Medicare Late Enrollment Premium Penalties

It pays to enroll on time. 

When you become eligible for Medicare, it is important for you to sign up for Part A, Part B and Part D during your Initial Enrollment Period or you may be subject to penalties. 

Medicare Made Clear explains the penalties as follows:

“Part A Enrollment Penalties

Most people are eligible for Medicare Part A, Part B and Part D at age 65. Coverage for Part A is usually available without having to pay a monthly premium as long as you or your spouse worked and paid taxes for ten years. If you aren’t eligible for premium-free Part A, then it’s especially important to sign up during your initial enrollment period to avoid a possible 10% penalty on top of your monthly premium. You would have to pay the higher premium for twice the number of years you were eligible for Part A, but didn’t sign up for it.

Part B Enrollment Penalties

Part B charges a monthly premium. The amount that you pay is based on your income and tax-filing status. You will need to sign up when you are first eligible to avoid an additional 10% of your Part B premium for every 12-month period you were eligible for Part B, but didn’t sign up for it. Usually, you will have to pay the monthly penalty for as long as you have Part B coverage. You can delay enrollment in Part B without penalty if you quality for a Special Enrollment Period (SEP).

Part D Enrollment Penalties

One way to avoid having to pay Part D penalties is to sign up for a Part D drug plan as soon as you become eligible. Or, you can delay enrolling in Medicare Part D without penalty, but only if you have had other prescription drug coverage at least as good as Medicare. This is known as credible coverage. If it’s been more than 63 days since you’ve had creditable coverage, then the penalty may apply. For each month you delay, you may have to pay an additional 1% of the average premium per month. You will pay that penalty for as long as you’re enrolled in a Medicare Part D plan.”

If you don’t sign up for Part A and or Part B (for which you must pay premiums) when you are first eligible, you can sign up between January 1–March 31 each year. Your coverage will begin July 1. You may have to pay a higher Part A and/or Part B premium for late enrollment.”

If you have questions about enrolling, give me a call at 440-255-5700 or email me at lmutsko@mutskoinsurance.com and ask me about timely enrollment and how it can save you a lot of money at a later time.