Medicare Special Enrollment Periods

Are you eligible for a Medicare Special Enrollment Period?

According to data from the Centers for Medicare and Medicaid Services (CMS), enrollment in Medicare topped 63 million people as of July 2021. This federal health program’s numbers will continue to rise over the next decade or so. By 2030, enrollment is projected to hit about 78 million people. With so many beneficiaries, it’s crucial for consumers to be able to navigate the proper Medicare enrollment process smoothly and conveniently. As such, Medicare offers various annual time windows for enrollment, including the Initial Enrollment Period (IEP), the General Enrollment Period, the Open Enrollment Period (OEP) and special enrollment periods based on individual circumstances.

Of particular importance is the Open Enrollment Period (OEP), the window for all members to review and make changes to Medicare Part C (Medicare Advantage or MA) and Medicare Part D (prescription drug coverage) plans. These plans are actually two of Medicare’s most popular and profitable segments. Around 42 percent of Medicare beneficiaries have MA plans in 2021, which amounts to 26.7 million people. And per the CMS, about 48.5 million people had a Part D drug plan in 2021.

But despite members’ best efforts, enrollment may be missed due to family, health or other factors. Fortunately, enrollees may qualify for certain Medicare Special Enrollment Periods (SEPs). The 5-star Medicare special enrollment period allows a single, annual switching of plans utilizing the program’s ratings system. Another SEP is designed for special circumstances affecting enrollment (e.g., moving, employment or coverage changes). Depending on the specific SEP granted, beneficiaries may be able to change any of the four Medicare parts.

Medicare’s SEP Based on Star Ratings

When applying for Medicare special enrollment periods, it’s important to know that they’re not guaranteed. Each SEP has its own rules and considerations. Certain factors, such as consumers’ age, employment status, location and state of health, are taken into account. But for those found eligible, the 5-star Medicare special enrollment period may extend enrollment. This SEP utilizes the healthcare program’s own Star Ratings system, which grades the performance of Medicare Advantage and Part D plans. Remember that MA plans are sold through private insurers.

Medicare Advantage and Part D plan coverage and costs change every January, and they can vary dramatically. Each October, Medicare releases the new plan ratings, which are applied to the next calendar year. Under this ratings system, plans are examined in various categories and scored on a scale of 1 to 5 stars (5 being the highest). Then, each plan receives one overall star rating for its performance, allowing enrollees to better compare multiple plans.

With the Medicare 5-star SEP, you can sign up for and change MA and Part D coverage. But you can also enroll in or switch to 5-star-rated plans, as well as a stand-alone Part D plan, provided they’re within your service area. However, this SEP can only be used once per calendar year:

• SEP enrollment for 5-star plans begins on December 8 of the year before the plan gains 5-star status.
• Enrollment ends on November 30 of the year that it gains 5-star status.
• When you enroll in a 5-star plan during this special enrollment period, your coverage becomes effective on the first of the following month after you enroll.

A plan’s star rating is a good indicator of overall, long-term quality. Low-performing plans, those receiving one or two stars for three years in a row, have red flag icons. Five-star plans have their own icon, a five-pointed star with a “5” in the middle.

The Medicare Plan Finder tool helps to locate plan ratings. You might instead prefer to call (800) MEDICARE. If you’re currently enrolled in a low-rated plan, Medicare will send a letter. They won’t remove you from the plan, though, so you’ll need to review your plan’s costs and coverage if you’re not satisfied. However, plan ratings aren’t the only factor to consider. When comparing policies, you may find that lower-rated plans offer more providers or that higher-rated plans may be too expensive.

Medicare Advantage plans are rated on their performance in five different categories (for policies covering both health and drug services, all topics below may apply):

1. Staying healthy: This includes screenings, tests, vaccines, wellness visits and other preventive care that helps members stay on top of their overall health.
2. Managing chronic (long-term) conditions: This covers medical care given to people with various long-term health conditions and how that care helps them to manage symptoms.
3. Member experience with the health plan: This category includes satisfaction ratings among members.
4. Member complaints and changes in the health plan’s performance: This aspect covers problems that members have had with various aspects of the plan. It also covers performance over time, including any improvements that might have been made.
5. Health plan customer service: This section rates how well a plan handles member appeals, among other things.

Medicare Part D plans are scored on four different categories:

1. Drug plan customer service: how well a plan handles appeals from members
2. Member complaints and changes in the drug plan’s performance: problems that Medicare and members found with the plan over time, as well as performance issues and improvements
3. Member experience with the plan’s drug services: satisfaction ratings among members
4. Drug safety and accuracy of drug pricing: how accurate the plan prices drugs and the frequency with which members who need certain prescriptions are prescribed medication in safer, clinically recommended ways

SEPs for Special Circumstances

Medicare may grant you a special enrollment period (SEP) based on certain special circumstances, allowing you to enroll or make changes to Medicare Advantage and Part D coverage. These SEPs require original Medicare enrollment. During special enrollment periods, you can enroll in Medicare Advantage or Part D.

