(The opinions expressed here are those of the author, a columnist for Reuters.)

By Mark Miller

CHICAGO, Jan 28 (Reuters) - Signing up for Medicare is too complicated - the process is fraught with potential errors that can saddle you with costly penalties and gaps in coverage while you wait for enrollment to kick in.

Now, some help is on the way. The $2.3 trillion federal COVID-19 relief and spending bill https://www.reuters.com/article/us-usa-trump/u-s-house-approves-2000-coronavirus-aid-checks-sought-by-trump-idUSKBN2920I0 signed into law last month included important changes aimed at streamlining Medicare enrollment contained in the BENES Act, a bill that has been bouncing around Congress for several years (https://reut.rs/2KT2KRq). The changes will shorten long waiting times for coverage to begin, and streamline other outdated features of Medicare enrollment.

Unfortunately, one of the most important provisions of the BENES Act did not make it into the final version of the relief bill: a requirement that the government do more to communicate with people about their eligibility to enroll as they near their 65th birthdays.

Nonetheless, the new law brings some welcome reform - starting with elimination of potentially long waiting periods for coverage to begin after enrollment.

Currently, Medicare has three enrollment periods. The Initial Enrollment Period includes the three months before you turn 65, the month of your 65th birthday and the three months after you turn 65 or become eligible for Medicare due to receiving Social Security disability benefits. Coverage begins one to three months later, depending on when you enroll. For people transitioning from employer coverage at a later age, a Special Enrollment Period is available for eight months after other insurance ends, and coverage begins the first month after you enroll.

But if you miss either of those enrollment opportunities, you must wait for a General Enrollment Period that runs from Jan. 1 to March 31 each year - and Medicare coverage under Part B and (in some cases) Part A does not begin until July 1.

And the delay can be much longer in some cases.

Let’s say you realize in April this year that you should have been enrolled earlier. Under the current system, your coverage would not begin until July 2022.

But the new law provides that your coverage will begin the month after enrollment, starting in 2023.

"Thanks to these common sense solutions people new to Medicare will no longer languish for months without health coverage,” said U.S. Senator Bob Casey, a Pennsylvania Democrat who co-sponsored the BENES Act. "Closing these outdated coverage gaps will protect seniors and people with disabilities from the harmful effects of going without essential care."

Why this change should require two years to implement is beyond me, but progress is progress.

THE MISSED OPPORTUNITY

Still, a very important part of the BENES Act wound up on the cutting room floor: a provision that would have required the Social Security Administration to inform you as your 65th birthday approaches that you are eligible to enroll in Medicare Part B, and the consequences you might face if you mistakenly delay enrollment.

If you already are receiving Social Security benefits at that time, Medicare enrollment is automatic. But for everyone else, an alert about this would be enormously helpful.

Failure to enroll at age 65 can saddle you with stiff late enrollment surcharges equal to 10% of the standard Part B premium for each 12 months of delay - a penalty that continues for the rest of your life. The penalties can really add up over the years as base premiums rise. And for married couples, the penalties can effectively double if both spouses fail to enroll on time.

Medicare’s prescription drug program (Part D) comes with a much less onerous late enrollment penalty, equal to 1% of the national base beneficiary premium for each month of delay.

You need to enroll during your initial enrollment period in order to avoid the late penalties - with one major exception. If you are still actively employed and covered by your firm’s insurance, you can take advantage of a Special Enrollment Period later on, and delay Medicare enrollment without incurring the late penalties. A spouse covered on your workplace policy can do the same.

However, if you work for a company with 20 or fewer employees, Medicare becomes the primary payer, so you should enroll when first eligible to avoid gaps in coverage and high out-of-pocket costs.

Is your head spinning yet? Wait - there is more.

Let’s say you lost your job at 64 and have COBRA insurance from your former employer. Can you keep that policy and delay Medicare enrollment? No - because you no longer are "actively" employed by that insurance plan sponsor. Perhaps you enrolled in a policy through the Affordable Care Act - you still must enroll in Medicare at age 65.

The original language of the BENES Act required Social Security to add information about Medicare deadlines to annual benefit statements. That provision was dropped, although revising the language of an existing Social Security form would not have been an onerous requirement for the agency.

The new legislation also gets the ball rolling on changes that will better align the enrollment process for the different parts of Medicare. "That includes matching up the standard enrollment periods for Part B (outpatient services), D (prescription drugs) and C (Medicare Advantage), and empowering Medicare to grant special enrollment periods for Part B under "exceptional circumstances," such as natural disasters that might cause people to miss their regular enrollment window.

"This already existed for prescription drug and Advantage enrollment, but it will become available for Part B, too," said Lindsey Copeland, federal policy director at the Medicare Rights Center. (Writing by Mark Miller Editing by Matthew Lewis)