A Complete Medicare Eligibility and Enrollment Guide
Learn when and how to apply for Medicare, Medicare Advantage plans, Medicare Supplement (Medigap) plans and Medicare prescription drug coverage.
From its start in 1966, Medicare has been a vital program for providing health insurance to eligible U.S. seniors aged 65 and over. In 1971, the program was expanded to also cover some adults under age 65 with a qualifying disability.
In 2020, over 60 million American citizens will get some or all of their health services under the umbrella Medicare provides. Understanding how this program works, and especially how to qualify for its various benefits, is of vital importance to every senior in the United States who might be eligible.
Medicare is a health insurance program that’s available in basically two forms: Original Medicare and Medicare Advantage. Original Medicare is the basic program that covers beneficiaries with three major components, known as Part A and Part B.
- Medicare Part A pays many of the costs of inpatient care in a hospital or other short-term residential treatment center.
- Part B pays for most outpatient services, from clinic visits and ambulance rides to medical supplies and diagnostic services.
Another aspect of Medicare coverage is Part D prescription drug coverage, also known as Medicare Prescription Drug Plans (PDP). Part D plans are sold by private insurance companies and help pay some of the cost of prescription medication.
Part D prescription drug coverage can be purchased as a standalone PDP or as part of a Medicare Advantage plan.
Medicare Advantage is sometimes called Medicare Part C. Unlike Original Medicare, Part C plans are issued by private insurance companies in each state.
All authorized Part C plans must pay for the same benefits as Parts A and B, and many Medicare Advantage plans include a few extra benefits Original Medicare doesn’t cover, such as vision and dental care.
Beneficiaries of Original Medicare often buy into a supplemental plan to plug the gaps left by Medicare coverage. These are called Medicare Supplement Insurance (Medigap) plans.
There are 10 standardized Medigap plans available in most states, and they are not available to beneficiaries who have opted into a Medicare Advantage plan.
Medicare Part A and Part B Eligibility and Enrollment
Part A is the Original Medicare component beneficiaries may be most familiar with. Part A benefits include paying for daily hospital expenses and treatments administered during acute inpatient stays.
Most eligible beneficiaries are automatically enrolled in Medicare Part A when they reach age 65. Because more than 90% of seniors are eligible for Part A at no monthly cost, this coverage is automatically extended to all seniors who meet the citizenship and residency requirements.
In order to qualify for zero-premium Part A coverage, seniors must have accrued at least 40 work credits during their working lives. Medicare does not make this difficult to do. Adults who work and pay into the Medicare system earn 1 credit for every 3 months they are employed, up to 4 credits a year. After 10 years, enough credits have been accrued to qualify for premium-free Part A upon retirement.
Seniors who have not earned sufficient credits through their work history may qualify if their spouse has done so. Seniors who have started receiving Social Security benefits by their 65th birthday are also automatically enrolled in Part A.
Some adults under age 65 may also be automatically enrolled in Medicare Part A. As part of Medicare’s 1971 expansion, U.S. citizens with end-stage kidney disease, Amyotrophic Lateral Sclerosis (ALS), also called Lou Gehrig's disease, and some qualifying disabilities receive Part A benefits at no monthly cost and without needing to sign up for a plan.
Exceptions to Automatic Enrollment
Some seniors are not automatically enrolled in Medicare Part A. It is relatively rare, but some otherwise eligible seniors arrive at age 65 without enough work credits of their own or from a spouse, no qualifying disabilities and no Social Security benefits to trigger enrollment.
Seniors in this position can sign up for Part A coverage on their own by calling the Social Security Administration, visiting a local office or filling out an application online at the SSA's web portal.
Applicants who have not met any of the Part A eligibility thresholds may be asked to pay a monthly premium for coverage that in 2020 is capped at $458 a month, though partial credit for some work credits can reduce that amount somewhat.
Medicare Part B Enrollment
Most seniors who enroll in Part A just before their 65th birthday also enroll in Part B, the outpatient coverage component of Original Medicare.
Unlike Part A, enrollment in Part B is not automatic, since almost all beneficiaries have to pay a monthly premium for coverage. The monthly premium for Part B varies somewhat with income and ability to pay.
In 2020, the standard monthly premium for Part B is $144.20.
The Social Security Administration reviews tax returns from two years prior to establish the exact monthly premium that must be paid. For beneficiaries who earned over $87,000 but under $109,000 in 2018, their Part B monthly premium is $202.40 in 2020.
The maximum monthly premium, paid only by beneficiaries who report earnings above $500,000 a year, is $491.60.
