In its massive end-of-year spending bill, Congress slipped in some important changes that may improve Medicare coverage for hundreds of thousands of older adults who don’t enroll when they first are eligible. Unfortunately, lawmakers only did half the job. The changes will help, but Congress chose to ignore the real cause of the problem.
This is complicated, just like everything else about Medicare enrollment. Before I explain what Congress did, and did not, do, here is a brief summary of the current system.
The basic rule is this: When you turn 65, you are eligible to enroll in Medicare Part A hospital insurance, Part B insurance for doctor visits and other benefits, Part D drug benefits, or Part C Medicare Advantage managed care.
There is no premium for Part A. But if you do not enroll in Part B or Part D just before or after you turn 65, (called the Initial Enrollment Period) you must pay a premium penalty that increases for every month you delay. You can avoid the penalty if you still are working and have insurance coverage from your job. But otherwise if you don’t enroll in time, you owe a penalty. The longer you wait, the higher the cost.
In addition, if you do not enroll during your initial enrollment period, you must wait until what’s called the General Enrollment Period—usually at the beginning of the calendar year. And that means you may have to wait for as long as seven months before you can get insurance coverage. This can get especially complicated for people who retire and lose employer health insurance after age 65. They are eligible for something called a Special Enrollment Period, but it has its own rules.
To add to the complexity, the general enrollment period for Part B is different than for Part D or for Medicare Advantage. Fred Riccardi of the Medicare Rights Center explains it all here.
Ending coverage gaps
Congress cleaned some of this up. First, it eliminated long coverage gaps by requiring Medicare to begin coverage one month after enrollment, starting in 2023. It also expanded Medicare’s authority to grant relief to people who don’t sign up in time due to natural disasters such as hurricanes.
Finally, it gives the government until 2023 to align the enrollment periods for Parts B, D, and C (Medicare Advantage). Why it should take two years to figure this out is beyond me, and the initial bill would simply have created a common enrollment period. But this is better than nothing.
However, Congress failed to address the real problem: Many people don’t enroll in Medicare because they don’t know they are eligible or that they will be penalized for failing to sign up on time. And they don’t know because the government doesn’t tell them.
The problem Congress didn’t fix
Here’s the problem: If you already are claiming Social Security retirement benefits, you get a notice in advance of your 65th birthday that you also are eligible to enroll in Medicare. When you sign up, premiums are deducted from your Social Security check. Enrollment is pretty simple, even if deciding which plan to buy is a confusing mess.
Fifty years ago, when nearly everyone claimed both Social Security and Medicare at age 65, this was not a problem. But increasingly older adults are delaying Social Security benefits, largely because Congress increased the full benefit age. In 2016, only about 60 percent of 65-year olds were claiming Social Security.
If you are not among them, the government tells you nothing about Medicare. And that creates double-trouble. First, it means older adults needlessly are going without health insurance. And about 760,000 enrollees who have signed up late are paying enrollment penalties that boost their premiums by an average of about 28 percent.
Half the job
The early versions of the measure, called the Beneficiary Enrollment Notification and Eligibility Simplification (BENES) Act, would have required the Social Security Administration to inform everyone that they are eligible to enroll in Medicare Part B when they are about to turn 65, even those not yet claiming Social Security benefits.
But Congress dropped that notification provision. Advocates say it was withdrawn at the request of the Social Security Administration. However, an SSA spokesman would not say whether it opposed the provision.
There is nothing wrong with imposing a penalty on consumers who decline health insurance, including Medicare. Such a tool can prevent people from gaming the system by waiting to buy insurance until they are sick, which raises premiums for everyone else. But long coverage delays make little sense. Neither does a system that won’t tell people that they are eligible for benefits.
Congress gets credit for fixing the first problem. But it only did half the job.