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How To Avoid Paying Medicare Late Enrollment Penalties.

A Lot of people are caught off guard when it comes to Medicare late enrollment penalties. It is crucial to know how you can avoid them. People may simply forget to enroll during their initial enrollment period, or some of the time people delay enrollment thinking that they get a Special Enrollment Period because they’re working past the age of 65. For many of these individuals, their “creditable coverage” has ended and they no longer qualify for the Special Enrollment Period at all.

You can face late enrollment penalties for Medicare Part A, Part B and Part D so it's critically important to know how to avoid them. But first it’s important to know what parts of Medicare have late enrollment penalties.

Parts of Medicare with Late Enrollment Penalties.

Medicare Part A, Part B, and Part D can have late enrollment penalties for premiums. If you are late to enroll and haven’t qualified for a Special Enrollment Period, you could be held responsible for paying any or all of these premiums. The penalties will be dependent upon the type of coverage you choose and the date at which you signed up.

Medicare Part A Premium Penalty.

  • If you have a Medicare Part A premium the penalty is 10%.

  • You’ll have to pay the penalty for twice the number of years you delay enrollment.

  • Because most people are not required to pay a Part A premium, this penalty rarely applies.

Medicare Part B Premium Penalty.

  • The penalty for Medicare Part B is 10% for each 12 month period you delay enrollment.

  • In most cases, you are responsible for paying the penalty every month for as long as you have Medicare Part B.

  • However, if you are under 65 and disabled, the penalty ends once you turn 65. This scenario happens because you are, at the age of 65, provided with another Initial Enrollment Period.

Medicare Part D Premium Penalty.

  • Medicare calculates the penalty by multiplying 1% of the "national base beneficiary premium" ($32.74 in 2020, $33.06 in 2021) times the number of full, uncovered months you didn't have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium.

  • The national base beneficiary premium may change each year, so your penalty amount may also change each year.

Avoid Paying Late Enrollment Penalties.

Now that you know what types of late enrollment penalties can be enforced on you, it’s time to have a look at what can be done in order to avoid paying these penalties.

  • Make sure you enroll during your Initial Enrollment Period.

  • If you delay enrollment because you still have employer coverage, and will qualify for a Special Enrollment Period, make sure that your employer coverage is considered “creditable” for both Medicare Part B and Part D.

  • Make sure that your enrollment in Part D is within the first 2 months of your Special Enrollment Period, if you have qualified for one.

  • If you have other “creditable coverage” for prescription drugs, get it in writing to provide as a proof. You will need that to validate your Special Enrollment Period once you enroll in Part D at a later date.

Still not sure if you can be penalized for late enrollment?

Although information regarding late Medicare enrollment is available online, it can be confusing based on your individual situation. It is best to talk to an experienced health insurance agent that specializes in Medicare insurance. If you’re looking for more information regarding late Medicare enrollment, then please feel welcomed to contact us.

We work as Independent Insurance Brokers, and have been appointed by many of the major insurance carriers. We can help you find the best policy for your individual situation. We work with clients in Winchester, VA, Martinsburg, WV, and Charles Town, WV.

For more details, please feel welcomed to contact us today at (540) 662-4432, and talk to one of our Insurance agents or simply visit our website to obtain more information.

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