A Late Enrollment Penalty
You’d only be subject to a Part A late enrollment penalty if you’re not eligible for premium-free Part A coverage. Most Americans don’t have to worry about this, as they have at least ten years of work history, or are/were married to someone who does. But if you’d have to pay a premium to buy Part A coverage, there’s a penalty if you delay your enrollment.
The penalty is a 10% increase in your monthly premium. In 2020, the Part A premium is $458/month for people with 0-29 quarters of work history, and $252/month for people with 30-39 quarters of work history. So those premium amounts would increase to $504/month and $277/month, respectively, if you’re subject to the late enrollment penalty.
But unlike the penalties for Part B and Part D, the penalty for late enrollment in Part A does not last forever. Instead, you’d pay it for twice as long as the amount of time you delayed your enrollment. So if you were eligible for Medicare for three years before enrolling, you’d have to pay the extra Part A premiums for six years. Keep in mind that the Part A premium changes each year , so the actual amount you’d be paying would vary for each of those six years.
Example : You Are Contributing To Your Group Health Insurance Plan
In almost all cases, you can save money by switching to Medicare with a Medigap plan if youâre the one contributing to your group health insurance plan.
Health insurance premiums are sky-high, with some plans costing upwards of $800 per month. Medicareâs monthly premium is nowhere close to that, and you can even add on a Medicare Supplement with no chance of reaching that kind of premium.
In sum, you can have much better coverage for a fraction of the cost if youâre paying for your group health insurance and are over 65.
If youâd like a Medicare specialist to help you one-on-one, schedule a free Medicare planner with one of our licensed agents.
What If Your Medicare Card Didnt Arrive
If youre expecting to receive a Medicare card but havent yet received one three months before your 65th birthday, the first thing to do is to not worry. Medicare sends out hundreds of thousands of cards per year without issue. Its possible for the card to be delayed or for there to be an error. To confirm whether a Medicare card is heading your way, check with your local Social Security office to make sure that youre enrolled.
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What Else Do I Need To Know
- Medicare can help cover your costs for health care, like hospital visits and doctors services.
- Most people dont pay a premium for Part A, but you do pay a monthly premium for Part B.
- If you cant afford the monthly premium, there are programs to help lower your costs. Get details about cost saving programs.
What Should You Do Once You Get Medicare
Although you can rely on Original Medicare alone, 86% of Medicare enrollees also have some type of additional coverage.2 It can be from an employer, a privately-purchased plan or from a government-run program like Medicaid. Original Medicare pays for a great deal of healthcare, but still leaves you with potentially costly gaps in healthcare coverage. Supplementary plans can cover these gaps including deductibles and copayments at a fraction of the out-of-pocket rate.
MedicareGuide.coms plan selector is designed to intelligently bring you the best Medicare Supplement plans. These plans, also known as Medigap policies, fill the gaps in coverage that you would otherwise be charged by Original Medicare.
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Turning 65 What You Need To Know About Signing Up For Medicare
The first of the 78 million baby boomers turned 65 on January 1, 2011, and some 10,000 boomers a day will reportedly reach that milestone between now and 2030. If you are about to turn 65, then it is time to think about Medicare. You become eligible for Medicare at age 65, and delaying your enrollment can result in penalties, so it is important to act right away.
There are a number of different options to consider when signing up for Medicare. Medicare consists of four major programs: Part A covers hospital stays, Part B covers physician fees, Part C permits Medicare beneficiaries to receive their medical care from among a number of delivery options, and Part D covers prescription medications. In addition, Medigap policies offer additional coverage to individuals enrolled in Parts A and B.
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Medicare enrollment begins three months before your 65th birthday and continues for 7 months. If you are currently receiving Social Security benefits, you don’t need to do anything. You will be automatically enrolled in Medicare Parts A and B effective the month you turn 65. If you do not receive Social Security benefits, then you will need to sign up for Medicare by calling the Social Security Administration at 800-772-1213 or online at . It is best to do it as early as possible so your coverage begins as soon as you turn 65.
Sign Up: Within 8 Months After The Active Duty Service Member Retires
- Most people dont have to pay a premium for Part A . So, you might want to sign up for Part A when you turn 65, even if the active duty service member is still working.
- Youll pay a monthly premium for Part B , so you might want to wait to sign up for Part B.
Avoid the penalty & gap in coverageIf you miss this 8-month Special Enrollment Period, youll have to wait to sign up and go months without coverage. You might also pay a monthly penalty for as long as you have Part B. The penalty goes up the longer you wait to sign up. How much is the Part B late enrollment penalty?
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Why You May Consider Signing Up For Medicare At 65
If youre approaching age 65 and any of the following situations apply to you, then you need to enroll during what’s known as your Medicare Initial Enrollment Period .
If you dont enroll during your IEP, you could face financial premium penalties for enrolling late.
Your IEP is a 7-month window that generally includes the month of your 65thbirthday, the 3 months before and the 3 months after For example, if your 65thbirthday is on June 20, then your IEP starts on March 1 and ends on September 30.
This is the time to learn about yourMedicare coverage options and get what you do or dont need coverage for. Most who have to get Medicare at age 65 will get Part A , Part B and some form of prescription drug coverage through either a stand-alone Part D plan or a Medicare Advantage plan.
