Some people consider themselves planners, while others prefer to be more spontaneous and improvise as they go. But when it comes to enrolling in Medicare, there’s no room for the latter—even the most talented ad-libber will need to plan ahead.
You can’t enroll in Medicare whenever you want, even after you’ve reached the minimum age. There are specific enrollment periods you need to adhere to. And if you enroll at the wrong time, you could have to pay a monthly penalty. Worse? Sometimes that penalty is permanent.
Today, I want to introduce you to the age-based Medicare enrollment periods. I’ll explain each of the different enrollment periods, as well as list the penalties you could face if you miss them.
The information and analysis contained within this article appears for your consideration, but it does not constitute individualized financial advice. Always act at your own discretion.
Don’t Miss These Age-Based Medicare Enrollment Periods
Most people become eligible for Medicare based on their age—and the age to watch for just about everyone is 65.
So, as you approach your 65th birthday, you should familiarize yourself with the following Medicare enrollment periods. More than one might apply to you.
Initial Enrollment Period (IEP)
If you plan on enrolling in Medicare, your Initial Enrollment Period (IEP) depends on your birthday. It starts three months before you turn 65 and ends three months after the month you turn 65.
Example: If your birthday is May 12, your IEP begins Feb. 1 and ends on Aug. 31 in the year you turn 65.
It’s a bit different if your birthday lands on the first of the month, though. In that situation, your IEP begins four months before you turn 65 and ends two months after the month you turn 65.
Example: If your birthday is May 1, your IEP begins Jan. 1 and ends on July 31 in the year you turn 65.
You have the same amount of time to enroll (seven months)—the goalposts are just shifted.
Your IEP applies to all Medicare “Parts”: Original Medicare (Parts A and B), Advantage (Part C), and prescription (Part D). However, if you sign up for a Part C during this time, you can drop it at any point in the next 12 months and change to Original Medicare without penalty.
If you fail to enroll for Medicare during the IEP, you’ll need to sign up during a General Enrollment Period (GEP) or a Special Enrollment Period (SEP).
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General Enrollment Period (GEP)
The General Enrollment Period (GEP) for Medicare Part A and Part B runs every year from Jan. 1 through March 31.
When someone already has Part A and enrolls in Part B for the first time during a GEP, it triggers a two-month Special Enrollment Period (SEP) where they can enroll in Part D (prescription drug coverage).
Enrolling during a GEP often means you have to pay a late enrollment penalty, which affects your monthly premiums. For Part A, it’s a temporary penalty, but it’s usually a permanent penalty for Parts B and D.
Related: Medicare FAQs: Your Questions Answered
Open Enrollment Period (OEP)
The Open Enrollment Period (OEP), which runs from Oct. 15 to Dec. 7 for each year, allows people to make changes to their Medicare coverage (generally involving Part C and/or Part D). Among the changes you can make:
- If you’re in Medicare Advantage:
- Switch from one Medicare Advantage plan to another
- Switch from Medicare Advantage to Original Medicare
- If you’re in Original Medicare:
- Switch from one Part D prescription plan to another
- Switch from Original Medicare to Medicare Advantage
Any changes made during the OEP typically take effect on Jan. 1 of the following year.
Medicare Advantage Open Enrollment Period (MA-OEP)
The Medicare Advantage Open Enrollment Period (MA-OEP) is from Jan. 1 to March 31, or within the first three months in which you get Medicare, and applies only to people who are already enrolled in Medicare Advantage.
This period is used to make changes from your existing plan, or switch to Original Medicare (and, if you want, enroll in Part D).
Coverage begins on the first of the month after the plan receives your request.
Related: Original Medicare vs. Medicare Advantage: How Do These Plans Differ?
