Before Enrolling, Be Fully Informed:
Information for Choosing Between Traditional Medicare and Medicare Advantage
Who is eligible for Medicare?
- Individuals entitled to Social Security retirement insurance and 65 years of age and older;
- Individuals entitled to Social Security disability benefits for not less than 24 months;
- Individuals entitled to Railroad Retirement benefits or Railroad Retirement disability benefits;
- Individuals diagnosed with end stage renal disease;
- Individuals with ALS;
- A federal, state or local government employee who is not eligible for Social Security retirement or disability benefits but have worked and paid the Medicare Part A “hospital insurance” portion of the employee’s FICA taxes for a sufficient period of time. (Federal employees became subject to the hospital insurance portion of FICA in January 1983. Most newly hired state and local employees, not otherwise covered under Social Security, started paying the hospital insurance portion as of April 1986.
- Note: Individuals who are not otherwise eligible for Medicare, but who are over age 65 may purchase Medicare coverage by paying a monthly premium.
Medicare eligibility for Social Security and Railroad Retirement beneficiaries begins on the first day of the first month in which the individual attains age 65. This is also the date upon which individuals not otherwise eligible for Medicare are entitled and may purchase coverage.
Individuals receiving Social Security or Railroad Retirement disability benefits become eligible for Medicare coverage in the 25th month of receiving those benefits. Individuals who have end stage renal disease usually become eligible on the first day of the third month of a course of renal dialysis treatments. Individuals with ALS (Lou Gehrig’s disease) become eligible when they are eligible for Social Security disability benefits, without a twenty-four month waiting period.
Individuals receiving Social Security retirement or disability benefits, or railroad retirement checks, will be sent information by the Social Security Administration (SSA) a few months before becoming eligible for Medicare. Residents of one of the 50 states, Washington, D.C., the Northern Mariana Islands, Guam, American Samoa, or the U.S. Virgin Islands, will automatically be enrolled in Medicare Parts A and B by SSA. However, because there is a premium payment required for Part B coverage, beneficiaries may make the choice to turn it down.
Individuals who are 65 and not receiving Social Security retirement or disability benefits, or railroad retirement checks, at the time of eligibility may apply to enroll in Medicare Parts A and B during an initial enrollment period, defined below, by submitting an application with the Social Security Administration
While participation in Medicare is voluntary, one should think through the serious consequences of not applying, such as late enrollment fees if one decides to enroll later, and health risks if no other health insurance is available. The costs of premiums alone should not be an overriding factor in one’s decision to participate in the Medicare program.
NOTE: Residents of Puerto Rico must apply for Medicare. It is not automatic.
If you’re not already getting retirement or disability benefits, you may contact Social Security to sign up online for Medicare during your “Initial Enrollment Period,” the three months before your 65th birthday, your birth month, and the three months after your birth month. You can sign up for Medicare even if you don’t plan to retire at age 65.
A person not entitled to Medicare through receipt of Social Security or Railroad Retirement benefits must make a separate application for Medicare and agree to pay monthly premiums. See our page on Medicare cost sharing for details on premiums. A person may elect to not yet apply for Social Security or Railroad Retirement benefits at age 65 and still be entitled to Medicare coverage. In this case a separate application for Medicare benefits is required. Application for benefits can be made online at www.ssa.gov, by telephone at 1.800.772.1213 or at any Social Security office. Railroad Retirement beneficiaries should contact the Railroad Retirement Board to enroll.
An individual may make application to enroll in Medicare three months prior to the first month in which they would be eligible for benefits and for three months after their first month of eligibility. As mentioned previously, this period is referred to as the “initial enrollment period.”
Enrollment in the first three months of the initial enrollment period will result in coverage beginning on the first day of the first month in which the individual attains age 65. Enrollment in the month in which the individual attains age 65 will result in coverage beginning in the following month. Effective January 1, 2023, enrollment during the months following the 65th birthday will result in coverage beginning on the first day of the months following the month in which the individual enrolls.
An individual turns 65 in May. Her initial enrollment period will be February 1, through August 31. Depending upon the month in which she enrolls her coverage period would be as follows:
There is also a “general enrollment period” which occurs in the first three months of each year. An individual who fails to enroll during his initial period of eligibility can only subsequently enroll in Medicare Part B during this general period (and may be required to pay a premium surcharge for late enrollment), unless he falls under the provisions of the working elderly discussed below.
Enrollment in Part A can take place at any time after age 65 and coverage can be retroactive up to six months unless the individual must purchase Part A coverage due to ineligibility for premium-free benefits. If an individual must purchase coverage, enrollment in Part A can only occur during the initial or general enrollment period and coverage will begin on the first day of the month following the individual’s enrollment. Similarly, for beneficiaries enrolling in the general enrollment period, Part B coverage will begin the first day of the month following the individual’s enrollment in Part B.
