • Costs, extra coverage, and rules vary by plan
  • If drug coverage is desired and it’s offered by the chosen Medicare Advantage plan will normally need to get it through the plan.  Some types of plans don’t offer drug coverage.  In this case can join a Medicare Part D plan.

There are many different kinds of Medicare Advantage options available. Not every plan provider will have each kind, and it is advisable to shop around to see all the options available in the enrollee’s service area.

Decide when to apply – Considerations:

TIMING IS CRITICAL! Medicare has many enrollment periods for the various “Parts” of Medicare. Enrollees that miss the optimal “window of opportunity” will incur higher out-of-pocket costs in the interim as well as permanent lifelong penalties.  (See NASTY COST OF NOT ENROLLING ON TIME – Penalty Calculation at the end of this article.)

Timing for Parts A & B –

Initial Enrollment Period (IEP)

This is the beneficiary’s first opportunity to enroll in Medicare Part A and B (except those who are medically disabled under the age of 65).  The IEP is 7 months long, beginning 3 months before the 65th birthday month and ending 3 months after the 65th birthday month.  All Medicare eligible people need to enroll for Medicare Part A and B during this period unless they are eligible for a Special Enrollment Period (SEP) later.  Those that do not enroll during their IEP or, if applicable, SEP will pay lifelong penalties, and will have a delay in applying to get access to Medicare coverage.

Circumstances that would indicate necessity or benefit for application for Part A and B during the IEP:

  • No other health insurance
  • Self-paid, non-employer insurance
  • Employer health insurance with high costs or inadequate coverage
  • Eligible for health benefits under the military’s TRICARE for Life (TFL) retiree program, which requires taking Medicare Part B as a condition of continued TFL coverage
  • Not entitled to premium-free Part A benefits

Special Enrollment Periods (SEP)

Those who have coverage under group health plans for an employer for which the individual or their spouse are still actively working (the employer that is providing the coverage) will qualify for a SEP to sign up for Part A and/or Part B when the job or coverage ends, whichever comes first. Although it is possible to enroll in Medicare any time between the end of the IEP and before work or employer coverage ends, the SEP lasts for 8 months after the employment or coverage ends.  There is usually not a late enrollment penalty for those who sign up during the SEP.  However, Part B coverage begins on the first day of the month after enrollment.

For those who continue working beyond 65, the law requires the employer to offer exactly the same health benefits that are offered to younger workers in the same company or organization.

However, some caveats:

  • It is important to sign up as soon as possible because there is no primary coverage during the SEP! Even coverage such as COBRA or retirement benefits will only provide secondary coverage.  (When Medicare eligible individuals do not have Medicare Part A or B coverage the secondary coverage will only cover 20% of the cost leaving 80% to be paid by the individual.)
  • The employer coverage needs to cover a group with 20 or more members. (The 20 workers don’t have to be full-time and don’t have to be enrolled in the employer’s health plan.) If the group is smaller than 20 members, enrollment for Part A and B must be made during the IEP.  If not, the enrollee will only have secondary coverage through their employer plan!

There is an obscure rule worth knowing:  Someone who fails to sign up during their IEP and then realizes that their employer plan isn’t paying because it’s become secondary to Medicare, is entitled to an immediate SEP without penalty if they are will working.

  • The employer coverage needs to be deemed Medicare Part D “creditable”.  This means the employer coverage includes a prescription plan comparable to Medicare Part D.
  • Those retiring or stopping work before the IEP ends – even on the very last day – will not be eligible for a SEP.  An IEP always trumps an SEP if they overlap!

Most people who delay Part B nonetheless sign up for Part A during their initial enrollment period at age 65. Even though delaying Part A beyond age 65 doesn’t, generally, risk penalty, signing up has the advantage of making sure that a Social Security official enters into the record the fact that Part B is being delaying on the basis of current employment.

However, for those for which their employer health insurance takes the form of a high-deductible plan paired with a Health Savings account, there may be a very good reason to delay Part A.  Under IRS rules, enrollment in any part of Medicare makes an individual ineligible to contribute to an HSA. Those covered by their spouse’s HSA at work aren’t affected by the rule because they are not the contributing employee.  It’s suggested that contributions to the HSA be stopped several months before starting to draw Social Security benefits as any retroactive “back pay” will cause the Medicare coverage to be retroactive as well. Those who have an HSA may also want to delay signing up for Part D as well.

