Help Friends and Family Enroll in Medicare

Mistakes in enrolling for Medicare can be costly. If you fail to pay for Medicare Part B on time, you will wind up paying the late enrollment penalty (LEP)-for life. You can also experience a gap in health care coverage, meaning you’ll have to pay bills that Medicare otherwise would have taken care of. Understanding the details of Medicare enrollment can help prevent relatives from making such errors. There are three Medicare enrollment periods — here are some basics:

Late enrollment penalty

At all costs, you want to avoid paying the LEP. It’s assessed at 10% of the monthly premium for every full 12 months the beneficiary delayed his or her enrollment in Part B, and, once it’s levied, it lasts the remainder of a beneficiary’s life.

According to the Centers for Medicare & Medicaid Services, on average, beneficiaries subject to the penalty pay 31% more for their monthly premium, or $390.24 per year. If you live a long time, that can quickly add up. What’s more, the LEP increases along with a beneficiary’s Part B premium, and there is no cap on it.

Medicare enrollment periods

An eligible individual can only enroll in Medicare during one of three specified periods:

1. Initial Enrollment Period (IEP)
2. Special Enrollment Period (SEP)
3. General Enrollment Period (GEP)

The IEP is tied to the month in which a person turns age 65 and is first eligible for Medicare benefits. (Note that if he or she was born on the first of any month, his or her first eligible month is the prior month.) The IEP lasts for seven months. It begins the third month prior to the month in which a person turns age 65, includes his or her birth month, and ends the third month following the birth month. Unfortunately, if an individual is not collecting Social Security at the time he or she turns 65, no federal agency will inform him of his obligations or of the Medicare enrollment rules. Therefore, it’s up to him or her to decide whether he or she needs to enroll during his initial enrollment period.

The decision whether or not to use the IEP is where most mistakes are made. For example, someone may decide he doesn’t need the IEP because he’s participating in his ex-employer’s retiree health plan. When the retiree plan is terminated five years later, he finds out he can’t enroll in the SEP. He then must use the GEP, pay the LEP, and experience a coverage gap of several months.

So we just wanted to make everyone aware of these sometimes obscure rules, so that you or a family member can make the best decision for them.