This article was updated on: 12/10/2016
Medicare can be confusing with all the choices you have to make when you become eligible. The information provided will help you have a better understanding of how all these pieces fit together.
These are the parts of this puzzle:
Below details how each part of Medicare works for each
of these types of coverage.
Different parts of Medicare cover different services. You may hear about four parts of Medicare: Part A, Part B, Part C, Part D and Medigap.
Original Medicare is administered directly by the federal government, is the way most people get their Medicare, and has two parts:
Part A (Hospital Insurance) covers most medically necessary hospital, skilled nursing facility, home health, and hospice care. It is free if you have worked and paid Social Security taxes for at least 40 calendar quarters (10 years); you will pay a monthly premium if you have worked and paid taxes for less time.
Part B (Medical Insurance) covers most medically necessary doctors’ services, preventive care, durable medical equipment, hospital outpatient services, laboratory tests, x-rays, mental health care, and some home health and ambulance services. You pay a monthly premium for this coverage.
Medicare Part D (outpatient Prescription Drug Insurance) is the part of Medicare that provides outpatient prescription drug coverage. Part D is provided only through private insurance companies that have contracts with the government—it is never provided directly by the government (like Original Medicare is).
If you want Part D, you must choose Part D coverage that works with your Medicare health benefits. If you have Original Medicare, choose a stand-alone Part D plan (PDP).
Medicare Part C is not a separate benefit. Part C is the part of Medicare policy that allows private health insurance companies to provide Medicare benefits. These Medicare private health plans, such as HMOs and PPOs, are known as Medicare Advantage Plans. If you want, you can choose to get your Medicare coverage through a Medicare Advantage Plan instead of through Original Medicare.
Medicare Advantage Plans must offer at least the same benefits as Original Medicare (those covered under Parts A and B) but can do so with different rules, costs, and coverage restrictions. You also typically get Part D as part of your Medicare Advantage benefits package. Many different kinds of Medicare Advantage Plans are available. You may pay a monthly premium for this coverage, in addition to your Part B premium.
A Medicare Supplement Insurance (Medigap) policy, sold by private companies, can help pay some of the health care costs that Original Medicare doesn't cover, like copayments, coinsurance, and deductibles. Some Medigap policies also offer coverage for services that Original Medicare doesn't cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs. Then your Medigap policy pays its share. A Medigap policy is different from a Medicare Advantage Plan. Those plans are ways to get Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits.
Who is eligible for Medicare:
When you first become eligible for Medicare, you’re enrolling in Original Medicare (Part A and Part B), the government-run health-care program for those 65 and older and certain individuals who qualify by disability or having end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (Lou Gehrig’s disease).
You are either automatically enrolled in the Medicare or you will need to sign up for it.
When you turn 65, you will automatically be enrolled in Medicare Part A and Part B (Original Medicare) if you are receiving retirement benefits from Social Security Administration (SSA) or the Railroad Retirement Board (RRB).
If you’re automatically enrolled in Original Medicare, your Medicare benefits will start on the first day of the month that you’re eligible for coverage. For example: If your 65th birthday is October 20, 2016 and you automatically qualify for Medicare, your Medicare effective date would be October 1, 2016. If your birthday is on the first day of the month, Medicare Part A and Part B will be effective on the first day of the prior month. So then, if your 65th birthday is October 1, your Medicare effective date would be September 1.
You will need to enroll
If you aren’t already receiving retirement benefits when you turn 65, you won’t be eligible for automatic Medicare enrollment and will need to sign up for Medicare coverage during your Initial Enrollment Period (see below for more details).
If you have health coverage because you’re still currently working (or you’re covered under a working spouse), you may choose to delay enrollment in Medicare Part B, since this part of Medicare comes with a monthly premium. You will get a Special Enrollment Period to sign up for Medicare that starts when you stop working or your employer-sponsored health insurance ends. If you don’t sign up during this Special Enrollment Period, you can do so during the General Enrollment Period (which runs from January 1 to March 31), but may owe a late-enrollment penalty (see below for more details).
Medicare Part A enrollment when you turn 65 will depend on if you have enough work history to get Part A without a premium. If you’ve worked at least 10 years (40 quarters) and qualify for premium-free Medicare Part A, you’ll be automatically enrolled in Part A when you turn 65 even if you’re still working at the time. However, if you don’t have enough work quarters to get Part A without a premium, you’ll need to manually enroll in Part A. You can do so during your Initial Enrollment Period or, if you’re still working, during a Special Enrollment Period when you stop working or your health coverage ends.
Medicare enrollment periods for Original Medicare
If you need to manually enroll in Medicare Part A and/or Part B, you can sign up during the following times:
Initial Enrollment Period (IEP) — When you are first eligible for Medicare, you have a seven-month period to sign up. This seven-month period begins three months before your 65th birthday, includes the month you turn 65, and ends three months after you turn 65. If you qualify because you’re receiving disability benefits, it starts three months before your 25th month of disability benefits from the Social Security Administration (SSA) or Railroad Retirement Board (RRB) and lasts seven months.
General Enrollment Period (GEP) — If you miss your Initial Enrollment Period, you can sign up between January 1 through March 31 each year. Your coverage will begin July 1. You may have to pay a late-enrollment period in the form of a higher premium for Part A and/or Part B.
