Medicare Enrollment in 2020
If you’re getting ready to turn 65 this year, you should know the steps needed to enroll in Medicare. If you miss your designated period to enroll you will be able to do so later, but you will incur financial penalties as a result. Read on for everything you need to know so you’re prepared to enroll on time.
When To Enroll
Anyone 65 years or older and has begun collecting retirement benefits is eligible. This is commonly referred to as “aging into Medicare.” You may also enroll if you are younger than 65 and:
- Have received disability benefits for 24 months.
- Have end-stage renal disease (ESRD).
- Have Lou Gehrig’s disease (ALS).
Enrolling When 65
If you plan on “aging into” Medicare, your 65th birthday will be important.
You can enroll in Medicare during the month of your 65th birthday as well as three months before and after.
So, if you turn 65 in May, you have the option to enroll in during the months of February, March, April, May, June, July, and August. This time period is known as your Initial Enrollment Period.
If you miss your Initial Enrollment Period because you’re still working, you will qualify for a Special Enrollment Period (read below if you still plan on working). If special enrollment does not apply to you and you missed your Initial Enrollment Period, you may apply for Medicare from January 1 to March 31 but you will likely face a penalty. It’s important to note that you do not get automatically enrolled in Medicare. Just like any program, you have to sign up to start receiving benefits.
If you want to make changes to an existing Medicare plan, you can do that during Open Enrollment from October 15 to December 7.
Enrolling Later Than 65
If you are planning on working and continuing your employer-sponsored health insurance, you can wait to sign up for benefits until the month you quit working. When you sign up for retirement benefits, you will be enrolled in Part A in addition to Part B as long as you choose Part B on your retirement paperwork.
Enrolling Earlier Than 65
If you qualify to enroll in Medicare earlier than 65, you will fall under one of the three categories:
- Have received disability for 24 months. You are eligible to start receiving benefits during your 25th month on disability.
- Have end-stage renal disease (ESRD) and have been receiving dialysis for three months or have had a kidney transplant.
- Have been diagnosed with ALS. Those in this category are enrolled immediately with no waiting period.
You may enroll as soon as allowed by the above regulations.
What Medicare Plans To Choose
Now that you know when to enroll, the next step is knowing what plans to choose.
| PLAN |
COVERAGE |
PREMIUM |
| Part A |
Inpatient hospital coverage |
Might have premium |
| Part B |
Outpatient care
Doctor visits
Lab tests
Home health services
Medical equipment
|
Will have premium
Medicare pays 80%
You pay 20% of everything else
No cap or maximum
|
| Part C |
Inpatient hospital coverage
Outpatient care
Prescription drug coverage
Dental*
Vision*
Hearing*
Fitness*
|
Will have premium
|
| Part D |
Drug coverage |
% deductible varies |
* Not all Medicare Part C plans cover these items.
Medicare Part A
Medicare Part A covers expenses related to hospital visits. This part of Medicare is free for everyone who has worked 10 years and contributed Medicare taxes during that time or had a spouse that did so. If you or your spouse have not worked for 10 years while contributing Medicare tax, you will pay a monthly premium up to $458.
Medicare Part A is mandatory for all eligible enrollees into Medicare health insurance.
Medicare Part B
Medicare Part B is optional but highly recommended. This part of Medicare covers expenses related to doctor visits, lab tests, and other common medical needs. There is a monthly premium and a deductible associated with Part B expenses but will be much more cost-effective than paying everything out of pocket.
You should sign up for Part B when you sign up for Part A. Why? Because if you choose not to sign up for Part B, then switch your mind and sign up later on, you will incur a penalty for every year you waited. This penalty is lifelong, so it pays to sign up instead of delaying to save costs.
If you are eligible to enroll in Medicare in 2020, but you decide to wait to enroll in Part B, your Part B premium will increase by 10% every year you delay. The penalty is permanent, increasing your premium cost for as long as you have Medicare.
| |
2020 |
2021 |
2022 |
2023 |
2024 |
2025 |
| Late Fee |
0 |
10% |
+ 10% |
+ 10% |
+ 10% |
+ 10% |
| Part B Premium |
$100 |
$110 |
$120 |
$130 |
$140 |
$150 |
Medicare Part C
Part C is known as Medicare Advantage. This is a popular option for many people for several reasons.
- It combines A, B, and D into one plan.
- It’s less expensive than purchasing A, B, and D individually.
