Medicare today provides critical healthcare benefits to 44 million U.S. seniors, but the process of signing up for the program can be complicated. Those who are already receiving Social Security benefits prior to age 65, when Medicare eligibility begins, get enrolled in it automatically. But what the government defines as "full retirement age" -- the point at which a person can start collecting Social Security and receive the full monthly benefit they're due -- is now between 66 and 67. For that reason, it's quite common for people to turn 65 without having filed for Social Security.

Seniors in that position are responsible for enrolling themselves in Medicare -- and that's where trouble can arise.

Americans are initially able to sign up for Medicare during the seven-month period that surrounds their 65th birthday -- starting three months before their birthday month, and ending three months after it. Those who miss their initial enrollment period must wait to sign up until the program's general enrollment period, which runs from Jan. 1 through March 31 each year.

But there are consequences to not signing up for Medicare at the right time. First, seniors are hit with a permanent 10% Medicare Part B premium surcharge for every 12-month period that they're eligible for coverage but don't take it. Additionally, coverage for those who sign up during Medicare's general enrollment period doesn't begin until July 1 -- a substantial gap.

Older man holding his head

Image source: Getty Images.

However, there's a bill in the works that aims to spare seniors the unpleasant consequences of falling to sign up for Medicare at the correct time. It's called the Beneficiary Enrollment Notification and Eligibility Simplification (BENES) Act, and its ultimate goal is to make the otherwise clunky Medicare enrollment process a lot simpler.

What the BENES Act would do 

In 2019, an estimated 764,000 seniors paid a penalty for enrolling in Medicare Part B too late. The BENES Act would help seniors avoid that penalty, as well as gaps in their health coverage, by doing a number of things:

  • Communicating better with seniors about enrollment as they approach the age of Medicare eligibility
  • Allowing seniors to sign up late for Part B without penalty under special circumstances (such as when hurricanes or natural disasters interfere with their enrollment window)
  • Requiring Medicare coverage to start the month after enrollment for certain seniors who would otherwise face a delay.

All of these changes sound like obvious improvements that would be easy to round up votes for, but as with most things that involve our elected officials, it's not so simple. The BENES Act of 2019 that is now under consideration is essentially an update of the BENES Act of 2017, because this bill has been stalled in Congress for years.

But there's also reason for hope: In early July, 10 former administrators from the Centers for Medicare & Medicaid Services sent a letter to congressional leaders asking them to pass the BENES Act. Perhaps not coincidentally, the House's Energy and Commerce Committee took action to move the bill forward on July 15. And it does have a bipartisan group of legislators as co-sponsors, which improves its odds of eventual passage. 

In addition, COVID-19 could give lawmakers reason to pay closer attention to these issues. The pandemic has certainly highlighted the importance of ensuring people have health coverage, and the fact that Medicare's hazy enrollment process is causing people to have coverage gaps may become a more pressing concern in the coming months.

Of course, at the moment, lawmakers are largely focused on more immediate problems -- namely, negotiating a second major pandemic stimulus package to cushion the U.S. economy and assist those whose finances have been impacted by COVID-19. But once they complete that task, they may also come to the conclusion that this would be an opportune moment to make some changes to streamline Medicare enrollment so that seniors don't suffer needlessly.