If You Don’t Have Medicare Part B, The GEP Can Bail You Out

You’ve no doubt heard that the Medicare Advantage Open Enrollment Period started January 1. Also going on right now is the General Enrollment Period (GEP). It is not as well known but it is very important for those who do not have complete Medicare coverage. These questions address the important points.

What is the General Enrollment Period?

It shares the same time frame as the Medicare Advantage Open Enrollment Period, from January 1-March 31, but that is about the only thing these two periods have in common.

The General Enrollment Period provides an opportunity to make up for a past oversight – the failure to enroll in Part B.

Why does this oversight occur?

Here are three big reasons for ending up in the GEP.

1. Not enrolling in Part B during the Initial Enrollment Period.

Only those who have a group health plan based on their or their spouse’s current (active) employment can delay Part B enrollment at age 65. Other types of coverage, such as a retiree plan, may be sponsored by an employer but they are not based on current employment. Those plans then become secondary to Medicare after age 65. Without Medicare, there is no primary payer and it’s like having no insurance.

2. Missing the chance to enroll in Part B during the eight-month Special Enrollment Period.

Those who have employer group coverage can qualify for a Part B SEP, which allows them to enroll without facing a late enrollment penalty or delay in coverage at retirement. This is an eight-month period that begins with the date employment or coverage ends, whichever comes first. Missing the chance to enroll happens way too many times to those who have COBRA continuation coverage. Because the health plan is the same as they had before retirement, they believe they’re covered and don’t need Medicare until COBRA ends a year or so later, after their SEP has ended.

3. Failing to pay the Part B premium.

Medicare has a procedure for handling nonpayment of premiums. If the premiums are not paid by the end of the grace period, Part B is canceled. The only way to get Part B again is to enroll during the GEP.

Besides COBRA and retiree plans, is there any other type of coverage that puts someone at risk?

Basically, those who do not have a group health plan based on their or their spouse’s current employment are at risk. Besides the two mentioned, this includes individual plans, VA coverage, and no plan at all.

One important note: Those who have a group plan sponsored by a company with fewer than 20 employees should also enroll in Part B during the IEP. That’s because this coverage becomes secondary to Medicare after age 65.

Why is Part B necessary?

Part B, medical insurance, is the outpatient component of Medicare. Without it, there is no coverage for doctors’ visits, diagnostic tests, or outpatient procedures, services and some medications.

What is the procedure for enrolling during the GEP?

One way is to call Social Security at (800) 772-1213. However, my clients have reported long hold times or disconnections.

A better way is to complete one form, Application for Enrollment in Part B (Medical Insurance), and submit it to the local Social Security office. It is important to keep a copy and send it by FedEx or UPS to track and have proof of delivery.

When will Part B begin?

According to the CMS procedure, Part B will take effect the first day of the month after enrollment. Submitting the CMS-40B form in early January, for instance, should result in a February 1 start date. After Part B is in place, there is an opportunity to enroll in additional coverage.

Are there any repercussions associated with missing Part B enrollment and the GEP?

Here are four.

• Gap in healthcare coverage: If an employer plan ends in April or Part B is canceled in July for nonpayment, the individual will not have coverage for several months.
• Having to pay 100% of the out-of-pocket costs for outpatient services.
• Cancellation of a Medicare supplement plan (Medigap policy) or a Medicare Advantage plan: Part B enrollment is a requirement to qualify for one of these plans.
• A Part B late enrollment penalty: The penalty is 10% of the annual Part B premium for every year (12 months) Part B enrollment was delayed. Let’s say that a woman retired in January 2023 and enrolls in Part B this month. Part B would be effective February 1, 2025. She is two years late, which would be an additional $37 per month this year (10% of $185 times two years). The penalty amount changes every year and follows for life.

Are there any tips for avoiding this situation?

The best tip is: No matter your situation, pay attention to Medicare during your Initial Enrollment Period. Do your research and figure out how your coverage coordinates with Medicare.

• If you have an employer group plan sponsored by a company of 20 or more employees and it’s based on current employment of you or your spouse, you can consider deferring Part B enrollment without penalty or delay. But, when retiring, be sure to enroll before the end of your Part B SEP.
• If you have any other coverage, enroll in Medicare before the end of your IEP. Then, you’ll never have to say, “Oops, I missed my chance.”