Seniors have the option not to enroll in Part B when they first become eligible to do so. Seniors who miss their initial enrollment period, but who enroll in Part B later on, may have to pay a penalty rate that lasts as long as they have coverage. This can get very expensive and result in a gap in health insurance coverage.
Most beneficiaries have several time periods in which they can sign up for Part B:
- Their Initial Enrollment Period (IEP)
- The General Enrollment Period
- The Medicare Annual Enrollment Period (AEP, also called the Open Enrollment Period for Medicare Advantage and Prescription Drug Plans)
- Special Enrollment Periods (SEP)
Initial Enrollment Period
A beneficiary’s Initial Enrollment Period begins at the same time their eligibility for Part A begins, and it lasts as long as the initial enrollment window for Part A does.
This is a 7-month window that begins on the first day of the month, three months prior to a beneficiary’s 65th birthday, and ends on the last day of the month, three months afterward.
Thus, a senior who turns 65 on July 12, 2020, would have an Initial Enrollment Period that starts on April 1, 2020, and ends on October 31, 2020.
Seniors can sign up for Parts A and B anywhere in that window, but waiting too long may cause a delay in coverage and create a temporary gap in benefits.
General Enrollment Period
Each year, seniors who either missed their initial enrollment and who didn’t otherwise qualify for a Special Enrollment Period (see below) can sign up for Part A and/or Part B during the Medicare General Enrollment Period.
The General Enrollment Period opens each year on January 1 and runs until March 31.
Beneficiaries may have to pay higher premiums for Part A or Part B, if they fall into the requirements of having to pay late enrollment penalties.
Fall Open Enrollment Period for Medicare Advantage and Prescription Drug Plans
If you choose not to sign up for a Medicare Advantage plan or stand-alone Medicare prescription drug coverage during your Initial Enrollment Period, you can also enroll in a Medicare Advantage plan during the annual Fall Medicare Annual Enrollment Period (AEP), which runs from October 15 to December 7 every year.
AEP is also called the Medicare Annual Election Period and the Open Enrollment Period for Medicare Advantage and Medicare prescription drug coverage.
During the Fall Medicare Open Enrollment Period for Medicare Advantage and Medicare prescription drug coverage, you can:
Enroll in, make changes to or disenroll from a Medicare Advantage plan (Medicare Part C)
Enroll in, make changes to or disenroll from a Medicare Prescription Drug plan (Medicare Part D)
Plan changes you make during the 2020 Medicare Fall Annual Enrollment Period go into effect January 2021.
Special Enrollment Periods (SEPs)
Special enrollment periods are personal windows in which beneficiaries can sign up for Medicare coverage, provided they were unable to do so during the initial sign-up period and there are extenuating circumstances justifying the delay.
You may be eligible for a 3-month special enrollment window at any time during the year if you:
- Have recently lost coverage because of a change in your own employment or that of a spouse
- Have lost coverage due to your previous carrier declaring bankruptcy, canceling the group coverage you were enrolled in, or you have been the victim of fraud, or any other similar set of circumstances outside of your control
- Have recently been released from a federal institution, such as a prison or other involuntary commitment
- Are returning from overseas and did not have the opportunity to enroll in Medicare around the time of your 65th birthday
Many different circumstances can trigger a special enrollment period. Ask a Medicare representative over the phone about your own situation to determine if you qualify.
Medicare Advantage (Part C) Enrollment
Medicare Advantage is an alternate way many seniors have of getting their Medicare benefits. Often called Part C, Medicare Advantage plans are issued by private insurance companies with geographic availability that varies by state.
Because these plans are crafted by private-sector insurers, the details of coverage vary widely from one area to another. Certain coverage minimums, however, are mandated by law.
All authorized Part C plans must provide the same basic coverage seniors get from Original Medicare Parts A and B.
In addition to the inpatient and outpatient care these options pay for, many Medicare Advantage plans also provide vision, dental and other benefits that are not included in Original Medicare.
Most Part C plans also include some prescription drug coverage. These plans are often called Medicare Advantage Prescription Drug plans (MA-PD).
Part C Eligibility
Seniors become eligible for Medicare Advantage at the same time they become eligible for Original Medicare.
Just as with Original Medicare, seniors' Initial Enrollment Period for enrolling in a Medicare Advantage plan opens on the first day of the third month prior to the beneficiary’s 65th birthday and closes on the last day of the third month after.
One difference between Medicare Advantage and Original Medicare enrollment is that Part C participants have up to 12 months to drop their Medicare Advantage coverage and go back to Original Medicare Parts A and/or B without incurring a penalty rate.