Special Enrollment Period (SEP)
A Special Enrollment Period (SEP) is a one-time enrollment period triggered by certain events, such as:
- Having or had health insurance through your or your spouse’s employer (or a family member’s employer if you have a disability and they had a large group health plan)
- Having TRICARE
- Losing Medicaid coverage
- Missing the opportunity to sign up because of inaccurate or misleading information from an employer or health plan
- Missing the opportunity to sign up because of exceptional conditions (requires contacting Social Security to ask for a SEP)
- Missing the opportunity to sign up because you (or an authorized representative, guardian, or caregiver) were impacted by a natural disaster or declared emergency
- Missing the opportunity to sign up while you were incarcerated
- Volunteering and serving in a foreign country
If you enroll during an SEP, you are usually exempt from any late-enrollment penalties. When enrollees sign up for Medicare Part A or Part B during an SEP, they typically have two months to enroll in a Part C or Part D plan. In certain situations, you may be eligible for an additional Medicare Advantage SEP.
A few circumstances where you aren’t eligible for an SEP include (but aren’t limited to):
- COBRA coverage or retiree coverage ending
- Missing your sign-up window when you stopped working or lost employer-based coverage
- Having or losing Marketplace coverage
- Having End-Stage Renal Disease (ESRD) (Learn more about ESRD Medicare coverage)
If you qualify for an SEP, you only have a limited amount of time. The length varies depending on the triggering event, but it’s frequently either six or 12 months.
Were you to miss the window, you would have to wait until the next GEP and may need to pay a monthly penalty.
Related: 14 Ways Retirees Can Reduce Their Medicare Costs
How Much Are the Late Enrollment Penalties?
While the word “penalty” is often associated with one-time fees, this isn’t the case for Medicare late enrollment penalties. These penalties are added to one’s monthly premium.
How long it increases your premium and how much extra you pay depends on which Medicare Part it is and how late you were signing up.
Importantly, because the penalties are percentages of premiums, the amount of penalty you pay could change each year as premiums change. Also, any penalties are rounded to the nearest to the nearest 10¢. So, a penalty that came out to $60.82 would be rounded down to $60.80, while a penalty that came out to $60.87 would be rounded up to $60.90.
Part A Late Enrollment Penalty
If you don’t sign up for Medicare Part A during your IEP and aren’t eligible for an SEP, your penalty may be an increase of 10% to your monthly premium.
Fortunately, this is just a temporary penalty. It lasts for twice the number of years you didn’t sign up on time. For instance, if you signed up two years later, you would have to pay a 10% higher premium for four years.
Part B Late Enrollment Penalty
If you miss your IEP for Part B and don’t qualify for an SEP, your penalty may be an increase of 10% to your monthly premium for every full 12-month period you could have enrolled in Part B but didn’t.
Unfortunately, this is a permanent penalty that you typically pay for as long as you’re on Medicare. For example, if you didn’t sign up for Part B for two full years, your penalty would be a 20% increase to your monthly premium.
Part C Late Enrollment Penalty
Medicare Advantage (Part C) plans don’t have late enrollment penalties.
However, to enroll in Part C, you need to be enrolled in Part A and Part B and pay the applicable premiums. Therefore, it’s important to pay attention to enrollment periods so you don’t have to pay any Part A or Part B penalties.
Part D Late Enrollment Penalty
If you don’t enroll in Part D when you initially get Medicare, or if you go 63 days or more without creditable drug coverage, a penalty will apply.
The penalty may be an increase of 1% to your monthly premium for every month in which you were eligible but waited to join a Medicare drug plan and didn’t have creditable drug coverage.
For instance, if you waited 10 months after becoming eligible for Medicare and didn’t have credible drug coverage, to enroll in Part D, you would have to pay a 10% late enrollment penalty on top of your monthly plan premium.
The penalty is based on the “national base beneficiary premium,” which changes every year. Typically, you pay this penalty for as long as you’re on Medicare.
Again, you won’t be charged a Part D penalty if you have creditable drug coverage. Medicare Advantage (Part C) plans with prescription drug coverage, also known as MA-PDs, count as creditable drug coverage. Additionally, you won’t be charged a penalty if you qualify for Extra Help.
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