How Medicare Initial Enrollment Works
There are four different parts of Medicare—Part A and Part B (known as Original Medicare), Part C (Medicare Advantage plans), and Part D (Medicare prescription drug coverage). Plus, you can get Medicare supplement insurance, also known as Medigap, to help pay for costs that Original Medicare doesn’t cover. If you qualify based on age, the Medicare initial enrollment period is your first chance to sign up for Medicare. You can enroll in Parts A, B, and D or a Medicare Advantage plan. Spend time researching your options beforehand to know whether to choose Original Medicare (Parts A and B) plus optional Part D prescription drug coverage, or whether a Medicare Advantage plan is the best option for you. To help you compare the plans available in your area, use the Medicare plan finder. If you miss the initial enrollment period, you may pay late penalties for Part B, Part D, and Part A (if you don’t qualify for premium-free Part A) when you apply later. Late enrollment penalties can permanently increase the cost of your coverage. But if you qualify for a special enrollment period, you can avoid late enrollment penalties. For instance, if you or your spouse are still working and have insurance through an employer, you may want to delay enrolling in Medicare Part B and Part D. Just make sure you’ll qualify for a special enrollment period if you lose your current coverage and that your prescription drug coverage is considered “creditable.” Creditable drug coverage is expected to pay on average what a standard Medicare Part D plan would. If you don’t have creditable coverage and delay signing up, you could pay a penalty when you sign up for Medicare later (more on that in the “Part D: Drug Coverage” section below). In this example, you could use a special enrollment period to sign up for Medicare when (or before) you lose your current coverage without paying a penalty. Medicare has a tool that can help you decide if waiting to enroll is right for you.
When Is Medicare Initial Enrollment?
The Medicare initial enrollment period lasts for seven months. It begins three months before the month of your 65th birthday, and includes your birth month and the three months that follow your birth month. Some people are automatically enrolled in Part A and Part B coverage. This is because your application for Social Security Benefits or benefits from the Railroad Retirement Board is also your application for Medicare. If you’re receiving benefits for at least four months before you turn 65, you’ll be automatically enrolled when you become eligible.
When Does Medicare Coverage Start?
If you qualify for premium-free Part A, your coverage begins the month you turn 65. If you have to pay a premium for Part A, your coverage starts when Part B coverage starts, following the table below. The month you sign up matters, as it impacts when your coverage begins. If you opt for Original Medicare (meaning you don’t enroll in a Medicare Advantage plan), you’ll need to purchase Part D if you want prescription drug coverage. You may also decide to supplement your Original Medicare coverage by purchasing a Medigap plan from a private company. Here’s more on what each Medicare plan is and its costs.
Part A: Hospital Coverage
Medicare Part A covers hospital expenses. This includes:
Inpatient hospital staysSkilled nursing facility careHome health careHospice careLab testsSurgeries
Many Americans qualify for premium-free Part A coverage. If you’re 65 or older, and you or your spouse have paid Medicare taxes for at least 10 years, you typically don’t need to pay a monthly premium for Part A. However, if you don’t qualify for premium-free Part A, you can purchase Part A coverage. The amount you pay depends on how long you or your spouse worked and paid Medicare taxes. In 2022, the monthly premiums are either $274 (for those who paid Medicare taxes for 30-39 quarters) or $499 (if you paid Medicare taxes for less than 30 quarters). If you must pay for Part A, consider signing up when you’re first eligible. If you miss your initial enrollment period, your monthly premium may increase by 10%. You’ll be responsible for paying this higher amount for twice the number of years you waited to sign up.
Part B: Medical Coverage
Medicare Part B is medical insurance that covers preventive care and medically necessary services, such as:
Outpatient servicesDoctor visitsAmbulance transportMental health servicesDurable medical equipment
Unlike Part A coverage, everyone who signs up has to pay a monthly premium for Part B Medicare. If you get benefits from Social Security, the Railroad Retirement Board, or the Office of Personnel Management, your monthly premium is automatically deducted from your benefits. If you don’t get these benefits, you’ll get a bill for your Medicare premium. The amount you pay is based on your income. In 2022, the standard Medicare monthly payment is $170.10. This is the premium most people pay; however, rates can go up to $578.30 per month, depending on your income. With Medicare Part B, there’s also an annual deductible, copays, and 20% coinsurance for most doctor services, outpatient therapy, and durable medical equipment (DME). If you sign up late for Part B, you’ll have to pay a late enrollment penalty that increases your premium by up to 10% for each year you could have had coverage but didn’t. This penalty is permanent, which means your premium stays higher for the entire time you have Part B coverage.
