A Medicare Mulligan
Back in October, I wrote in this space about Medicare "Open Enrollment", a period during which in general allows those covered by Medicare to shop around a bit to see if their current plan still meets there needs or if a change is desired.
Another facet of Medicare coverage is the "General Enrollment Period" (or GEP), which I like to call the Medicare Mulligan, because it gives some people another shot (pun intended) at enrolling in Medicare or making a change. Given the time of the year in which we find ourselves (you'll understand this comment in a moment), it seems an appropriate time to address what this facet of the Medicare system is about.
In general, during the GEP, people who missed signing up for Medicare when they first were eligible get a second chance, the mulligan, to enroll. The GEP runs from January 1 through March 31 of each year, so now is the time to take advantage of it if needed. Note, late enrollment penalties still apply, but the GEP gives you a chance to get them stopped.
The GEP is also the period of time for a Medicare Advantage mulligan, when those enrolled in a Medicare Advantage plan can switch to another Medicare Advantage plan OR go back to original Medicare.
So let's backtrack a bit and talk about why the GEP is even necessary in the first place.
The majority of people will enroll in Medicare during the "initial enrollment period" (the IEP), which is tied to your 65th birthday. The IEP begins three months before you turn age 65, includes you birth month, and then ends three months after you turn 65, a period seven months total.
Failure to enroll during the IEP can result in late enrollment penalties, not to mention gaps in health insurance coverage. Note, however, that if you work beyond age 65 and continue to have group health insurance coverage through your current employer (or spouse's current employer) you can delay enrolling in Medicare penalty-free until eight months after such coverage ends. This is known as a special enrollment period (or SEP). Lots of "periods" to remember, I know.
Here's where the mulligan kicks in. If you miss enrolling during your IEP, or for that matter, during your SEP if that applies to you, you will be able to enroll during the next GEP that occurs during the first three months of the year as discussed above.
Even still, your coverage won't begin until the following July 1, and in the meantime, without coverage, you will have to foot the bill for all of your health care expenses incurred while waiting on coverage to kick in. Also, you will incur a 10% late enrollment penalty for every year you were eligible to enroll in Medicare Part B but didn't.
You are also eligible to enroll in an optional Medicare Part D prescription drug plan when you turn age 65 during the same seven-month IEP as regular Medicare. However, there is much shorter SEP for people to enroll in a Part D plan after their group health insurance coverage ends.
If over age 65, you must choose a Medicare Part D prescription drug plan within only 63 days of losing your group health insurance or you face delayed enrollment penalties if you decide to sign up after the deadline. The penalty is 1% for every month you were eligible to enroll in a Part D but didn't do so, for a total delayed enrollment penalty of 12% per year for the rest of your life. Excuse me?
As you can see, all of the above are reasons why it's important not to ignore your IEP. Even so, if you do miss it, you aren't just out of luck with no coverage forever. The GEP at least gives another chance to limit the damage and better your health coverage score!
It's worth mentioning here that Medicare Advantage plan members who are not happy with a current plan can switch to a different Advantage plan any time during the GEP each year. They can also switch from an Advantage plan to original Medicare during the same time period. If this is you and you do switch back to original Medicare, experts recommend that you buy a supplemental Medigap policy and enroll in a Medicare D plan.
