For most people, Medicare eligibility starts three months before you turn 65. During what’s called your initial eligibility window, which lasts for seven months, you can enroll in original Medicare (Parts A and B), Medicare Part D or Medicare Advantage. You don’t have to sign up for Medicare at all even if you’re eligible, but it’s the best option for low-cost health insurance for seniors. So unless you have access to free or low-cost insurance elsewhere, Medicare is a good choice. If you don’t sign up for Medicare when you first become eligible, but later decide that you want it, you can still sign up during general enrollment, but you’ll pay a penalty fee on top of any premiums that you might owe.
But what about private marketplace plans? Millions of people bought health insurance on the Obamacare marketplaces. If you have a marketplace plan but now need to sign up for Medicare, don’t worry. The transition should be relatively smooth. You’ll just need to keep track of a few things to make sure you get the right coverage without paying double for the privilege.
Quick Information About Enrollment
You have seven months to sign up for Medicare once you’re first eligible: three months before the month you turn 65, the month you turn 65, and three months following your birthday month. If your birthday is February 11, for example, then you’ll have from November through May to enroll. Outside of this initial eligibility window, there are other signup periods for Medicare:
- General enrollment: January 1 through March 31
- Open enrollment: October 15 through December 7
- Special enrollment periods based on individual circumstances
For most people, it’s a good idea to sign up when first eligible because there are penalty fees associated with waiting. But if you have health insurance through work, aren’t retired and aren’t collecting Social Security benefits, then you can hold off on Part B until you retire. Once that happens, you have eight months to enroll without penalty. There may be other special circumstances that let you enroll beyond your eligibility window, so check with Social Security and your company’s HR department to make sure you’re on the right track.
Watch for Automatic Enrollment
If you have a private health plan from the marketplace, be on the lookout for automatic enrollment into Medicare Advantage, a process known as “seamless conversion.” Lots of companies have permission from the Centers for Medicare and Medicaid Services (CMS) to enroll beneficiaries into MA plans once they’re eligible. All it takes is a letter giving the beneficiary sufficient notice (60 days), but plenty of people miss these letters or throw them away without reading them, assuming they’re junk mail.
The CMS temporarily halted granting permission to new seamless conversion applications last year, but 29 companies currently have the right to do it. Once you’re enrolled into a company’s Medicare Advantage plan, you have to use the plan’s network to see doctors or get prescriptions filled. MA plans can be a good option for many Medicare enrollees, and they’re gaining popularity. But as a healthcare consumer, you should have a choice about which company you sign on with. If you’re enrolled in a health plan right now and nearing Medicare eligibility, don’t ignore mail from health insurance companies, especially your own. One of these letters may be telling you about automatic enrollment.
You can opt out of seamless conversion, but you have to do it right away. If you wait too long, then you may be stuck with your MA plan until you can change it during open enrollment (October 15 to December 7). Enrolling in original Medicare does not cancel out seamless conversion, either. A traditional Medicare plan will not go into effect if you’ve been automatically enrolled into a company’s Advantage plan.
Making the Transition
When you sign up for Medicare during your eligibility period, you’ll be given the date when your insurance will take effect. On that day, you should call your marketplace insurance carrier to cancel your marketplace plan so that you don’t have issues with overlapping coverage. You might think that your insurance providers would talk to each other and cancel your private coverage once you have Medicare, but this isn’t the case. You have to be proactive in canceling your marketplace policy.
In fact, it’s a good idea to contact your marketplace insurance carrier before your Medicare policy begins to make sure you understand the cancellation process. Since your tax credits end when your Part A coverage begins, you could wind up with a hefty insurance bill for your marketplace plan if you don’t take the necessary steps to cancel it.
When your 65th birthday is on the horizon, it’s time to decide whether or not you want to get into a Medicare program. You’re not obliged to sign up for Medicare at all, but if you do decide to go with original Medicare or a Medicare Advantage plan, then start the process early so there’s no confusion or delays when you need to see your doctor.