Understanding the Different Medicare Plans, When to Enroll, and How

Healthcare is important, especially as we get older. If you're approaching 65, you're eligible to enroll in Medicare.

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Medicare provides healthcare for retired folks 65 and older and those with certain disabilities. However, many seniors don't know what kind of coverage they have or even if they have coverage at all. While 34% of people aren't familiar with Medicare, 64% don't know which part of Medicare to enroll in.

Let's help you navigate Medicare so you can get covered.

What Is Medicare?

Medicare is a federal program in the United States that provides health insurance for people 65 and older. It's a safety net that protects you from high medical bills. You might also be eligible if you have end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS/Lou Gehrig's disease).

In 2022, 13.8 million people re-enrolled in Medicare or signed up for the first time.

Different Medicare Parts, How They Work, And What They Do

Medicare is divided into four parts:

• Medicare Part A (Hospital Insurance): This covers inpatient hospital care, some skilled nursing care, hospice care, and home health care

• Medicare Part B (Medical Insurance): This covers outpatient care, doctor visits, medical equipment, and many preventive care services

• Medicare Part C (Medicare Advantage): This Medicare-approved plan is administered through private companies. It covers all services listed in Part A, Part B, and usually Part D

• Medicare Part D (Prescription Drug Coverage): This covers the cost of prescription drugs

Medicare Parts A & B comprise what's known as "Original Medicare".

Additional coverage

There are two types of additional coverage: Medigap Plans and Medicare Advantage Plans.

Medigap Plans (Medicare Supplements)

After you enroll in Medicare Parts A and B (Original Medicare), you may (and likely should) add Part D. Medigap Plans, such as Plan G, work on top of Original Medicare to give you more coverage and doctor flexibility.

With Medigap Plans, you can visit any doctor who accepts Medicare in the United States.

Medicare Advantage

Medicare Advantage is also known as Medicare Part C. It is managed by private insurance companies (HMOs or PPOs), but follows the rules set by Medicare. You're technically still enrolled in "Original Medicare" with Medicare Advantage.

Enrollment in the Original Medicare Part A and B is required to enroll in Medicare Advantage.

Medicare Advantage combines the benefits of Medicare Part A, Part B and, (usually), Part D. You still have to pay the Part B premium just as in the Original Medicare plan, but there are no other additional costs.

Most Medicare Advantage plans have Part D, so you don't need to purchase it separately. Medicare Advantage also covers extra benefits like vision, dental, and hearing services, which are not covered in Original Medicare.

The downside of Medicare Advantage is that you can use the benefits only within a network of doctors. Your choice of care is limited.

You can choose any Medicare plan you'd like based on your budget, health conditions, medications, doctors, and personal preferences.

‎We can help you work through the decision-making process.

When Do I Sign-up for Medicare?

There are different factors to consider regarding when you should sign up for Medicare:

What If I'm Collecting Retirement Benefits?

If you are collecting social security retirement benefits when you turn 65, you will automatically be enrolled in Medicare Parts A and B. You do have the option to opt-out of Part B in certain situations.

If you live outside the fifty states or Washington D.C. (e.g. Puerto Rico), you will automatically be enrolled in Medicare Part A, but you must enroll in Part B manually.

What If I'm Receiving Disability Benefits?

If you're not yet 65 and have received disability benefits for 24 months, you will automatically be enrolled in Medicare Part A and Part B.

However, if you have end-stage renal disease (ESRD) and have undergone a kidney transplant or need continuous dialysis, you can immediately enroll for Medicare with no waiting period.

If you have amyotrophic lateral sclerosis (ALS/Lou Gehrig’s disease), you will be automatically enrolled in Original Medicare, and you get its benefits at the same time you receive your disability benefits.

What If I Don't Have Retirement Benefits?

You can enroll in Medicare during your Initial Enrollment Period (IEP). This is a 7-month window that spans the three months before the month of your 65th birthday and extends to the three months after the month you turn 65.

During the Initial Enrollment Period, you can enroll in:

• A Medicare Supplement Insurance Plan

• A Medicare Prescription Drug Plan

• A Medicare Advantage Plan

Although you can enroll in any of the plans mentioned above, you must enroll in Original Medicare Parts A and B first.

If you enroll in Medicare before you turn 65, your Medicare insurance starts from the first date of the month of your birthday. However, if your birthday is on the 1st day of a month, your insurance benefits begin on the 1st day of the previous month.

It's advisable to enroll in Medicare during your IEP, since late enrollments may lead to hefty premiums—or sometimes even penalties.