All of the same citizenship requirements apply to Medicare Advantage that also apply to Original Medicare, though the availability of specific plans is limited by state. In large states, access to small Part C group plans may be limited to just one part of the state.
Medicare Advantage plans can be researched on each state’s health insurance exchange website, or by using the Medicare.gov plan finder tool (Plan Compare).
Most seniors can also apply for a Medicare Advantage plan by calling the company offering the plan.
Part C Enrollment
Medicare Advantage plans also offer annual enrollment periods and special enrollment opportunities.
If you enrolled in Part B for the first time during the General Enrollment Period listed above (Jan. 1–March 31), you may be able to enroll in a Medicare Advantage plan between April 1 and June 30.
During this time, Original Medicare beneficiaries have the option to drop their current coverage and switch to a Part C plan.
You may also be able to switch from Original Medicare to a Medicare Advantage plan, or drop your current Medicare Advantage plan and switch to another Medicare Advantage plan, during the Fall Medicare Open Enrollment Period (Oct. 15–Dec. 7) or during a Special Enrollment Period, as outlined above.
If you already have a Medicare Advantage plan, you switch to another Medicare Advantage plan or disenroll from your plan and return to Original Medicare during the Medicare Advantage Open Enrollment Period, which lasts each year from January 1 to March 31. During this enrollment period, however, you cannot switch from Original Medicare to a Medicare Advantage plan.
If you leave a Medicare Advantage plan during this time and return to Original Medicare, you can also enroll in a Part D prescription drug plan.
Medicare Part D Coverage
Medicare Part D is the prescription drug benefit that went into effect in 2006. This benefit pays much of the costs for several classes of prescriptions that beneficiaries can pick up at the pharmacy.
Drugs covered by Part D are those controlled by prescription, which are not administered in the hospital or at an outpatient medical office.
Coverage costs and limitations can be complicated, as can the list of covered medications. Speaking with a plan representative can help seniors plan for continuing coverage of needed prescriptions during transitional times.
Part D Enrollment
For most Medicare beneficiaries, there are two main ways to enroll in a Part D prescription drug plan:
- Original Medicare
Seniors can opt into Part D coverage at the same time they enroll in their other Original Medicare benefit programs.
Part D is offered to these beneficiaries as an optional additional plan that charges its own premiums and carries its own co-pay and share of cost requirements.
Plan premiums vary by state and by policy, though an additional cost is applied to monthly plan premiums for seniors who earn more than $87,000 a year.
Deductibles also vary, with some Part D plans offering $0 costs at the point of sale, while other plans carry up to the Part D maximum for annual deductibles, which in 2020 is $435.
- Medicare Advantage
Many Medicare Advantage plans incorporate Part D prescription drug benefits. As with standalone Part D plans (PDPs), Part C drug benefits vary greatly between plans, and costs are difficult to compare from one area to another.
The difficulty in comparing privately issued drug plans is compounded by the significant variation in drug classes covered and deductibles charged.
Always speak with a plan representative before committing to a Medicare Advantage plan with a prescription drug component.
Medicare Part D Eligibility
Seniors can enroll in a Part D plan at the same time they enroll in their other Original Medicare benefits, during the initial 7-month window bracketing their 65th birthday.
The Social Security Administration strongly advises seniors approaching eligibility to sign up for a Part D plan as early in that window as possible, as there is a 3-month delay that comes with transferring benefits onto a Part D plan.
For seniors who need daily medication, any delay can create a dangerous gap in coverage. If a lapse in coverage is unavoidable, seniors signing up for Part D are encouraged to speak to their doctor or pharmacist and arrange for an extra supply of prescription medications to be issued to ensure a constant supply during the delay.
In addition to the initial sign-up period, beneficiaries may be able to enroll in a Part D plan during the Fall Open Enrollment (Annual Enrollment Period, AEP, as outlined above).
AEP begins on October 15 of each year and ends on December 7. Changes can be made at any time during this window, including first-ever enrollment in a Part D plan or switching from one Part D plan to another. Any changes made to Part D coverage during this window take effect on the following January 1.
Prescription components attached to a Medicare Advantage plan have the same open, annual and special enrollment periods as the rest of the Part C plan they are connected with.
Always speak with a plan representative prior to making changes to a Part C coverage plan, especially when adding a Part D optional plan.
Prescription Tiers and Total Coverage
Part D can be a great help for beneficiaries who have to manage expensive prescription drug costs. It does not, however, pay 100% of all prescription costs.