• If you lose your coverage from work or a union group, then you have two full months from the date that your employer or group-based coverage ends to sign up for Medicare Advantage or Medicare Part D.
• If you or your spouse loses coverage through your employer, a union group or the Veterans Administration, then you also have two full months from the date your coverage ends to sign up for MA or Part D coverage.
• Your special enrollment period starts on the earliest date that you lose coverage. So, for instance, if you lose an employer-sponsored plan on July 15 and VA coverage on October 1, then your special enrollment period would start on July 15 since that loss came first.

There are additional considerations for people with employer-sponsored coverage. For example, people with employer-sponsored coverage may have postponed signing up for Parts A or B (or both). You qualify for an SEP as long as there were more than 20 employees when you turned 65. You (or your spouse) also had to have been covered through the job or union. The times to apply for this SEP are:

• Any time you or your spouse is still covered or
• During the 8 months following the month the coverage or employment ends (whichever is first).

Waiting too long to enroll (in Part B, specifically) may put you at risk for a penalty; however, if granted an SEP, it’s likely that you’ll be exempt.

Beneficiaries who are disabled and working can qualify for this SEP, provided their employer has more than 100 employees. This applies to enrollees with coverage from a working family member as well. But those with COBRA or retiree health plans don’t qualify for SEPs; these plans aren’t considered current employment. You’ll want to enroll in Medicare when first eligible to avoid paying higher premiums.

Medicare also grants special enrollment periods for other situations, such as:

Changing locations

• Moving outside of your plan’s service area: If you move to a new place that’s outside of your current service area, then you can switch to a Medicare Advantage or Part D plan. Tell your plan early to get a jumpstart on choosing a new policy. If you do, your enrollment period starts the month before the month that you move and runs for two full months after you move. If you tell your plan after the move, then you can’t switch plans until the month that you move. Your enrollment period lasts for two full months afterwards as well.
  • Note: If you have an MA plan, you can opt to switch to original Medicare if you move. Keep in mind, though, that if you don’t choose another MA plan when you move, you’ll be switched to original Medicare automatically once you get disenrolled from the MA plan.
• Moving to a new address in the same service area: You can switch to a new MA or Part D plan if you move to a new address within the same service area as long as there are new plan options where you move. The same time limitations apply in this scenario as they do if you were to move outside of your plan’s service area.
• Coming back to the U.S. after living abroad: If you’ve been living in another country and you return to the states, then you can enroll in an MA or Part D plan. Your enrollment period starts the month that you move back to the U.S. and lasts for two full months afterwards.
• Living in, moving to or leaving an institution: For people who are about to move into an institution, currently living in one or about to leave one, there’s a special enrollment period that lasts for the duration of your stay plus two full months after the month that you move out. An institution includes places like skilled nursing facilities or long-term care hospitals. During this enrollment period, you can:
  • Enroll in a Medicare Advantage or Part D drug plan
  • Switch to a new MA or drug plan from an existing MA or drug plan
  • Disenroll from Medicare Advantage and enroll in original Medicare
  • Drop your Part D coverage altogether
• Being released from jail: If you get released from jail, then you can enroll in Part D or Medicare Advantage starting the month after you get released. You’ll have two full months afterwards to enroll.

Losing your current coverage

• No longer qualifying for Medicaid: It’s estimated that about 1.8 million Americans will qualify for a special enrollment period each year because they no longer qualify for Medicaid (a program for low-income individuals and families). If you lose Medicaid coverage, you can change your plan for two full months starting the month you learn that you no longer qualify for Medicaid. If you’ve lost coverage for the next year, then your SEP lasts from January 1 through March 31. During the SEP, you can:
  • Enroll in a Medicare Advantage or Part D drug plan
  • Switch to a new MA or drug plan from an existing MA or drug plan
  • Disenroll from Medicare Advantage and enroll in original Medicare
  • Drop your Part D coverage altogether
• Voluntarily dropping employer-sponsored coverage, union coverage, or COBRA: If you voluntarily drop an existing plan through work, a union or COBRA, then you can enroll in an MA or Part D plan starting the month that your coverage ends. The SEP lasts for two full months afterwards.
• Involuntarily losing creditable coverage (or coverage becoming uncreditable): Within Medicare, creditable coverage refers to a policy that has a similar actuarial value to what Medicare Part D covers. For instance, you might have prescription coverage through your employer or your spouse’s employer instead of Medicare. If you lose this coverage after your initial sign-up period for Medicare has passed, then you can sign up for a Medicare Part D drug plan or a Medicare Advantage plan with drug coverage. The SEP lasts for two full months after you lose creditable coverage or you receive a notice from the insurer that the coverage is no longer creditable, whichever comes later.
• Leaving a Medicare Cost Plan: If you drop your Medicare Cost Plan, then you can enroll in a Medicare prescription drug plan. The enrollment period lasts for two full months after you drop the Cost Plan.
• Dropping a PACE plan: A Program of All-inclusive Care for the Elderly (PACE) plan is a plan that combines features of Medicare and Medicaid into one expansive plan for specific populations of the elderly. If you decide to drop your PACE plan, then you have two full months after the month you drop your coverage to enroll in a Medicare Advantage or Part D plan instead.

