Medicare and the New Year: A Medicare Customer Question

The 2021 Consolidated Appropriations Act made sweeping changes in Medicare enrollment rules.

In October, the Centers for Medicare and Medicaid Services announced the regulations needed to implement the changes.

The changes will help some seniors get special enrollment periods for Medicare Part B coverage, even if they missed their initial enrollment periods. The SEPs could keep eligible clients from incurring Medicare Part B late fees.

The Question:

What are the new Medicare special enrollment period rules, and who do they apply to?

The Answer:

To understand the new special enrollment period rules, or SEP rules, you need to understand basic Medicare program terminology.

Medicare Part A is the Original Medicare program that covers the cost of inpatient hospital care.

Medicare Part B covers physician services and outpatient hospital care.

Stand-alone Medicare Part D prescription drug plans cover drugs, and Medicare Advantage plans typically include Part A, Part B and Part D coverage.

Most Medicare-eligible citizens use an initial enrollment period, or IEP, to sign up for full Medicare coverage, including Part B coverage. The IEP includes the three months before a client's 65th birthday, the month of the client's 65th birthday and the month after the client's 65th birthday, or, for a client who continues to have employer-sponsored health coverage after age 65, the eight-month period after loss of employer or group plan coverage.

Clients who sign up for Medicare Part B coverage during the IEP can get the coverage without incurring any penalties.

Some late enrollees might qualify for a special enrollment period, or SEP.

Other clients who miss enrolling during the IEP period must wait to register until the next general enrollment period, or GEP, which occurs every year between January and March

While clients wait for the next GEP, they may accrue a late Medicare Part B enrollment fee. Affected clients must pay the late fee every month for the remainder of their time as a Medicare beneficiary; for most late enrollees, this means the rest of their lives.

Clients could enroll in stand-alone Medicare Part D prescription drug plans and Medicare Advantage plans during other enrollment periods, and do so without paying a fee, but Part D provides prescription drug coverage only, and Medicare Advantage plans do not precisely mirror Original Medicare.

Jan.1, 2023, brings another option: Eligible seniors may immediately sign up for full Medicare plans during new types of SEPs if they meet certain conditions.

Clients could qualify for the new SEPs if:

They have recently been released from incarceration.
They were recently affected by a disaster or government-declared emergency.
They failed to sign up during the initial period because of errors by their employer or private health plan administrators related to timely enrollment. The senior must show that one of these entities was at fault for the enrollment failure.
Their Medicaid coverage terminates after the COVID-19 public health emergency declaration ends, or on or after Jan. 1, whichever comes first).
They meet other conditions that will be evaluated on a case-by-case basis, when circumstances out of their control prevent them from enrolling.

Seniors who leverage special enrollment will no longer be assessed the Part B fees for the duration of their enrollment.

At first glance, some of these provisions can seem complicated, especially for beneficiaries who are unfamiliar with the world of Medicare, so it can be helpful for them to consult with a Medicare specialist.

The overarching goal of special enrollment is to prevent seniors from falling into so-called "coverage gaps," or periods of time when they have no health insurance. Many have been stuck without insurance for weeks or even months because they lost coverage and could not afford to purchase a new private plan, then had to wait for the GEP to sign up for Medicare.

Slated to roll out in the New Year, these changes are undeniably for the better and will make coverage more accessible and affordable for beneficiaries.

Bethany Cissell is a health care insurance services specialist at Allsup.