Some people prefer to take the stairs, others the escalator. When it comes to Medicare, you do not always have a choice. Sometimes you have to apply on your own but other times you are automatically enrolled.

Automatic Enrollment for People on Social Security

If you are receiving Social Security benefits of any kind at the time you become eligible for Medicare, you will be automatically enrolled in Part A and Part B. The one exception is when you live abroad, defined as being out of the 50 states, D.C., or U.S. territories for at least 30 consecutive days. In that case, you would only be enrolled in Part A and would have to sign up for Part B on your own.

Specifically, if you are receiving Social Security retirement benefits when you turn 65, you will be automatically enrolled on your birth month. People on SSDI will be enrolled on their 25th month of disability benefits, unless they have amyotrophic lateral sclerosis (ALS). Because of the severity of the condition, automatic enrollment happens the first month of their SSDI benefits.

PRO:

• You will never get stuck paying Medicare Part A or Part B late penalties.

CON:

• You may not be automatically enrolled in the Medicare plan you want. If you miss changing plans during the Initial Enrollment Period, you may have to wait until Medicare Open Enrollment (October 15 – December 7) to do so.
• You may not want to be on Medicare at all. For example, you may want to stay on your employer-sponsored health plan instead.
• You will not be automatically enrolled in drug coverage, increasing your risk for Part D late penalties if you forget to sign up.

Automatic Enrollment for People on Medicaid

According to the latest data from the Centers for Medicare & Medicaid Services (data released in 2022), more than 11 million people were eligible for both Medicare and Medicaid in 2020. This is known as being dual eligible.

Medicaid programs vary based on the state you live in. States that expanded Medicaid under the Affordable Care Act tend to have more generous coverage. Regardless of their choice to go with Medicaid expansion, 40 states and D.C. use managed care organizations (MCOs) to provide care to beneficiaries. People on one of these managed Medicaid plans may face automatic enrollment when they become eligible for Medicare.

Medicare Advantage Plans

People who are dual eligible and who are also on a managed Medicaid plan will be automatically enrolled (referred to as default enrollment) in a certain type of Medicare Advantage plan, known as a Special Needs Plan. These dual-eligible Special Needs Plans, also known as D-SNPs, are offered by the same company that managed their Medicaid plan. The D-SNP needs to have at least a three-star rating and be approved by their respective state Medicaid programs. For the record, all D-SNP plans have prescription drug coverage.

PRO:

• You won’t get stuck with Part D late penalties.

CON:

• You may prefer a Medicare plan with a higher star rating. You may have to wait until Medicare Open Enrollment (October 15 – December 7) to change plans.
• Your new plan may offer too much or too little drug coverage. You may need to opt out of drug coverage if you have creditable coverage elsewhere or choose a more extensive plan if you are on medications not covered by the assigned plan.

Part D Plans

People who are dual eligible and who are also on a managed Medicaid plan will be automatically enrolled in drug coverage (referred to as automatic enrollment) as will people who qualify for Medicare Savings Programs, the Extra Help Part D Low-Income Subsidy (LIS), and Social Security Insurance (referred to as facilitated enrollment).

You enrolled in Original Medicare but did not choose a Part D plan on your own. You will be automatically enrolled in a basic Part D plan from the MCO that managed your Medicaid plan. The Part D plan will have a monthly premium less than the state’s regional thresholds.

You enrolled in a Medicare Advantage plan that does not have drug coverage. The MCO will put you on one of their Medicare Advantage plans with prescription drug coverage (an MA-PD plan).

You enrolled in a Medicare Advantage plan but that MCO does not offer an MA-PD plan. The MCO will enroll you in one of their stand-alone Part D plans. They have to pick the least expensive option when adding up the combined Medicare Advantage and Part D premiums.

PRO:

• You won’t get stuck paying Part D late penalties.

CON:

• You may already be enrolled in a plan that has creditable drug coverage and will have to take steps to opt out of any assigned Part D coverage.
• You may need more comprehensive prescription drug coverage than what the assigned plan offers. You would have to change to the plan of your choice during one of the quarterly special enrollment periods for Medicaid and Extra Help (January – March, April – June, or July – September) or during the Medicare Open Enrollment Period (October 15 to December 7).

 

10 Things to Know About Medicaid Managed Care. (2022). KFF. https://www.kff.org/medicaid/issue-brief/10-things-to-know-about-medicaid-managed-care/

Centers for Medicare & Medicaid Services Data: Summary Statistics on Beneficiary Enrollment. (2022). CMS.gov. https://data.cms.gov/summary-statistics-on-beneficiary-enrollment

Medicare Managed Care Manual Chapter 2 -Medicare Advantage Enrollment and Disenrollment. (2020). CMS.gov. https://www.cms.gov/files/document/cy2021-ma-enrollment-and-disenrollment-guidance.pdf

Mulcahy, J. (2018). Enrollment Guidance Policy Changes and Updates for Contract Year 2019. CMS.gov. https://www.cms.gov/Medicare/Eligibility-and-Enrollment/MedicareMangCareEligEnrol/Downloads/HPMS_Memo_Enrollment_Guidance_Policy_Changes_and_Updates_CY2019.pdf

Where States Stand on Medicaid Expansion. (2016).  The National Academy for State Health Policy. https://www.nashp.org/states-stand-medicaid-expansion-decisions/

Your Payments While You are Outside the United States. (2016). SSA.gov. https://www.ssa.gov/pubs/EN-05-10137.pdf