What is Medicare’s General Enrollment Period (GEP)?
Medicare’s General Enrollment Period is the default method of enrolling in Medicare Part B for those who did not enroll during their Initial Enrollment Period (IEP) which is around one’s 65th birthday or during a Special Enrollment Period (SEP) for those who had active group coverage at or beyond age 65.
Why is Medicare Part B so Important?
Medicare Part B covers all physician services, most outpatient services and most drugs which are infused into the body. It is critically important coverage for everyone at age 65 or over unless they are on active group coverage.
When is the GEP?
Medicare’s GEP is the first quarter of every year for an effective date the following July. As a result, if you miss the March 31st enrollment deadline in a given year, you will not be eligible for Medicare Part B until July 1st of the FOLLOWING year.
How do I Enroll in Medicare Part B during Medicare’s General Enrollment Period?
According to the medicare.gov website, you enroll by downloading and completing form CMS 40B and submitting the completed form to your local Social Security office or contacting your local Social Security office via phone or calling the national number, 1-800-772-1213. You have to be on Part A to enroll in Part B. And if you have benefits through the Railroad Retirement Board, you contact them rather than Social Security.
Be Aware that the GEP is Designed to be Punitive
Most who enroll in Medicare Part B during the GEP will have a gap in coverage and pay Part B premium penalties for life. In this regard, Medicare Part B is completely different than Medicare Part A which is considered an earned benefit to which workers and their spouses are entitled. Although everyone except the lowest income Americans pays a premium for Medicare Part B, it is largely funded from general revenues (our tax dollars) and if you don’t follow the strict rules for enrolling, you will likely be subject to a gap in coverage and lifetime premium penalties.
How do the Penalties Work?
In addition to the base monthly premium which is $170.10 in 2022, and any income adjusted amounts you may owe, 10% of the base Medicare Part B premium is assessed for every 12-month period you could have been enrolled in Part B and were not enrolled. For most people that penalty calculation will begin with their 66th birthday because they were first eligible for Part B at age 65. For penalty calculation purposes, any period you had individual coverage, active group coverage or were on COBRA (a temporary extension of group coverage) is irrelevant.
Why is this so Punitive?
The program was structured so that people were forced to contribute to premiums before they were sick which is how insurance is supposed to work, that is, to spread the risk. Hence, strong incentives to enroll were put in place so that people who waited until they were 80 and sick, for example, and then enrolled, would pay much more. However, when Medicare began, far fewer people had active group coverage at 65 and beyond. Today, it is much more common to work at 65 and beyond and these penalties typically ensnare those people who worked the longest, paid into the system the longest, and maintained coverage but managed to miss their Special Enrollment Period for Medicare Part B.
These are often people who elected COBRA which almost never makes sense when one is 65 or over and Medicare-eligible. Unfortunately, not all Human Resource employees are aware of the complications of taking COBRA past age 65 and fail to educate employees regarding these issues. As a result, some people are provided COBRA benefits as part of a severance package – or they elect COBRA themselves and stay on COBRA beyond the eight-month SEP window. The example in the video is this type of situation – a client who came to us in his late 70’s who elected COBRA when he sold his business and ended up paying 13 or 14 years’ worth of premium penalties for the rest of his life.
How does the GEP Affect the other Parts of Medicare like an Advantage Plan or Part D?
You can’t enroll in an Advantage Plan without having your Part B in place so if you enroll in Part B during a GEP, you can enroll in an Advantage Plan for the following July 1st to coincide with your Medicare Part B effective date.
Part D (drug coverage) is different because you can enroll in Medicare Part D if you are only on Medicare Part A. As a result, many people who will need to use the GEP for Part B can enroll in a drug plan during the prior annual Medicare Enrollment Period from October 15th to December 7th every year. Late enrollment penalties apply to Part D as well but they are not as burdensome. Ironically, the end of COBRA is a qualifying event that allows one to enroll in Part D without penalty within 63 days of COBRA ending.
An individual enrolling in Part B during a GEP can also choose to enroll in a Part D for a July 1 effective date coinciding with the Medicare Part B effective date.
What about Enrolling in a Medicare Supplement?
You can’t enroll in a Medicare supplement until Part B is in effect.
The Takeaway
The important message here is to plan to avoid the General Enrollment Period. Almost everyone should enroll in Medicare at age 65 except those who have active group coverage through their work or a spouse’s work. Most who maintain the active group coverage need to understand how they will transition to Medicare during a Special Enrollment Period without penalty. Our Medicare Special Enrollment Period video was published on October 14, 2021 and Our Medicare Special Enrollment Period Problems was published on October 21, 2021.
