Medicare—the nation’s federal health insurance program for people ages 65 and older and some younger people with long-term disabilities—currently provides vital health care coverage to about 64 million people. Nearly all Americans not already covered by the program become eligible when they turn 65. While the Social Security Administration automatically enrolls some newly eligible people in Medicare, about 4 out of 10 adults nearing Medicare eligibility must take active steps to enroll. That can create significant challenges for many people because signing up for Medicare can be complicated, with different rules applying for each part of the program.
In the case of Medicare Part B—which covers doctor's visits, medical tests, emergency room visits, and other outpatient services—the enrollment process's complexity often results in people ending up with a coverage gap before their Part B benefits start. (Another part of Medicare, Part A, covers inpatient hospital, skilled nursing facility, and home health care services.)
Congress has recently made some important changes aimed at helping people have a smooth transition to Medicare. Included in the Medicare provisions of the federal spending bill signed into law in December 2020 is an important simplification to Medicare's Part B enrollment that will help some people avoid delays in coverage after they sign up. The change marks meaningful progress. However, despite this progress, additional improvements would ensure timely access to health care coverage for many more people who rely on the program.
Enrolling in Medicare Part B Today
First, let’s look at how Medicare Part B enrollment works now.
Most people are automatically enrolled in Medicare when they reach age 65. In general, if a person who is approaching age 65 already gets Social Security benefits, the Social Security Administration will automatically enroll them in Medicare Parts A and B. Coverage usually begins on the first day of the month in which they reach age 65. There is an exception for people living in Puerto Rico: if they are receiving Social Security benefits before they turn 65, they will automatically be enrolled in Part A, but not in Part B.
Other people must take steps to enroll. As a general rule, people who do not already get Social Security benefits when they are nearing age 65 must actively enroll in Medicare. Most people do not have to pay premiums for Part A and can sign up anytime for Part A (starting three months before the month they turn 65). After they sign up, Part A coverage will go back six months retroactively, but no earlier than the month they turn 65.
However, for Part B, they can sign up only during specific enrollment periods. For most, the best time to enroll in Part B is during the three months preceding the month of their 65th birthday. For example, if a person’s 65th birthday is in mid-June, the best time to sign up is between March 1st and May 31st of that year. Enrolling during this period ensures that their Part B coverage will begin as soon as possible—on the first day of the month in which that person turns 65.
(Of note: There are special rules for people who are working at age 65 and get health care coverage through their employers. For some of these individuals, it may make sense to delay signing up for Part B, depending on the size of their employer).
Consequences of delayed enrollment. For a variety of reasons, many people do not sign up for Part B during their optimal time period. These include individuals not being aware that they are close to becoming eligible for Medicare, not knowing that they need to take action to enroll or when to do so, and not knowing they might have to pay more for Part B if they delay signing up (more on that below).
The consequence is a potentially long waiting time after they do enroll for Part B before that coverage starts. Under current rules, some people who delay signing up for Part B may have to wait as long as six months between the time they enroll and when their coverage begins. For many older adults, such delays can mean they must shoulder the full cost of doctors’ visits and other Part B services.
To make matters worse, some people who do not sign up for Part B when they are first eligible may also face a substantial and permanent late-enrollment financial penalty. This penalty may kick in if a person misses their Initial Enrollment Period—which is the seven months-long period that starts three months before their 65th birthday month—and instead signs up during Medicare’s General Enrollment Period, which occurs in January through March each year.
New Rules Will End Long Coverage Gaps
Congress has now partly fixed the coverage gap problem with new, simpler rules that will bring some welcome changes for people who need to sign up for Medicare Part B. Starting in 2023, people who delay enrolling in Part B until after they reach age 65 will no longer face potentially lengthy waiting periods. For people who sign up after their 65th birthday, Medicare coverage will begin on the first of the month after they sign up.
Here is how the new rules will work in practice. If someone turns 65 in, say, June and does not sign up for Medicare Part B until September (the last month of their Initial Enrollment Period), coverage will start on October 1st. In contrast, under today’s rules, the person would have to wait until December 1st for their Part B coverage to start.
Similarly, under the new rules if a person signs up during the General Enrollment Period, their Part B coverage will begin the month after they sign up. That’s a substantial improvement over current rules, under which people who enroll in Part B during the General Enrollment Period have to wait until July 1st for their coverage to start.
For some older adults, these changes will ensure Part B coverage begins without the lengthy delays that can occur under current law. With Medicare enrollment expected to continue growing rapidly as more members of the baby-boom generation become eligible for the program, these improvements will benefit many people.
Further Ways to Reduce Delays in Signing Up for Part B
Despite this significant change, more can be done to address enrollment delays. Here are two important steps policymakers can take to help more people get their Medicare Part B coverage as soon as possible:
- Require the Social Security Administration to notify people soon to turn 65 who will not be automatically enrolled in Medicare that they are nearing eligibility and need to sign up. The notice should make clear how and when people can enroll and explain that those who delay Part B enrollment may face a financial penalty.
- Ensure adequate funding for the Medicare program to conduct outreach and education programs that give consumers easy access to simple, clear, and accurate information about Medicare enrollment. Also, guarantee sufficient funding for the State Health Insurance Assistance Programs, which offer free and unbiased help with understanding Medicare enrollment rules and signing up for the program.
Consumer organizations and employers can also play a key role by connecting people nearing Medicare eligibility age to resources and information to help them with enrollment decisions.
Providing people with the information they need to sign up for the program will ensure that millions of newly eligible people have timely access to critical Medicare benefits and, ultimately, to the health care they need.
For more information on Medicare enrollment, visit AARP's Medicare Resources or Medicare.gov.