‎If you missed enrolling in Medicare during your IEP, you could enroll during the General Enrollment Period (GEP). The GEP extends from January 1st through March 31st every year. You can enroll in Medicare Parts A and B during this time, but you might have to pay a late enrollment fee.

When Can I Sign Up For a Medigap?

Medicare Supplemental Insurance, or "Medigap," fills the gaps in Parts A and B. It gives you added coverage to help meet your out-of-pocket expenses. You must be enrolled in Medicare Part B to get Medigap coverage. You can enroll during your IEP, which is the 6-month period that starts from the first day of the month you turn 65 (if you have Part B).

The main advantage of enrolling during the IEP is that insurance companies cannot reject your application because of your medical history, pre-existing conditions, or disabilities. There is a chance of rejection from insurance companies if you enroll outside this period. We always recommend folks enroll during their IEP.

Other Medicare Enrollment Periods

The Medicare Special Enrollment Period

If you want to make changes to your plan due to an unforeseeable event in your life, you can use the Special Enrollment Period (SEP). This unforeseeable event could be job loss, end of group insurance coverage, or some other major life event.

The Special Enrollment Period is an 8-month period that begins either from the date your employment or group insurance ends, whichever comes first.

Suppose you chose not to enroll in Part B during your IEP, since you were already covered by group medical insurance. If you later decide you want to enroll in Part B, you may enroll at any time during the Special Enrollment Period.

The SEP is not applicable if you are eligible for Medicare due to end-stage renal disease (ESRD).

Neither COBRA nor retiree health coverage qualifies for SEP because they are not considered current employee coverage. You may want to enroll during your IEP if either of these situations applies to you.

Annual Enrollment Period

Every year from October 15th through December 7th, Medicare beneficiaries get the chance to change their Medicare plans, switch plans, or unenroll from a plan.

You can change your Medicare plans in the following ways:

• Shift from a Medicare Supplement Plan to a Medicare Advantage Plan

• Shift from a Medicare Advantage Plan back to Original Medicare

• Shift from one Medicare Advantage Plan to another Medicare Advantage Plan

• Shift from one Prescription Drug Plan to another

• Enroll in Medicare Part D

• Unenroll from a Prescription Drug Plan

Open Enrollment Period

You can change your Medicare Advantage Plan during the Medicare Advantage Open Enrollment Period, from January 1st through March 31st every year. You can use the Medicare Advantage Open Enrollment Period to do the following:

• Shift from one Medicare Advantage Plan to another.

• Unenroll from a Medicare Advantage Plan and enroll in Original Medicare (with or without Part D).

Initial Coverage Election Period

If you are new to Medicare, you can enroll in a Medicare Advantage Plan during your Initial Coverage Election Period (ICEP). This enrollment coincides with your IEP.

Your ICEP is also a 7-month period that begins three months before you are eligible for Medicare benefits and continues until you enroll in Part A and Part B — or until your last eligibility date for the IEP.

For example, if you will be 65 on June 12th, and your Medicare coverage starts from June 1st, your ICEP to enroll for the Medicare Advantage Plan is from March 1st through September 30th. However, if you have delayed your Part B, your ICEP will end on the date you enroll in Part B.

Medicare Enrollment Periods

What's Medicare Prescription Drug Coverage, and When Do I Sign Up?

Medicare prescription drug coverage is voluntary. It helps cover your prescription drug costs. Even though you might not be using many prescription drugs right now, coverage can give you an advantage down the road.

You can get Medicare prescription drug coverage by enrolling in the Medicare Prescription Drug Plan or the Medicare Advantage Plan (with drug coverage) during the following periods:

• The Initial Enrollment Period (IEP)

• The Annual Enrollment Period

• The Open Enrollment Period

• Initial Coverage Election Period

You may be subject to late enrollment penalties if you decide to enroll later.

How Do I Sign-up for Medicare?

Here are a few ways to enroll in Medicare.

• You can apply online at the Social Security website.

• You can call your local Social Security office or their toll-free Number at 1-800-772-1213, Monday-Friday, 8:00 a.m. to 7:00 p.m.

• You can visit your Social Security office in person.

• You can call Fair Square Medicare at 1-888-376-2028. We can walk you through the whole process, step by step.

If you have trouble enrolling online, we created this video to help you apply for Medicare.

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Stay Up to Date on Medicare!

Join the Fair Square Medicare Newsletter to stay informed on cost savings, changes to Medicare, and other valuable healthcare information.

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