Enrollment is generally handled by the Social Security Administration through their local offices. Railroad Retirement beneficiaries should contact the Railroad Retirement Board to enroll.
Enroll Online: Individuals may also enroll online at www.ssa.gov. Click “Sign Up for Medicare” and then “Apply online.” (Site visited on August 7, 2023). If the individual is 65 or older, the individual can enroll online for Parts A and B, or Part A only. If an individual previously declined or never signed up for Part B, the individual can also enroll in Part B online during specific time periods. The application process can take less than 10 minutes.
At the time that the Medicare program was established in 1965 most people retired at 65, began to receive Social Security or Railroad Retirement benefits, and automatically began their participation in the Medicare program at that age. However, as people began to work past the age of 65, and as Medicare began to try to contain costs, Medicare coverage and enrollment policy changed.
In the early 1980’s several pieces of legislation were passed which made Medicare benefits secondary to benefits payable under an employer group health plan (EGHP) for employees and their spouses age 65 and older who continued to work. Further, employers are prohibited from offering a different health plan to Medicare eligible employees and their spouses than that which is offered to other employees. Employers with less than 20 employees are exempt from these laws but may participate voluntarily.
These changes led to the establishment of an additional “special enrollment period” (SEP) for the working elderly. Individuals age 65 or older who continue to be covered by an EGHP that covers 20 or more employees through their own or a spouse’s active employment may delay their enrollment in Medicare Part B without incurring a penalty. Since their EGHP is the primary payer for these workers, they may not want to pay for Medicare coverage which might be duplicative.
The law is different for workers of smaller businesses. Beneficiaries, age 65 or older who continue to be covered by an EGHP that covers less than 20 employees through their own or a spouse’s active employment, will probably need to enroll in Part B in spite of Medicare’s SEP provisions. For small business employees, Medicare will be primary payer of health care expenses and the EGHP is secondary. It is best to check with the EGHP’s administrator to determine whether enrollment in Medicare Part B is necessary for primary coverage and confirm the information in writing,
As noted above and further explained below, failure to enroll during this “special enrollment period” may result in a premium surcharge and the individual may not be allowed to enroll until the next general enrollment period.
Individuals covered under an EGHP can enroll in Medicare while still covered by the EGHP. Additionally, beneficiaries are entitled to a “special enrollment period” (SEP) when the earlier of two things occurs: the employment through which they have the insurance ends, or the insurance terminates. The SEP enrollment period runs for a period of eight months.
Under these SEP provisions, an individual can enroll in Medicare while still covered by an EGHP, and elect to have coverage begin in that month or any of the following three months. If an individual enrolls during the month that the individual is no longer covered by the EGHP, Medicare coverage begins in that month. If the individual enrolls during the remaining seven months of the SEP, the coverage begins on the first day of the month after enrollment.
Mary attained age 65 in 2020, but continued to work and be covered by an EGHP. In April 2023 she filed an application for monthly Social Security benefits and Medicare because she planned to retire on June 30, 2023. She can elect to have Medicare coverage begin either in April of 2023, or in any of the three following months. She elects to have coverage begin in July of 2023, since she has coverage under her EGHP until that time.
Mary could also have chosen to delay her application for Medicare until July 2023, the first full month she was not covered by an EGHP. This would also result in Medicare coverage becoming effective on July 1, 2023, the first day of the month that she was no longer covered by the EGHP. However, should Mary have delayed application for Medicare until August 2023, her coverage would not have been effective until September of 2023. This is because enrollment in Medicare during the seven months following the first full month in which an individual is no longer covered by an EGHP will result in coverage beginning the first day of the month after the month of enrollment. Therefore, to avoid any gaps in coverage it is advisable to enroll either in the three months before, or in the actual month your employment ends.
It is important to remember that that the Special Enrollment Period is only available to people covered by an EGHP by virtue of their own or a spouse’s active employment. COBRA-qualified beneficiaries who have delayed their enrollment in Medicare Part B do not qualify for a special enrollment period to enroll in Part B after their COBRA coverage ends because COBRA coverage is not as a “current” employee. See below for further discussion of COBRA and Medicare.
New Special Enrollment Periods Due to Exceptional Circumstances
In December 2020, the Consolidated Appropriations Act of 2021 was enacted and included several key provisions that allow special enrollment periods (SEP) for individuals who meet certain exceptional conditions and who missed their Medicare enrollment period. Effective January 1, 2023, the following special circumstances qualify for special enrollment period into Medicare, expanding the Medicare enrollment opportunities and reducing multi-month coverage gaps in Medicare:
- An SEP for individuals impacted by an emergency or disaster that will allow CMS to provide relief to those beneficiaries who missed an enrollment opportunity because they were impacted by a disaster or other emergency as declared by a Federal, state or local government entity. The duration of the SEP is six months after the end of the emergency declaration. This SEP also applies if the disaster or emergency takes place where the individual’s authorized representative, legal guardian or person who makes health care decisions on their behalf resides.