Even those who can delay Part B in favor of employer insurance have some choices:

  • Can continue with employer and postpone Medicare
  • Can drop employer benefits and rely totally on Medicare
  • Can decide to have both

When covered by health insurance at work as well as Medicare, that insurance is automatically primary to Medicare unless the employer has fewer than 20 workers.  Primary means the employer plan pays your medical bills first; Medicare kicks in only in the event the plan doesn’t cover a service or item that Medicare covers.  Medicare doesn’t cover any out-of-pocket costs, such as deductibles and co-payments so, unless the employer coverage is sub-standard, Medicare would probably not pay anything at all.

That is really what the SEP is all about.  It allows the postponing of Part B – and the required monthly premiums – without risking late penalties.  But only in certain circumstances.

There are also a few circumstances for which a SEP is available to drop out of a Medicare Advantage or Part D drug plan without joining another.  These include getting health benefits from a new job, becoming eligible for TRICARE or VA drug coverage, or moving out of the US.

A plan must dis-enroll someone that moves permanently out of its service area, gets imprisoned, loses eligibility for Medicare or if someone has misrepresented other coverage they have.

Timing for Part D

Part D coverage for prescription drugs comes with its own set of rules on enrollment.  These rules are more flexible and allow more choices.  Although Part D is voluntary, there are still penalties for not enrolling when first eligible.

The “best” time to enroll will depend on individual circumstances.

For those without creditable drug coverage, the “best” time is, generally, during the 7 month IEP around age 65.

A Part D plan isn’t required for those who already have creditable drug coverage from another source.  Drug coverage is creditable if its value is at least as good as Part D’s – specifically, if whoever sponsors it pays at least as much money overall for everybody in the plan as Medicare would. Having creditable coverage generally allows the ability to switch to a Part D drug plan without penalty if the other coverage is lost sometime in the future.  It is a good idea to ask for annual confirmation from your plan administrator that your employer’s plan is creditable, though.

Since those who aren’t enrolled in Part A or Part B aren’t eligible for Part D, there should be no late penalties even if the drug coverage at work isn’t creditable.

The SEP for enrolling in a drug plan is only two months after the other coverage ends.  Additionally, the law says that those with Medicare Part A and/or Part B that go for more than 63 days without Part D or other creditable coverage will get a late penalty. It is important to note that they must be actually receiving Part D coverage within 63 days to avoid a penalty.  Since drug coverage actually begins on the first of the month after enrollment, it is better to consider the SEP as two months, not 63 days!

Timing for Medigap Policies

Medigap insurance has no annual open enrollment periods of the kind that exist for other Medicare drug and health plans.  However, there is a six month time frame after enrollment in Part B when Medigap can be bought with full federal protections.  This is a one-time opportunity to buy a policy with no fear of being turned down. Once purchased the policy owner has a guaranteed right to be renewed.

Since federal law doesn’t provide an absolute right to switch from one Medigap policy to another, some consumer advocates advise purchasing the best policy that can be afforded to save the hassle and loss of federal protections of changing plans later on.

Other Enrollment Periods

Annual Open Enrollment Period (OEP)

The OEP runs from October 15th through December 7th each year and is only for people already enrolled in Medicare.  During the annual OEP beneficiaries may sign up for, drop or change Part D prescription drug plans, switch Medicare Part C Advantage plans, enroll in a Medicare Part C Advantage plan for the first time, or go from a Medicare Advantage plan to traditional Medicare. Enrollment changes take effect on January 1 of the following year.  Coverage in existing plans continue until midnight on December 31st.

Plans will send Annual Notice of Changes (ANOC) no later than September 30th.  It is important to read them so that informed decisions can be made as to whether or not changes should be made during the OEP.  It can pay to compare plans annually.  Shopping around can definitely be worth the time it takes.

