Medicare’s annual General Enrollment Period (GEP) begins on January 1st   and ends on March 31st every year.

Why is it important to know if you need to enroll in Medicare during the annual General Enrollment Period?

Medicare enrollment rules are strict, unforgiving, and punitive.  If you have to enroll during the General Enrollment Period you may pay Part B premium penalties for life and most have a gap in coverage, typically to the following July 1st.  Since Part B premiums are calculated back to the year you turned 65 and as of 2008 are income indexed, these premium penalties can be very, very expensive.   The premium penalties tend to be levied on professionals who worked beyond age 65.  This is counter-intuitive since this group often paid Medicare taxes throughout their entire careers and postponed using Medicare but it is the reality.

What’s worse, if you miss the March 31st deadline EVEN BY A DAY, you won’t be able to apply for coverage again until the General Enrollment Period in 2012 which results in a July 1, 2012 Medicare effective date.

Remember, the government automatically enrolls individuals who are already receiving Social Security in Medicare Parts A and B (not D) when they turn 65.  Everyone else has to enroll in Medicare through Social Security themselves.  Many types of advisors work strategically with their clients regarding when to take Social Security but overlook the Medicare piece.  This is generally a Part B (medical insurance) issue or problem not Part D (drug plan).   In 2011 Part D premiums are income indexed too but they are less and other coverage is considered “creditable.”   Not handling Part D enrollment properly, however, can also result in a gap in prescription drug coverage which can obviously be problematic.

The annual General Enrollment Period is available for two groups of individuals;  those who did not sign up for Medicare during their Initial Enrollment Period when they were turning 65 and those who continued working beyond age 65 and did not enroll in Medicare during their Special Enrollment Period(SEP).

Individuals who missed the opportunity to enroll in Medicare at age 65 are often:

– Those who had retiree medical through a large employer and didn’t enroll in Medicare;
– Those who had individual coverage and didn’t enroll in Medicare;
– Those who had sole proprietor coverage of some sort and didn’t enroll in Medicare.
– Individuals who missed the opportunity to enroll in Medicare after a Special Enrollment Period are often:
– Those who elected COBRA after they stopped working;
– Those who received severance from an employer, received healthcare benefits but weren’t active employees and missed Medicare enrollment deadlines;
– Those who sold businesses and negotiated staying on the group plan as part of the sale and missed Medicare enrollment deadlines.

IF YOU ARE OVER 65 AND HAVE NOT SIGNED UP FOR MEDICARE, YOU MUST UNDERSTAND THE MEDICARE RULES ABOUT ENROLLMENT IN THE PROGRAM TO AVOID FUTURE PENATLIES.

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