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.

Health Insurance Marketplace opens on October 1

On October 1, the Health Insurance Marketplace opens for business.

This means that people who up until now could not get affordable health care through their Medicaid, Medicare or their workplace, will be eligible to buy health insurance on their own without any worries of being turned down.The health coverage they purchase through the Marketplace will go into effect on January 1, 2014.

The enrollment period closes after March 31 of 2014 unless there is a major life event like relocation to another state changes to one's income or changes in family status. There will be a penalty for failing to have any kind of health insurance in 2014. The penalty in 2014 will be $95 per adult or 1 percent of adjusted family income, whichever is higher. The penalty will increase to $695 or 2.5% of income in 2017. 

People enrolling will have a choice of four levels of insurance:  platinum, gold, silver and bronze. Platinum will have the highest premium but the lowest out-of-pocket expenses. Bronze will come with the lowest monthly cost but the highest possible out-of-pocket costs. 

Remember, the new Health Insurance Marketplace does not affect Medicare or those on Medicare. The Marketplace is specifically for people who do not have affordable health insurance or cannot be covered by Medicare or Medicaid.

I will be posting regular updates on this topic. Please send me your questions and I'll do my best to answer them here. Send them to lmutsko@mutskoinsurance.com.

Medicare will NOT be affected by the Health Care Marketplace

The massive advertising campaign directing consumers to sign up for the new Health Care Exchanges, often referred to as “Obamacare,”  has confused many Medicare recipients. Here’s the bottom line . . .

People on Medicare do NOT need to do anything with the Marketplace during Open Enrollment. The Health Insurance Marketplace that starts in October, 2014 is designed to help people who don’t have any health coverage.

Medicare benefits are not changing under the Health Care Marketplace. Medicare’s Open Enrollment isn’t part of the Marketplace.

Julie Bataille, spokeswoman for the Centers for Medicare and Medicaid Services said, “We want to reassure Medicare beneficiaries that they are already covered, their benefits aren’t changing and the Marketplace doesn’t require them to do anything different.”

Medicare and the Health Care Marketplace

Seniors are asking some good questions about the new Health Care Marketplace and how it will impact them. The questions I hear most often are:

“Do we have to sign up like some people are saying?”
and
“Does the new program change my Medicare or my Medicare Advantage plan?

Frankly, the government hasn’t been very clear about seniors and the new national health care program. This is because the Health Care Marketplace will not influence how people age 65 and older and younger people with disabilities already on Medicare access health care.

“We want to reassure Medicare beneficiaries that they are already covered, their benefits are not changing and the marketplace doesn’t require them to do anything,” said Michele Patrick, Medicare’s Deputy Director for Communications.

Medicare beneficiaries will still have some decisions to make this fall. You should review your Annual Notice of Change information when you receive it this month. Seniors can change to a Medicare Advantage Plan, change their current plan, choose a Prescription Drug plan or buy supplemental Medigap plan during the Annual Open Enrollment Period between October 15 and December 7.

If you have questions on any of this, please contact me at 440-255-5700 or 888-951-6201