- An SEP for health plan or employer error that will provide relief in instances where an individual can demonstrate that their employer or health plan materially misrepresented information related to enrolling in Medicare timely. The duration of this SEP is six months after the individual notifies SSA and it will allow for a written attestation from the beneficiary when documentation of misinformation from the employer or health plan is not available and will also include brokers and agents of health plans as sources of misinformation.
- An SEP for formerly incarcerated individuals that will allow individuals to enroll following their release from correctional facilities. The duration of this SEP is 12 months post-release and allows individuals to choose between retroactive coverage back to their release date (not to exceed 6 months) or coverage beginning the month after the month of enrollment. An individual selecting retroactive coverage must pay the premiums for the retroactive covered time period.
- An SEP to coordinate with termination of Medicaid coverage after January 1, 2023 that will allow individuals who have missed a Medicare enrollment period to enroll in Medicare after termination of Medicaid eligibility. This SEP allows individuals to choose between retroactive coverage back to the date of termination from Medicaid (but no earlier than January 1, 2023) or coverage beginning the month after the month of enrollment. An individual selecting retroactive coverage must pay the premiums for the retroactive covered time period.
- An SEP for other exceptional conditions that will, on a case-by-case basis, grant an enrollment period to an individual when circumstances beyond the individual’s control prevented them from enrolling during the IEP, GEP or other SEPs. This SEP provides for a minimum 6-month duration to enroll.
To enroll in Medicare using one of these new special enrollment periods, individuals should complete and submit form CMS-10797 to the Social Security Administration.
Failure to Enroll
There can be serious implication for individuals who fail to enroll in Medicare during their proper enrollment period. There is the surcharge of 10% per year assessed on the Part B premium for each 12 calendar months that an individual fails to enroll. What can be more serious, is that failure to enroll during the initial or special enrollment period will result in the individual not being allowed to enroll in Medicare Part B until the general enrollment period during the first three months of each year. Coverage for Part B benefits then would not begin until the first day of the month following the individual’s enrollment in Part B. As a result, there may be a period of time when an individual, having no Part B Medicare coverage, may be vulnerable to costly out-of-pocket medical expenses.
It is important to note that an individual entitled to Social Security or Railroad Retirement benefits may enroll in Part A at any time and receive up to 6 months retroactive coverage without penalty. It is only Part B coverage which is subject to enrollment period restrictions and to a surcharge. An exception to this rule is those individuals not entitled to premium-free Part A coverage but who elect to pay the premium and participate voluntarily. They will be subject to the enrollment restrictions and the surcharge.
A decision to deny Medicare eligibility or enrollment, for whatever reason, can be appealed to the Social Security Administration or Railroad Retirement Board. When a person’s enrollment rights have been prejudiced because of the action, inaction, misrepresentation or error on the part of the federal government, or due to special enrollment periods like employer group coverage or the exceptional circumstances described above, she or he cannot be penalized or caused hardship. If an individual can demonstrate this to be the case, the decision to deny Medicare eligibility or enrollment, or the imposition of a penalty surcharge, may be reversed. Appeals for individuals denied Medicare enrollment, including for one of the Special Enrollment Periods, are handled by the local Social Security office. It is important if an individual believes she or he is being unfairly or improperly denied Medicare enrollment that the individual file an appeal.
- COBRA: A Summary
- People with Medicare Beware: COBRA Is Not Coverage as a “Current” Employee
- COBRA and Medicare, Part II
- COBRA III: Cautions for Employees of Small Businesses
- House Committees Work to Address Problems Coordinating COBRA and Medicare Enrollment
- Cobra Notices Revised to Include More Medicare Information
Articles and Updates
- Counterweight to Medicare Advantage Marketing Still Needed October 5, 2023
- Look Before You Leap: Medicare Annual Enrollment Period Approaches September 28, 2023
- Spotlight on the Importance of Medigap September 14, 2023
- Medicare Enrollment Numbers June 29, 2023
- Highlighting a Medicare Special Enrollment Period (SEP): Enrolling in Medicare After Termination of Medicaid Coverage May 25, 2023
- Traditional Medicare or Medicare Advantage? February 9, 2023
- Medicare Annual Enrollment Period Ends December 7th December 1, 2022
- CMS Issues Final Rules That Address Significant Medicare Enrollment Pitfalls for Parts A and B November 3, 2022
- “Medicare & You” Continues to Reverse Bias Towards, and More Accurately Describe, Medicare Advantage September 28, 2022
- CMS Issues Proposed Rule That Will Address Significant Medicare Enrollment Pitfalls and Provide Other Important Help April 28, 2022
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