Retiring Past 65? Learn About the Medicare SEP

There are many enrollment periods to keep track of within Medicare. If you are are retiring past 65, you should know about the Medicare Special Enrollment Periods (SEP)

Enrollment Windows

Let’s first discuss the “regular enrollment periods”. There are many enrollment periods for Medicare. First there is your IEP. 

IEP

Your IEP is the initial enrollment period. As the name suggests this is when you can first sign up for Medicare. It is the seven month period surrounding your 65th birthday. 3 months before, the month of and 3 months thereafter.

If you are receiving social security of railroad retirement benefits, you will automatically be enrolled in Original Medicare (Part A and Part B). More on that in just a moment.

If you are not automatically enrolled in Medicare, you will need to contact social security to do so.

During this time, you may also sign up for Medicare Advantage (Part C) or Part D which are prescription drug plans. 

Medicare Advantage plans are an alternative to Original Medicare. They must offer at least the same benefits, but may offer additional benefits such as dental, vision, hearing and prescription drugs. You will have to work within a network. Because they are an alternative to Original Medicare you cannot have Original Medicare and Medicare Advantage.

Part D plans are strictly prescription drug plans. Original Medicare does not cover prescriptions with some very limited exceptions. So if you take prescriptions on a regular basis, you will want a Part D plan. Many Advantage plans offer prescription drug coverage, so if yours does, you will not need a Part D plan. However, if you stay with Original Medicare, make sure to sign up for Part D during this time.

If you are interested in a Medigap plan, the best time to enroll is the six months after you turn 65 and enroll in Part B. Again more on that in a moment. During this time, you will not be subject to any medical underwriting. After this time you may be subject to medical underwriting which means you could be charged more or denied based on your health. This is the best opportunity to have the most choices at the lowest price. 

Yearly Enrollment

There are a few other yearly enrollment periods that have various acronyms. These are where people get very confused. Let’s start with Original Medicare.

General Enrollment

If you missed your IEP and are ineligible for a SEP then you can enroll in Original Medicare during the general enrollment period. This is Jan 1-March 31. When you enroll during the GEP, coverage begins the first of the month after you enroll, and you may have to pay a Part B late enrollment penalty.

If you don’t enroll in Original Medicare during your IEP and are ineligible for a SEP, you may be subject to a late penalty. If you go without Part B for at least a year after you are eligible you would have to pay 10% of the base monthly premium on top of your regular monthly premium. This is not a one time fee but rather tacked onto your Part B premium permanently. Again, contact social security for assistance.

AEP

Then there is the annual enrollment period. This is for Medicare Advantage and Part D. This is every year from Oct. 15-Dec. 7. This is the time to join, switch or drop your Medicare Advantage or Part D plan. Logon to Medicare.gov to view available plans or work with a broker to ensure your needs will be met.

MAOEP

Additionally, there is the MAOEP. This is also during Jan. 1-March 31. During this time you may drop your MA plan to rejoin Original Medicare. If you drop your MA plan and lose prescription drugs, you may sign up for a Part D plan during this time.You may also switch your current MA plan to a different MA plan if you so choose.  Basically you can drop or switch, you just cannot sign up if you currently have Original medicare instead of MA. 

SEP

Then there are SEPs. You will qualify if you lose your coverage for some reason. 

First this is very important for Part B. If you continue to work past the age of 65 and receive coverage through your employer, you will likely want to defer Part B. Make sure to follow the instructions on the back of the card and send it back. If you keep the card, you keep Part B and you will be charged for it.

Why do this? Part B has a monthly premium, likely more than what you are paying through your group coverage. And that premium is based on your income, so if you make a higher income, your Part B premium may be higher. If you have insurance through your employer, why pay more to be over insured.

Also, remember your 6 month window to enroll in a supplement plan with no medical underwriting does not begin until after you enroll in Part B. So, if you defer your Part B, you also defer this medigap enrollment period. Yes, you can enroll year round, but you don’t want to run the risk of being rejected or charged more.

So, when you retire and your group coverage ends, at this point, you would be eleibgle for a SEP and reenroll in Part B. Your 6 month window for Medigap would begin as well.

If you retire and lose coverage you would also have a SEP for MA and Part D.