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Understanding Medicare’s Late Enrollment Penalty

It’s good to keep some key things in mind as you learn about enrollment and understanding rules and risks. Medicare costs are high enough without adding any additional penalty fees. Learn to make your experience with Medicare as pain free as possible and avoid additional fees.

Medicare Part A – Penalty

Most people that are eligible for free Medicare Part A are due to you or your spouse paying the Medicare tax while stile working. You see this on your paycheck as the FICA deduction. I you didn’t work or work for a long enough period; Part A is available if you pay a premium.

Late penalty premiums are applied if you do not get enrolled automatically or sign up during the period for your Initial Enrollment. You then pay a penalty later when you sign up.

Whether you’re entitled to Medicare Part A or not, enrollment periods and or premium penalties are the same.

The Part A penalty premium will be 10% of the Part A premium that is current. This is paid continuously for 2 time the number of years you didn’t pay while being eligible for Part A.

Medicare Part B – Penalty

Late sign up for your Medicare – Part B will cause you to pay a monthly penalty premium for late signup. This will be paid for the “remainder of your life.” This is in addition to your Part B premium. Part B monthly premium goes up 10% for each 12-month period that you did not take Part B when you could have. As long as you have Medicare Part B you will have to pay this.

“You may avoid paying penalties” – Qualifying for a (SEP) Special Enrollment Period may allow you to avoid paying penalties. If you had a job that provided health insurance or a spouse’s job during the time you were initially eligible for Medicare “Part B.”

Medicare Part D – Penalty

Late sign up for your Medicare – Part D will cause you to pay a monthly penalty premium for late signup. This is typically when not joining Part D during the 3 months after Medicare Part A and or Medicare Part B become effective.

If your eligible for any extra help with your costs you don’t have to pay a penalty. Qualifying for a (SEP) Special Enrollment Period may allow you to avoid paying penalties. Such as having credible drug coverage at the time you turn 65 which is as good as what Medicare coverage offers.

Credible coverage examples include:

  • Health coverage obtained through you or your spouse’s job
  • Retiree health coverage
  • Health coverage obtain through Veterans Administration

Penalty premiums are added onto your regular premium paid to your Medicare drug plan. This fee is then calculated; 1% of the average monthly premium for your prescriptions drug plan. This multiplied times the number of months that you were late. Then this number is rounded out to the nearest $.0.10. This paid as long as you have a Medicare Prescriptions Drug Coverage plan.