Pursuing other coverage options

• Enrolling in employer-sponsored or union coverage: If you decide to enroll in your employer’s health plan or a union plan, then you can drop your Medicare Part D or Medicare Advantage coverage as soon as your employer or union allows you to make changes.
• Getting drug coverage that’s comparable to Medicare Part D: Certain types of coverage, like VA coverage or TRICARE, offer drug plans that are comparable to what Medicare offers. If you have or enroll in one of these plans, then you can drop your MA or Part D coverage at any time.
• Enrolling in a PACE plan: PACE covers prescription drugs, so if you enroll in a PACE plan, then you can drop Part D or MA coverage at any time.

Medicare contract changes

• Official actions or sanctions taken by Medicare: If there’s a problem related to your current Medicare plan, then Medicare may take official action against it, including certain sanctions. If that happens, you can switch to a new MA or Part D drug plan. Enrollment is determined on an individual basis.
• Termination of a plan’s contract by Medicare:
• A plan’s contract not being renewed by Medicare:

Other special circumstances

• Qualifying for Extra Help: The Extra Help program enables seniors to receive federal assistance in paying for some or most of Part D coverage. If you’re eligible, then you can join, switch or drop Part D coverage at any time. Your coverage will start on the first day of the month after you qualify for Extra Help and ask to join.
• Enrolling in or losing SPAP coverage: The State Pharmaceutical Assistance Program (SPAP) is a state-sponsored program designed to help offset the costs associated with prescription drug coverage. If you’re eligible for an SPAP and your state offers one, then you can join a Part D plan or a Medicare Advantage plan with drug coverage. If you lose your SPAP eligibility, you can also switch to a new Part D or MA plan with drug coverage. These changes can only be made once per calendar year.
• Dropping Medigap when you first sign up for Medicare Advantage: If you had a Medigap policy in place when you signed up for Medicare Advantage and you drop that Medigap policy voluntarily when you first sign up for the MA plan, then you’ll need to switch to original Medicare. You have 12 months from when you first signed up for an MA plan to switch to original Medicare. You’ll also be able to buy a new Medigap policy once you switch.
• Enrolling in a Medicare Chronic Care Special Needs Plan: For people with certain medical conditions, Medicare offers a type of Medicare Advantage plan called a Special Needs Plan. These plans cater to individuals with chronic problems, such as End-Stage Renal Disease. If you qualify for this type of coverage, then you can enroll at any time. However, you should note that once you enroll, you won’t be able to use the special enrollment period to make any further changes to your plan.
• Dropping a Special Needs Plan: If you lose eligibility for your Special Needs Plan, then you can switch to a Medicare Advantage plan with drug coverage or a Part D plan. The enrollment period for this scenario starts from when you lose your special needs status and ends three months after your plan’s grace period ends.
• Joining or not joining a plan based on federal employee error: Errors made by federal employees may impact your decision to enroll. For example, you may sign up for the wrong Part D plan because a federal employee got the names of the plans switched up. Errors do happen. This particular SEP is determined on an individual basis. If you’re granted an SEP for this situation, then you’ll receive a notice from Medicare about the error. You’ll have two months from the time you’re notified to make changes, during which time you can:
  • Enroll in a Medicare Advantage or Part D drug plan
  • Switch to a new MA or drug plan from an existing MA or drug plan
  • Disenroll from Medicare Advantage and enroll in original Medicare
  • Drop your Part D coverage altogether
• Lack of proper notice regarding losing creditable coverage: Insurers are supposed to tell you if you lose creditable coverage, which is coverage that’s as good as what Medicare offers. If you’re enrolled in a private plan with creditable coverage and you lose that coverage without being properly notified, then you can switch to a Medicare Part D plan or a Medicare Advantage plan with drug coverage. You’ll have two full months from the month that you receive the notice of error from Medicare or your plan. You may also be exempt from late penalties if you can prove that you were unaware of the error before you signed up.