Rather, most Part D plans split up the medications they cover into four tiers. Different coverage levels are available for each of the tiers, and tier-eligible drugs vary between plans.
The basic tiers are:
- Tier 1
Tier 1 drugs are usually low-cost generics. Most drugs in this category have at least some coverage through a Part D plan, and co-payments are at their lowest.
- Tier 2
Tier 2 drugs come with a moderate co-payment. These are preferred drugs, which are often brand name and still under patent. The drugs’ preferred status usually comes with bulk discounts for Medicare to buy them, which translates into some cost savings for beneficiaries at the point of sale.
- Tier 3
Tier 3 prescriptions are all brand name non-preferred drugs. These tend to be the most expensive, and they almost always come with high co-payments, either because they are new to the market or they are in low enough demand that bulk sales are not possible.
- Tier 4
Also called specialty tier, Tier 4 drugs include experimental and off-label medications that usually carry very high co-payments.
Seniors who are having trouble paying their Part D premiums, deductibles and co-payment costs may be eligible for assistance through a Medicare program called Extra Help.
Extra Help is open to seniors who meet income and asset limitations set by federal law and are usually similar to the income thresholds for Medicaid coverage.
Speak to a Medicare or Medicare Advantage worker about Extra Help to see if you qualify.
Medicare Supplement Insurance (Medigap) Eligibility and Enrollment
Many Original Medicare beneficiaries find a gap in their benefits due to the deductibles, coinsurance, copayments and other costs that Original Medicare doesn’t cover.
These gaps and costs can be an expensive shortfall to manage for seniors on a fixed income. That’s why many beneficiaries opt into a supplemental insurance policy for their Medicare benefits.
These plans, collectively known as Medicare Supplement Insurance (also called Medigap), are provided by private insurance companies and are tailored to plug some of the out-of-pocket costs gaps that Original Medicare doesn’t cover.
Guaranteed Issue Rights for Medigap
Because Medigap plans are designed for seniors enrolled in Original Medicare, they are subject to heavy regulation meant to protect beneficiaries from unexpected difficulties. One rule all Medigap providers have to follow concerns guaranteed issuance of a policy.
All 50 states require Medigap providers to accept qualified applicants without regard to pre-existing conditions during times when they have a guaranteed issue right. No applicant can be refused coverage because of a negative health history or current health condition if they apply when they have guaranteed issue rights.
Guaranteed issue rights can be granted for a number of reasons, such as losing Medigap coverage through no fault of your own, moving to a new area that isn’t serviced by your plan and during your Medigap Open Enrollment Period.
If you apply for a Medicare Supplement plan during a time when you don’t have a guaranteed issue right, a Medicare Supplement Insurance company can ask you to undergo medical underwriting as part of the application process. They can charge you more for your plan or deny you coverage altogether based on your health.
Medigap Open Enrollment Period
Your Medigap Open Enrollment Period begins on the first day of the month in which you turn 65, and it runs for 6 months. You must have enrolled in an Original Medicare Part B plan in order to be eligible for Medigap coverage.
As mentioned above, you can apply for a Medigap plan any time, but for most beneficiaries there is no guarantee of coverage after their Medigap Open Enrollment Period closes.
In some states, seniors can buy a Medigap SELECT policy, which operates in much the same way as a traditional Medigap plan, but with a 12-month grace period for making changes to coverage with no penalty.
Medigap Plan Changes in 2020
Medigap plans come in a variety of configurations. In most states, the 10 standardized Medigap plans that are available are designated with letters (Plans A, B, C, D, F, G, K, L, M and N). These are not to be confused with Medicare Parts A through D.
Two popular Medigap plans, C and F, offer full coverage of Part B outpatient deductibles. Because of a change to federal law, neither of these plans is now available to new Medicare beneficiaries who first became eligible for Medicare after January 1, 2020.
If you already had Plan C or Plan F before Jan. 1, 2020, you can keep your plan. If you were eligible for Medicare before that date, you can still buy either plan if they are available where you live.
Likewise, Medigap is not compatible with a Medicare Advantage plan, and enrolling in a gap plan could result in automatic disenrollment from your Part C coverage.
How to Compare Medicare Plans
Medicare can be complicated, but choosing the right coverage for your needs can be made easier by working with a licensed insurance agent or by contacting Medicare. You can also reach out to your local State Health Insurance Assistance Program (SHIP).
All of these Medicare coverage options come with their own open enrollment periods, which can be somewhat confusing to keep track of.
Always speak with a Medicare specialist, or call 1-800-MEDICARE to talk about your options with a benefits expert before making a firm decision about your coverage options for Medicare.