General Enrollment Period (GEP)

The GEP runs from January 1st to March 31st each year.  During the annual GEP those who missed their IEP or SEP for enrolling in Medicare Part B can enroll.  However, coverage will not start until July 1 of the same year and they may be hit with late penalties that are added to their monthly Part B premiums for all future years!

Medicare Advantage Dis-enrollment Period (MADP)

The MADP provides Medicare beneficiaries another opportunity to dis-enroll from a Medicare Advantage plan and switch to traditional Medicare, but not vice versa.  The MADP extends from January 1st through February 14th each year.  The change will take place the first of the following month.  The same beneficiary can enroll in a standalone Prescription Drug Plan (PDP) for Part D coverage during the MADP as well.  The person may also enroll in a Medigap plan.


There are a few, limited situations when it is possible to appeal a penalty.  However, the government enforces the rules strictly and being ignorant of them isn’t considered a defense.

Part A Penalties –

Part A penalties only apply to those who could’ve gotten Part A services by paying monthly premiums (those without 10 years of work credits in Social Security) but failed to enroll as soon as they were eligible.  Part A penalties add 10% to the premium, but that percentage isn’t multiplied by the number of years of delayed enrollment and they only go on for double the length of time that enrollment was delayed.

Part B Penalties –

Part B penalties amount to an additional 10% for every full 12-month period elapsed between the end of the IEP and the end of the GEP when someone finally signs up less any time covered by group health insurance after age 65 from active employment. Not only are they permanent, but they tend to increase over time as they are calculated based on a percentage of the Part B standard premiums for any given year.

Part D Penalties –

Although Part D prescription drug coverage is voluntary, it also comes with consequences for enrolling later than eligible.

  • Probably won’t be able to enroll in a drug plan until open enrollment
  • Penalized for every month enrolled in Part A or Part B but didn’t have Part D or other creditable coverage after becoming eligible for Medicare at age 65 or through disability at a younger age.

The basis for the penalties is the national average percentage (NAP). Every fall, Medicare works out the average of all the premiums that Part D plans nationwide will charge during the following year.  This dollar amount becomes the NAP for the next year.  The late penalty consists of 1% of the NAP for every month without creditable coverage or Part D.  It works out to 12% a year.  These penalties are permanent and will increase as the NAP increases.

Part 4: Signing Up for Benefits-

Signing Up For Medicare Parts A & B in Initial Enrollment Period (IEP):

Enrollment and disenrollment in Medicare Parts A and B are always handled through the Social Security Administration (SSA) or for those who worked for a railroad, the Railroad Retirement Board.

Information needed before applying:

  • Social Security Number
  • Date of Birth and original birth certificate or certified copy
  • Marital status and, if appropriate, original marriage certificate or certified copy
  • Legal residency and immigration documents, such as a green card, if applicable
  • City and state born
  • First and last name
  • Mother’s maiden name
  • Evidence of employer-or union-provided insurance based on own or spouse’s active employment since turning 65 if planning to delay Part B enrollment for that reason

Although in the past the age for Social Security and Medicare were the same, in recent years, full retirement age for Social Security purposes has gradually been moved back by a couple months.  Therefore, most people, unless they started taking Social Security before age 65, won’t be automatically enrolled in Medicare.  Rather, they must actively apply.

There are three method options for enrolling in Part A and/or Part B.  In most cases any of the methods can be chosen:

  1. Apply on-line – provided the applicant is at least 64 years and nine months old, is not applying for retirement benefits at the time, doesn’t already have any Medicare coverage, and doesn’t live outside the United States:
  • Go to the SSA site: and answer the questions as they are asked in the online form
  • Take note of the “Application Number” that will be on the screen as it will be needed if the application is not completed all at the same time
  • It is crucial to write down the “Confirmation Number” seen once the application is completed and submitted.  It will be needed to call the SSA to ask questions while the application is being processed as the SSA does not keep the number but won’t be able to locate the application without it.
  • Look for an email confirming receipt of the application
  • The required documents will need to be mailed or dropped off at a Social Security office.
  • Although convenient, this method may not be the wisest.  Actually speaking to someone might be better in the long run. This is especially true if delaying Part B or if there are any other complications.