Special Enrollment Period (SEP) — If you or your spouse (or family member if you are disabled) is currently working and you are covered by employer or union-sponsored health insurance, you will have a Special Enrollment Period when your coverage ends, or you stop working (whichever happens first), up to two full months after the month your coverage ends. You may also be eligible for a Special Enrollment Period in other situations. For example, if you are serving as an international volunteer for a tax-exempt organization and have other health coverage, you may get an SEP when you return to the United States.
Medicare enrollment if you’re disabled, have ALS, or have ESRD
You can also qualify for Medicare before age 65 in certain situations. If you are under age 65 and receiving Social Security or certain Railroad Retirement Board disability benefits, you’re automatically enrolled in Part A and Part B after 24 months of disability benefits. You will get your Medicare card in the mail three months before your 25th month of disability.
If you have ALS (amyotrophic lateral sclerosis, also called Lou Gehrig’s disease), you automatically get Part A and Part B the month your disability benefits begin.
If you have end-stage renal disease (ESRD), different rules apply. You can contact the Social Security Administration to learn more about Medicare eligibility because of end-stage renal disease by calling 1-800-772-1213, Monday through Friday, from 7AM to 7PM (TTY users can call 1-800-325-0778). The start of your Medicare coverage may vary depending on your situation.
Medicare enrollment for Medicare plans
When it comes to certain types of Medicare coverage, such as Medicare Advantage (Part C) or Medicare prescription drug coverage, Medicare enrollment and eligibility works differently. Medicare Advantage plans are available through private insurance companies that are contracted by Medicare and provide a different way to get your Original Medicare benefits. Some plans may also offer additional benefits that Original Medicare doesn’t cover, such as routine vision or dental, wellness programs, or prescription drugs.
Stand-alone Medicare prescription drug coverage (Part D) is also offered through Medicare-approved private insurance companies and, like Medicare Advantage plans, there are different rules when it comes to eligibility and when you can enroll. You may choose to enroll in a Medicare Prescription Drug Plan, which provides stand-alone benefits if you have Original Medicare. Or you can get your prescription drug coverage included through a Medicare Advantage plan, also known as a Medicare Advantage Prescription Drug plan.
You’ll generally only be able to enroll in a Medicare Advantage or Medicare Prescription Drug Plan during certain times of the year known as “election periods.” Take a look at this article to learn when you’re first eligible to enroll in Medicare Advantage plans; for more information on enrolling for Medicare prescription drug coverage, visit this page.
You may also be interested in learning about how to sign up for Medicare Supplement (Medigap) plans, which may help pay for certain out-of-pocket costs in Original Medicare, including cost sharing and emergency overseas travel coverage.
Enrolled in Medicare: making changes to your Medicare coverage
Once you’re enrolled in Original Medicare or a Medicare Advantage plan, you can generally only make changes to your coverage during certain times of the year. The Annual Election Period (AEP), which runs from October 15 through December 7, is a good time to make changes to your Medicare health or prescription drug coverage. Take a look at the chart below to learn about the different changes you can make during this period.
Your new coverage will begin January 1 of the following year, as long as the plan gets your enrollment request by December 7. In most cases, you must stay enrolled for the calendar year.
What changes can I make during the Annual Election Period?
October 15 through December 7
If you currently have this type of Medicare coverage: You can:
Original Medicare Switch to a Medicare Advantage plan with prescription drug coverage.
Switch to a Medicare Advantage plan without prescription drug coverage.
Enroll in a Medicare Prescription Drug Plan, if you do not have one.
Disenroll from your Medicare Prescription Drug Plan, if you have one.
Switch from one Medicare Prescription Drug Plan to another Medicare Prescription Drug Plan.
Stay with your current coverage.
Medicare Advantage plan Switch back to Original Medicare.
Switch from one Medicare Advantage plan to another Medicare Advantage plan.
Switch from a Medicare Advantage plan that doesn’t offer prescription drug coverage to another Medicare Advantage plan that offers prescription drug coverage.
Switch from a Medicare Advantage plan that offers prescription drug coverage to another Medicare Advantage plan that doesn’t offer prescription drug coverage.
Stay with your current plan.
Note: Individuals in a Medicare Advantage plan can also make changes during the Medicare Advantage Disenrollment Period that runs from January 1 through February 14. During this time, you can leave your Medicare Advantage plan and return to Original Medicare. If you use this election period to disenroll from a Medicare Advantage plan, you can also enroll into a stand-alone Medicare Prescription Drug Plan during this time.
Medicare enrollment if you have a special situation
Once the Annual Election Period has passed, you’re much more limited in the types of changes you can make to your Medicare coverage. However, in certain situations, you may be eligible for a Special Election Period to enroll in a Medicare plan, switch plans, or make other changes to your coverage.
Some examples of situations that may qualify you for a Special Election Period include (but aren’t limited to):
You move out of your Medicare plan’s service area.
You are eligible for Medicaid coverage – or you lose your eligibility.
You get Extra Help (also known as the Low-Income Subsidy) with your Medicare prescription drug costs.
Your Medicare plan leaves the Medicare program.
You live in, just moved into, or just moved out of a nursing facility or other institution.
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