Medicare Enrollment: A Quick Guide for “First Timers”

Do you know if you qualify or when you need to enroll if you do?

There is no one-size-fits-all path to Medicare enrollment and there are a number of different directions you might take depending on your circumstances, such as your age, employment status, or whether you receive Social Security or Railroad Retirement Benefits[1]. This guide covers the basics: what Medicare is, how the plans work, and when to enroll.

What is Medicare anyway?

Medicare is a federally funded and operated insurance program primarily designed to help the U.S. population of senior citizens. As of August 2025, 68.9 million Americans are currently enrolled. [2]  Before you enroll yourself, it’s important to understand when you’re eligible for Medicare coverage and the benefits and costs of each plan.

Let’s start by looking at the various Medicare plans. Here is brief description of each plan, in simple terms:

• Medicare Part A covers a wide range of inpatient stays at hospitals and skilled or critical care facilities, as well as hospice and home healthcare services. You will not pay a premium for Part A (premium-free Part A) if you are 65 or older and you (or another qualifying person, like your current or former spouse) paid Medicare taxes while working for a certain amount of time (usually 10 years of work). For detailed information on Part A coverage and costs, click here.
• Medicare Part B covers outpatient medical services from physicians and other healthcare providers, some preventative services and possibly medical equipment. For detailed information on Part B coverage and costs, click here.
• Medicare Part C (Medicare Advantage) is an alternative to Part A and B. It is a private option that bundles Part A and B and offers additional benefits including Part D (see below) and vision and dental benefits. Coverage rules and requirements in these plans can vary. For detailed information on Medicare Advantage/Part C coverage and costs, click here.
• Medicare Part D subsidizes the cost of prescription drugs for Medicare enrollees. This can be a stand-alone benefit or automatically included if enrolled with Advantage/Part C. For detailed information on Part D coverage and costs, click here.
• Medicare Supplement Insurance (Medigap) helps cover costs not paid by Original Medicare (Parts A and B), such as copayments, coinsurance, and deductibles. These plans are sold by private insurers and can offer financial protection from unexpected medical expenses. Medigap policies do not include prescription drug coverage and cannot be combined with Medicare Advantage (Part C). For detailed information on Medigap, click here.

Should I enroll?

Once you have thoroughly reviewed the plans and have a firm understanding of cost and coverage, you still need to ascertain when you will need to enroll and what coverage you will need based on your life circumstances. Here are just a few points to consider when asking yourself whether you need to enroll:

• If you have already claimed Social Security, have been receiving Social Security disability benefits for at least 24 months prior to eligibility, or if you receive Railroad Benefits, you will automatically be enrolled in Part A and B. Your Medicare card will arrive 3 months prior to your 65th birthday.
• If you are not working or have no employer-sponsored health insurance, you should enroll during the Initial Enrollment Period (IEP) which is explained below.
• If you are still working and have employer sponsored group health insurance, it gets a little tricky:
• If your company has less than 20 employees, in most cases you must still enroll during the Initial Enrollment Period (IEP).
• If your company has more than 20 employees, you’ll be eligible to enroll in Part A, but you will most likely need to enroll in Part B during a Special Enrollment Period (SEP) after employer coverage ends.

Understanding the Different Enrollment Periods

Whether you’re enrolling for the first time or navigating coverage changes, it’s important to know that Medicare offers several types of enrollment periods. Each one applies to different situations and stages of eligibility.

Like much in life, timing is everything—especially when it comes to Medicare. Once you’re approaching eligibility and have determined the right plan for your needs, it’s essential to enroll at the right time. Missing your window could result in delayed coverage or higher costs.

If you’re receiving Social Security, Social Security disability benefits, or Railroad Retirement benefits, you’ll be automatically enrolled when the time comes. But for everyone else, it’s important to understand and keep track of the various enrollment periods to ensure you get the coverage you need, when you need it.

Initial Enrollment Period (IEP)

The Initial Enrollment Period (IEP) is the 7-month window of time surrounding the month of your 65^th birthday.  For example, if your 65^th birthday is in July, your IEP will span from April until October.

But don’t wait until the last minute. To get coverage when you’re first eligible, you must enroll the month before you turn 65 to ensure you’re covered in the month you celebrate your milestone birthday.

