Medicare enrollment is mostly a matter of time

I’m not about to tell you the senior market is set to explode as 10,000 Baby Boomers turn 65 every day in this country because I’m sure you’ve already gotten word by now. Instead, I want to remind experienced agents or those just getting started in this market that it’s mostly a matter of timing for seniors when it comes to getting the most out of Medicare.

You can strengthen your business as an agent by helping your prospective clients navigate the complex Medicare enrollment schedule. If seniors enroll without knowing about possible penalties, their decision could literally cost them for the rest of their lives.

Let your turning-65 clients know there may be penalties for not enrolling in Medicare Parts B and D.

Medicare Enrollment is a matter of time

Most seniors and agents aren’t aware Medicare enrollment is sensitive to time. In fact, the program will only let you know you are eligible to enroll if you are already on Social Security. If a senior waits until full retirement age to enroll in Medicare, he or she will probably owe a late enrollment penalty for the rest of his or her life. And as the full retirement age for Social Security inches past 65, the penalty increases, too.

If a senior does not sign up for Medicare during his or her predetermined seven-month open enrollment period, he or she has to pay a 10 percent annual penalty on the Medicare Part B premium along with a one-percent monthly penalty for Medicare Part D for every month without coverage. The good news is the penalty does not apply as long as you have some sort of credible coverage to give you a  special enrollment period to enroll into Medicare Part B with no penalty.

Not everything counts as credible coverage, either. Group coverage based on current employment does count, for example, but a group retiree plan does not. COBRA coverage doesn’t count either. Perhaps to add insult to injury, seniors have to wait until the general enrollment period (January 1 to March 31) to sign up for Medicare, then wait until July 1 to actually use the coverage.

I’ll give you an example of how these penalties might sneak up on seniors and agents:

I have an 83-year-old-client whose husband passed away on April 19. Her group retiree coverage ended on May 20. She told me that because her group retirement plan had great coverage, she never signed up for Part B. I was sure I heard wrong when she informed me she wasn’t eligible for a special enrollment period, but she was right.

When I called Social Security myself to find out why, I was told that a SEP is based on current employment — retiree coverage doesn’t count. My client has Medicare Part A, but won’t be able to enroll in Part B for over a year. I enrolled her into a Part D plan, and Medicare didn’t charge her a late enrollment penalty since she had credible coverage. But Medicare won’t budge on her Part B coverage. One worker even told her that she would have to pay the penalty for not signing up back in 1999, when she first turned 65!

Here is the real kicker though, the retiree group coverage was through the Federal Employees Blue Cross Blue Shield plan and they have provided no assistance whatsoever.

The best advice you can pass along to your clients is: Enroll in Medicare Parts A and B when you first turn 65. If you aren’t drawing Social Security, you can pay your part B premium on a quarterly basis. You will have to sign up within your seven-month open enrollment window. Part D has a stiffer penalty, but at least you have the same enrollment window.

As well all know, the good news with Part D is its Medicare enrollment period is October 15  to Dec 7 with coverage starting January 1.

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Be aware of these important, but often missed SEP opportunities

I took a call a few weeks ago from an affiliated agent asking me when his prospective client would be able to switch from a Chronic Illness Special Needs Plan (C-SNP) HMO he no longer favored to a MAPD HMO he was eligible for, even with his illness. It turns out the agent called me while he was in the appointment.

While still on the line with me, the agent began to tell his client he would probably have to wait until the next Annual Enrollment Period to change plans. I politely interrupted, asking if the client had some other special election period option (SEP). The agent said, “No, he makes too much income. The only help he gets is Low Income Subsidy (LIS) Extra Help for medications.”

Get familiar with CMS’ most common Special Election Periods to take advantage of more selling opportunities. Clients will appreciate the special attention you’ve given to their unique health situations.

SEPs are where most agents turn a blind eye.

It is estimated that, depending on the state, 23 to 28 percent of Medicare beneficiaries are eligible for some sort of SEP, which means they may change plans at any time or specifically during the lock-in period of December 8 – October 14. SEPs thus constitute a huge block of potential year-round business outside AEP.

Back to the phone call: I reminded the agent that the LIS prescription help qualifies the client to complete an enrollment form right then and there, using the SEP provided to LIS beneficiaries.

The agent secured the sale and earned a grateful client by taking advantage of the SEP.

Take some time to become familiar with SEPs. There are over 40 time-sensitive or year-round SEP categories when counting Medicare Advantage and PDP situations, all to be interpreted as chances for you to gain more trusted clients. Here are a few of the more common examples:

  • Beneficiary moves out of current service area
  • Low Income Subsidy prescription Extra Help or state prescription assistance program and Loss of LIS Subsidy (Yes, it does happen!)
  • Medicare Advantage Disenrollment Period (MADP) for PDP
  • Institutionalized (My favorite one. Includes moving into or out of a facility — additional rules apply!)

Even if you’re in an appointment when a question pops up in your mind, our affiliated agents can feel free to call RB Insurance at

(800) 997 3107. Ask for me, Tom O’Neil.