Part C: Medicare Advantage
Medicare Part C is known as Medicare Advantage. It’s coverage offered by private companies that contract with Medicare to facilitate delivery of your Part A and Part B benefits—you’re required to be enrolled in both Medicare Parts A and B to get a Medicare Advantage plan. Many plans also offer prescription drug coverage, similar to Part D, as well as features not available with Original Medicare like hearing, vision, and dental benefits. Unlike Original Medicare, Medicare Advantage plans often use provider networks. To join one of these plans, it must be available where you live. Here are the most common:
Health Maintenance Organization (HMO) Preferred Provider Organization (PPO) Private Fee-for-Service (PFFS) Special Needs Plan (SNP)
With Original Medicare, you can use any provider or supplier who accepts Medicare, and are not limited to a plan network. The monthly premium, along with your copay and coinsurance, varies based on the plan you choose, but many Medicare Advantage plans charge no premium. Make sure you read the plan details before you sign up, so you know what to expect. There are no late enrollment penalties associated with Medicare Advantage, but if you don’t enroll during the initial enrollment period, you’ll need to wait for Medicare open enrollment from Oct. 15 through Dec. 7 each year.
Part D: Drug Coverage
Original Medicare covers only a limited number of prescription drugs. To fill this gap, Part D was created and went into effect in 2006. Part D costs vary based on the plan you select. You’ll typically need to pay a monthly premium. If your income is above a certain amount, you’ll also pay an income-related monthly adjustment amount (IRMAA). In 2022, this amount varies from $12.40 to $77.90 a month. Similar to Part C, private companies contract with Medicare to provide Part D plans. But if you have a Medicare Advantage plan (Part C) with drug coverage, you often can’t also have (and won’t need) a Medicare prescription drug plan. You don’t want to miss your initial enrollment for Part D. If you’re without “creditable” prescription drug coverage for more than 63 days in a row, you’ll get charged a late enrollment penalty when you do sign up. This penalty is permanently added to your premium—you pay it each month for as long as you have Part D. (Creditable drug coverage is expected to pay as much as a standard Medicare prescription drug plan, on average.)
Medigap (Medicare Supplement Insurance)
A private Medigap policy can help reduce your out-of-pocket expenses for Parts A and B, and you need both to purchase one. Medigap helps pay deductibles, copayments, and coinsurance costs, and some Medigap plans include out-of-pocket maximums (unlike Original Medicare). Though you don’t technically sign up for Medigap during your initial enrollment period, you should sign up for it once you’re enrolled in Part B. Once you’re at least 65 and enrolled in Part B, your Medigap open enrollment period begins and lasts for six months. During this time, insurance companies can’t charge you more or deny coverage for any health issues or preexisting conditions. Note that while Medicare Advantage plans and Medigap policies are both provided by private insurance companies, they aren’t the same. Medicare Advantage plans are a way to receive your Original Medicare benefits, while Medigap supplements Original Medicare benefits by reducing copays, coinsurance, and deductibles. Unlike Medicare Advantage plans, most Medigap policies don’t require that you use in-network providers. They may also offer more flexibility in terms of which doctors you can see when you’re traveling.
What if You Miss Initial Enrollment?
If you miss your initial enrollment period, there are a few other opportunities you have to join Medicare:
Medicare special enrollment period: You may qualify for a special enrollment period if you were covered by a group health plan or other qualifying coverage during your initial enrollment period. If so, you’ll have eight months from the date you lose your coverage or your job ends to enroll in Medicare without penalty. Medicare general enrollment period: If you don’t qualify for a Medicare special enrollment period, you can sign up for Part B (or Part A if you have to pay a premium) during the next general enrollment period—Jan. 1 through March 31 each year. If you signed up for Medicare for the first time during general enrollment, you can enroll in a Part D plan or a Medicare Advantage plan (if you have both Parts A and B) from April 1 through June 30. Medicare open enrollment period: If you didn’t sign up for Part D drug coverage during initial enrollment, you can do so during Medicare open enrollment each year from Oct. 15 through Dec. 7, as long as you already have either Medicare Part A or Part B. If you want to join or drop a Medicare Advantage plan, you can do so during open enrollment as well.
