Medicare Moments: Medicare Enrollment Periods


Recorded: December 19, 2011

Jim: Welcome to Fairfax County’s Medicare Moments, the podcast that brings you the latest information on Medicare benefits. I‘m your host Jim Person… Are you close to retirement and not sure how to apply for Medicare? Medicare can be a confusing process; joining us today to discuss the ins and outs of the program is Howard Houghton, the manager of Fairfax County’s Virginia Insurance Counseling and Assistance Program.

Jim: Howard, as the baby boom marches toward retirement, many have little understanding of the health insurance program they’ve heard about all their lives, Medicare. Can you briefly describe the program?

Howard: Sure, Jim. Medicare is a federal health insurance program paid for by just about everyone who works. If you are currently working, you can see your contributions to the program on your pay stub. It is usually referenced as FICA which stands for Federal Insurance Contributions Act.

The program was enacted way back in 1965.

There are four parts: Medicare A, Medicare B, Medicare C and Medicare D. Medicare A is for hospital insurance and other inpatient expenses, Medicare B is for doctor costs and other outpatient services, Medicare C is for Medicare Advantage programs, and Medicare D is for prescription drugs.

Medicare covers people who are 65 and over and people of any age who qualify due to receiving Social Security Disability.

Jim: Medicare doesn’t cover all health insurance costs, is that true?

Howard: Yes, that is correct. Most Medicare A beneficiaries pay deductibles and coinsurance amounts and Medicare B beneficiaries also pay deductibles and coinsurance amounts plus monthly premiums.

Jim: What should people approaching their 65th birthday know about applying for Medicare?

Howard: Well Jim, the first thing they need to know is where to apply. Most folks need to apply at their Social Security Office and it’s best to get an appointment. They should try calling them at 1-800-772-1213 or they can go online and apply online at www.ssa.gov.

Another very important thing to know is that they should enroll in Medicare during their Initial Enrollment Period. This period lasts for seven months: the three months prior to the month of their 65th birthday, the month of their 65th birthday, and the three months following their 65th birthday. Their coverage will begin depending on when they enroll.

If your birthday happens to fall on the 1st day of a month, your coverage will begin the first day of the prior month. For example, if your 65th birthday is on July 1 you should enroll in March, April or May to have your Medicare begin on June 1st.

Jim: OK, so what happens if you miss this seven month Initial Enrollment Period. I’m guessing something bad happens?

Howard: Yes, something bad happens. You can still apply for Medicare but the bad thing is that you will have to pay more for Medicare premiums.

Jim: So, this only works for Part B, right, since Medicare Part A doesn’t require monthly premiums.

Howard: Yes and no. Most people receive Part A without having to pay monthly premiums. This is because they made payroll contributions for at least 10 years. These people don’t receive a penalty for late enrollment in Part A.

However, those who did not make 10 years of payroll contributions must pay Medicare Part A premiums and if they do not enroll during their Initial Eligibility Period, they have to pay 10 percent higher premium costs for a while.

The higher premium is a penalty that lasts for twice the number of years they were eligible for Part A enrollment. So, if you were eligible for Part A for 2 years but did not enroll, you will pay a higher premium for 4 years.

Jim: OK, how about people who pay Part B premiums. What is the penalty for not enrolling during the Initial Enrollment Period?

Howard: The penalty is an extra 10 percent on Part B premiums for each full 12-month period you delay enrolling in Part B.

For example, if your Initial Enrollment Period ended September 30, 2008 and you waited until March 2011 to enroll. Your Part B premium penalty would be 20 percent. While you waited a total of 30 months to enroll, this included only two full 12-month periods.

Jim: And how long does this premium penalty last?

Howard: Unfortunately, you pay the penalty for as long as you are enrolled in Part B.

Jim: That’s quite a penalty!

Sounds like the smart thing to do is to enroll during your Initial Enrollment Period.

For those who missed their Initial Enrollment Period, what do they need to do to enroll?

Howard: If you miss your Initial Enrollment Period, you can enroll for Medicare Part A and B during the annual General Enrollment Period from January 1 – March 31.

Jim: And when would coverage begin?

Howard: Both Part A and Part B would become effective on July 1.

Jim: Ok – but what if you are employed when you qualify for the Initial Enrollment Period? Do you just wait until you retire to apply for Medicare?

Howard: Yes. You can enroll for Part A and/or Part B when you are employed and covered by an active group health plan OR during the 8-month period that begins the month after the employment ends or the group health plan ends, whichever happens first. This is called your Special Enrollment Period.

There’s an important catch though. If you receive health insurance through COBRA or a retiree health plan while working, Medicare does not consider these plans to be “active group health plans” and, therefore, Medicare will not delay your enrollment and you will penalize you for missing your Initial Enrollment Period.

Jim: So what would happen if a person was receiving COBRA or a retiree health plan and missed the Initial Enrollment Period?

Howard: Well, unfortunately, they would need to wait until the next General Enrollment Period to apply and they would face the same premium penalties mentioned earlier. Sadly, a number of my clients have found this out the hard way.

Jim: I understand there are a few differences on how this works if you acquire a disability.

Howard: Yes, most people enroll in Medicare at age 65. Some can enroll at an earlier age if they receive Social Security Disability. These people are automatically enrolled in both Medicare Part A and Part B

Jim: Howard, we are nearing the end of our interview – last words?

Howard: The moral of the story is to pay very close attention to your Medicare enrollment periods so that you can avoid late enrollment premium penalties. It is far better to keep your money in your own pocket!

Jim: Well, there you have it. If you have any questions about applying for Medicare call 1-800-Medicare (1-800-633-4227) or call the County’s local VICAP program at 703-324-5851 or visit www.medicare.gov. And finally, for information on services for older adults, including assistance with Medicare issues, go to www.fairfaxcounty.gov/dfs/olderadultservices and click on health insurance counseling.

I want to thank our guest, Howard Houghton for talking to us about the ins and outs of Medicare and I want to thank our listeners for tuning into our show today. Until next time, this is Jim Person with Fairfax County’s Medicare Moments.

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