2. Apply over the phone with SSA by calling 800.772.1213 between 7AM and 7PM, Monday through Friday

  • Some questions will be asked through an automated menu
  • Once these are completed, the remainder of the application will be taken verbally by an agent but a 20 minute wait is not unusual
  • It is possible to make an appointment with the SSA to call back at a convenient time to complete the application
  • The required documents will need to be mailed or dropped off at a Social Security office.
  • For those who worked for a railroad, call the Railroad Retirement Board at 1-777-5772, Monday through Friday, from 9AM to 3:30PM.

 3. Apply in person at the nearest Social Security Administration office

  • Call the SSA @ 800-772-1213 between 7AM and 7PM, Monday through Friday to make an appointment for the local SSA office.
  • After answering the questions through the automated menu a representative will schedule the appointment
  • Go to the local SSA office for the appointment with all the necessary documents and complete the application in person with an SSA representative

Regardless of the method used, Social Security will send a computer printout containing the enrollment information.  This hard copy allows the opportunity to check that the information is correct and, if it is not, to get the record changed.

Enrollment for Medicare is required to be at the place of the principal residence.

Although the IEP lasts 7 months, when coverage begins depends on the on which month the enrollment is completed.

Enrollment during 7 month IEP surrounding the 65th birthday –

  • Coverage begins the 1st  day of the month of the 65th birthday if enrollment is completed during the 1st 3 months
  • Coverage begins the 1st day of the month following the 65th birthday if enrollment is completed during the 4th month
  • Coverage begins the 1st day of the 2nd month following the enrollment if enrollment is completed during the 5th month
  • Coverage begins the 1st day of the 3rd month following enrollment if enrollment is completed during the 6th or 7th month

Enrollment during the SEP after 65th– Coverage begins on the 1st day of the month following enrollment

Enrollment during the GEP (Jan 1st through March 31st) – Coverage begins the following July 1st

Signing Up For Medicare Parts A & B after the Initial Enrollment Period (IEP):

For applications after the IEP the Medicare application process has a few different twists:

  • Whether already enrolled in Part A or not, application is made through the SSA
  • Application may or may not be able to be started on line but can’t be completed because the SSA will need to take the addition step of determining eligibility for a Special Enrollment Period (SEP). Accordingly,  applying by phone or in person is recommended
  • If SEP eligibility is determined –
    • The SSA representative will generate a form for the former employer based insurance to sign off on and verify prior acceptable coverage
    • The SSA representative will generate a form for the applicant to request Medicare Part A and/or Part B
    • Additional questions will be asked about prescription drug coverage and may require documentation verifying that it is Medicare “creditable”
    • It is best to apply as soon as possible so as not to have a period of non-coverage
    • If not eligible for a SEP it will be necessary to wait until the next General Enrollment Period (GEP) between January 1st and March 31st and coverage will not start until July 1st

Due to the risks and complications of enrolling after the IEP, the decision to delay coverage is not to be made without serious consideration.  It is wise to plan ahead and verify eligibility for a SEP after the IEP to avoid delays in getting coverage in the GEP and paying lifelong higher premiums due to not applying for Medicare on a timely basis.

Enrolling in Additional Coverage:

Medicare Parts A and B are required in order to have complete Medicare coverage and be eligible to have Medicare Part C Advantage plan, Medigap plan or Part D drug plan.  After enrolling in Medicare Part A and Part B, the coverage can be enhanced with a Medigap plan and prescription drug coverage through a Medicare Part D prescription drug plan.  Or the decision could be made to choose to get all coverage through a Medicare Advantage plan, with or without prescription drug benefits.  These optional plans are purchased through Medicare approved private insurance plans. 

A good place to start shopping for these plans is the website to see which plans are available. However, after narrowing down the choices, it is best to look directly at the plan website, or to speak to them by phone to verify understanding of the plan, what is and isn’t covered, at the actual cost.

Resources Used:

Medicare for Dummies, 2nd Edition by Patricia Barry, AARP Medicare Expert, published by John Wiley & Sons, Copyright © 2015 by AARP.

Making the Most of Medicare: A Guide for Baby Boomers by Dr. Katy Votava, Copyright © 2017 by Goodcare Productions, LLC.