Medicare is a maze, but it’s not always easy to backtrack if you reach a dead-end. A wrong turn can result in enrollment delays and lifetime penalties. The most common mistake we see is people missing their personal enrollment deadlines. Everyone’s Medicare enrollment timeline is a little different and it does not always correlate with turning age 65.
Some people defer Medicare Part B because they have group health insurance available through a large employer (more than 20 employees). Others think they can defer Medicare and take COBRA instead. The first option is usually okay, the second is not. This is just one example of a so-called Medicare trap that awaits those who are eligible. In other cases, we see people enroll in and pay for Medicare Part B when they may not need to.
Part B is the gatekeeper and there is almost always a right and a wrong time to enroll. And if you do nothing, the government can automatically enroll you at age 65 if you’re already taking Social Security payments. That might be a mistake if you have creditable large group health insurance available that you plan on keeping. It’s important to know when to start your Part B with the government.
Assuming you have navigated the above satisfactorily, then it’s time to think about your supplemental insurance. Once Part B starts, then you have a six month window to buy any Medicare supplement without medical underwriting and a three month window to buy a Part D drug plan. We see a lot of mistakes here.
Many people let these windows pass thinking they can buy a supplement any time they want – or later during the yearly Open Enrollment. That’s not the case. The so-called Open Enrollment in the fall each year does not apply to Medicare supplements. Enrolling late in a Part D plan incurs lifetime penalties.
Missing your window to purchase a Medicare supplement, Advantage or Part D drug plan can cause future ineligibility (due to medical underwriting) and late enrollment penalties from the government. Everyone’s timeline will be a little different, but in almost all cases, once Medicare Part B begins the clock is ticking to purchase supplemental insurance. There are usually no free passes once your personal enrollment window has expired.