- It often includes extras such as dental or vision benefits.
In order to qualify for Part C, you must be signed up for Parts A and B. Medicare Advantage is purchased through private insurance companies so it pays to shop around for the best price and the best benefits. Part C can be purchased during your Initial Enrollment Period, Special Enrollment Period, or Open Enrollment Period.
Medicare Part D
Medicare Part D covers prescription drug costs. This is entirely optional but highly recommended, as the number of prescription medications will rise as you age. This part of the plan will come with a premium and deductibles vary. Similar to Part B, if you do not sign up for Part D when you sign up for Medicare initially, you will incur a penalty for each year you wait.
Supplemental Coverage
Supplemental coverage, or Medigap, is the final piece to the coverage puzzle you need to consider.
Medigap is an optional coverage which fills in the gaps not covered by Parts A and B including;
- Copayments
- Coinsurance
- Deductibles
Medigap plans are listed by letters of the alphabet and provide different levels of coverage. Each option will carry a different premium depending on how much is covered. Choosing a Medigap plan is in addition to Medicare Part A, B, C, and D.
Here is a quick breakdown of Medigap plan options.
| PLAN |
COVERAGE |
| Part B |
Basic benefits
Medicare Part B coinsurance
Medicare Part A deductible
Preventative Part B coinsurance
|
| Part D |
Basic Benefits
Medicare Part B coinsurance
Skilled nursing
Medicare Part A deductible
Foreign travel emergency
Preventative Part B coinsurance
|
| Part G |
Basic benefits
Medicare Part B coinsurance
Skilled nursing
Medicare Part A deductible
Foreign travel emergency
Preventative Part B coinsurance
100% Medicare Part B excess
|
| Part M |
Basic benefits
Medicare Part B coinsurance
Skilled nursing
50% Medicare Part A deductible
|
| Part N |
Basic benefits
Medicare Part B coinsurance with a copay
Skilled nursing
Medicare Part A deductible
Foreign travel emergency
Preventative Part B coinsurance
|
It’s important to note that enrollment for Medigap takes place during the Medigap Open Enrollment period. It varies by individual and begins the first day of the month you turn 65 and continues for six months beyond. So, if your birthday is in May, you have May, June, July, August, September, and October to sign up.
It’s crucial to sign up during your Medigap enrollment period. When you sign up during this six-month window, you are guaranteed acceptance into any plan you choose, even if you have pre-existing conditions.
You can sign up for Medigap after your six-month window, but insurance companies then have the option to ask you medical questions and may deny your application.
Medigap or Medicare Advantage?
Medigap can be chosen instead of Medicare Advantage if you prefer to purchase Medicare Part A, B, and D rather than C. Here is a look at how Medicare Advantage compares to Medigap.
| |
Medicare Advantage (Part C) |
Medigap |
| Doctors/Medical Facilities |
Must be within HMO/PPO Network |
Any doctor that takes Medicare |
| Expense |
Lower premium
Higher out-of-pocket costs
|
Higher premium
Lower out-of-pocket costs
|
| Location |
Localized to a specific region |
Coverage available in all 50 states + foreign travel |
Finalizing Enrollment in Medicare
When you enroll in Medicare, you’ll want to have all your information at the ready. So, what do you need to know? You need to know which plans you will choose and, if applicable, which insurance companies you will purchase them through. If thinking through your budget, it’s also wise to know how much each piece will cost you as you go along.
| Part/Plan |
Enrolling – Yes |
Enrolling – No |
Insurance Provider |
Cost |
| Medicare Part A |
X |
|
Medicare |
$0* |
| Medicare Part B |
X |
|
Medicare |
$144.60** |
| Medicare Part C |
X |
|
Varies |
Varies |
| Medicare Part D |
|
X |
|
|
| Medigap |
|
X |
|
|
* If you worked 10 years and contributed Medicare taxes during that time, your Part A cost will be free. Otherwise, there will be a premium cost associated with Part A.
**This is the standard cost associated with Part B. Your individual cost may vary.
By having this information at the ready, you’ll be able to work through your application in a timely manner without having to stop to conduct research for prices or plan options.
Time to Enroll
Enrolling in Medicare is an important step in your life. Not only are you transitioning from private healthcare to government-funded options, but you’re looking ahead and preparing for the rest of your life. Having the correct amount of healthcare needed is essential to make sure you are covered for any medical issue that may arise. If you will be ready to enroll soon, don’t put it off.
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