Special Enrollment Period (SEP)

The Special Enrollment Period (SEP) applies to those over the age of 65, who are still covered by group health insurance through an employer in a company with more than 20 employees and who:

• become unemployed and/or
• no longer have group insurance coverage available to them.

The SEP enrollment window begins the month after you stop working or your group health coverage ends and lasts for 8 months.

The sooner you enroll the sooner your coverage begins (one month following your enrollment date).

Medigap Enrollment Timing and Rules

Unlike other types of Medicare coverage, Medigap does not have an annual open enrollment period in most states. Instead, there is a one-time six-month enrollment window that begins when you are at least 65 and enrolled in Medicare Part B. During this time, Medigap plans are guaranteed-issue, meaning coverage cannot be denied due to pre-existing conditions. While there are no official late enrollment penalties, missing this window can result in higher costs or denial of coverage, as insurers may require medical underwriting and can charge more or refuse coverage based on your health. Some states offer similar protections for those under 65 or provide annual opportunities to enroll or switch plans.

General Enrollment Period

The Medicare General Enrollment Period (GEP) runs from January 1 to March 31 each year. During this time, individuals who did not sign up for Medicare Part A (if they pay for it) and/or Part B when they were first eligible, and who didn’t qualify for a Special Enrollment Period, can enroll in these parts of Medicare. Coverage begins the month after enrollment.

Open Enrollment Period (OEP)

The Open Enrollment Period (OEP) runs annually from October 15 to December 7. During this time, individuals who are already enrolled in Medicare can make changes to their coverage. This includes switching between Original Medicare and Medicare Advantage, changing Medicare Advantage plans, or adjusting prescription drug coverage (Part D). Any changes made during this period take effect on January 1 of the following year. It’s a crucial opportunity to reassess your healthcare needs and ensure your plan still meets them—especially if your health status, prescriptions, or provider network has changed.

Late Enrollment and Penalties

It is critical you sign up for Medicare when you are eligible, based on your life circumstances as we have discussed. If not, you can face some unnecessary and costly penalties in the form of late fees.[3] These fees are added into your premium and go up in cost the longer you wait to enroll.

Part A late enrollment penalty

If you do not qualify for premium-free Part A and you do not enroll during your IEP, your premium may go up 10% more than typical and you will pay that amount for twice the number of years you could have been covered. For example:

If you were eligible for Part A for 2 years but didn’t sign up, you’ll have to pay the higher premium for 4 years. Usually, you don’t have to pay a penalty if you meet certain conditions that allow you to sign up for Part A during a Special Enrollment Period.

Part B late enrollment penalty

If you don’t enroll in Part B when you’re first eligible, your premium may go up 10% for each year you could have been covered. You also may pay a higher premium depending on your income. For example:

$185 (2025 Part B standard premium)

+ $37 (20% [of $185] late enrollment penalty)

$222 will be your Part B monthly premium for 2025. This amount is rounded to the nearest $.10 and includes the late enrollment penalty.

Part D late enrollment penalty

If you do not have credible drug coverage and you don’t enroll in Part D or another prescription drug coverage within three months of the expiration of your IEP or SEP, you will pay an additional 1% of the national base beneficiary premium for each month you went without coverage. You also may pay a higher premium depending on your income. For example:

If you waited 14 months after you were eligible for Medicare to join a Medicare drug plan, and you didn’t have creditable drug coverage, you’ll have to pay a 14% late enrollment penalty in addition to your monthly plan premium.

The penalty amount comes from the “national base beneficiary premium” ($36.78 in 2025). The national base beneficiary premium changes each year, so your penalty amount may also change each year. This monthly penalty is added for as long as you have Medicare drug coverage, even if you switch plans.

In 2025:

$36.78 (2025 national base beneficiary premium)

X   0.14 (14% penalty)

$5.15 (rounded to the nearest $0.10 = $5.20)

$5.20 will be your monthly penalty for 2025. This amount is added to your plan’s monthly premium for 2025.

Bottom line, when you are eligible for Medicare, based on your personal circumstance, it doesn’t pay to delay enrollment.

If you have questions about Medicare or retirement planning, please do not hesitate to reach out to an advisor. We’re here to help you navigate Medicare, Social Security, and your broader financial future with clarity and care.