Here are some helpful resources to learn how to avoid the Part B and Part D late penalties:
Some Retiree Health Plans Terminate At Age 65
If you’re not yet 65 but are retired and receiving retiree health benefits from your former employer, make sure you’re aware of the employer’s rules regarding Medicare. Some employers don’t continue to offer retiree health coverage for former employees once they turn 65, opting instead for retirees to transition to being covered solely by Medicare. Without coverage from your company, you’ll need Medicare to ensure that you are covered for potential health issues that arise as you age.
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Do You Have To Be On Medicare At 65
When you turn 65 years old, youâre eligible to sign up for Medicare.
Original Medicare is made up of 2 main parts: Part A and Part B .
As long as youâve worked at least 10 years and paid Medicare taxes, Medicare Part A is actually free to have, meaning that you donât have a monthly premium to pay. Thereâs really no downside to having Part A when you turn 65.
Do you have to have Part A when you turn 65? No. Is there any downside to having Part A when you turn 65? No. Thatâs why you donât actually have to sign up for Part A.
Three months before you turn 65, youâll be mailed your Medicare card, and youâre automatically enrolled in Part A. Youâll also be automatically enrolled in Part B unless you send the card back explaining that you donât want it.
Which brings us to our next question â is Medicare Part B mandatory at age 65?
Our team of licensed agents can help you determine which route would save you the most money, so if youâre not sure, be assured that we can help. Call us any time at 833-801-7999.
When Should I Sign Up For Medicare
Generally, we advise people to file for Medicare benefits 3 months before age 65. Remember, Medicare benefits can begin no earlier than age 65. If you are already receiving Social Security, you will automatically be enrolled in Medicare Parts A and B without an additional application. However, because you must pay a premium for Part B coverage, you have the option of turning it down. You will receive a Medicare card about two months before age 65. If you would like to file for Medicare only, you can apply by calling 1-800-772-1213. Our representatives there can make an appointment for you at any convenient Social Security office and advise you what to bring with you. When you apply for Medicare, we often also take an application for monthly benefits. You can apply for retirement benefits online.
If you didnt sign up when you were first eligible for Medicare, you can sign up during the General Enrollment Period between January 1 and March 31 each year, unless you are eligible for a Special Enrollment Period.
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Can You Get Private Insurance Instead Of Medicare
If you have Medicare Part A or Part B, insurers generally arent allowed to sell you a traditional individual health insurance plan .
You can purchase individual health insurance if youve never enrolled in Medicare because you think the overall costs are too high. If youre in the unusual situation of paying for Part A premiums, you can also switch to individual health insurance.
If you develop a medical condition before turning 65 that would qualify you for Medicare, such as ESRD, you can decline to purchase Medicare.
If you decide to purchase private insurance once youre eligible for Medicare unless youre continuing the employer-sponsored insurance that qualifies you for a Special Enrollment Period then youll have to pay the costly late enrollment penalty once you do apply.
If youre nearing the age of 65, then its important you start considering your Medicare coverage.
I Am Turning 65 Next Year When Can I Sign Up For Medicare
If you are eligible for Medicare, your initial enrollment period for Part A and Part B begins three months before the month of your 65th birthday and ends three months after it. For example, if your 65th birthday is in June, your enrollment period will extend from March 1 through September 30. If you join during one of the 3 months before you turn 65, coverage will begin the first day of the month you turn 65. If you join during the month you turn 65, your coverage will begin the first day of the month after you turn 65. If you join in the month after you turn 65, coverage will begin 2 months later, and if you join 2 or 3 months after you turn 65, coverage will begin 3 months later. A recent change in law limits these gaps in coverage. Starting in 2023, if you enroll in Medicare during the first 3 months after your turn 65, coverage will begin the first day of the month following the month you enroll.
Once you have Part A and Part B, you are then also eligible to enroll in a Medicare Advantage plan and/or a Part D plan. If you are already receiving Social Security benefits when you turn 65, you will automatically be enrolled in Part A and Part B. If you are not already receiving Social Security benefits and you want to enroll in Medicare, you should contact Social Security.
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Ask These Questions Before You Delay Medicare
Whether or not you can delay Medicare past 65 when youre working really depends on a few simple questions.
If you can answer Yes! to all the above, you likely qualify for a Medicare Special Enrollment Period and can delay enrolling without penalty. Whats the next step?and information sent directly to your inbox.
You’re Retired But Are Still Covered Under Your Spouse’s Group Health Plan
The penalties that come with not enrolling in Medicare on time only apply if you don’t have access to an eligible group health plan. It may be the case that you’re retired and don’t have employer benefits at all. But if you’re married to someone who’s still working and are on your spouse’s group health plan, the same rules apply — as long as that plan covers 20 people or more, you don’t have to worry about penalties for delaying Medicare.
Of course, if you’re not happy with your spouse’s group health plan — say, you’re being charged a lot to stay on it — then it could pay to look into Medicare. But if your costs under that plan are reasonable and you’re happy with its scope of coverage, then there’s no reason to make changes to your health insurance until your spouse retires and that group coverage goes away.
Medicare may end up being more flexible than you’d expect, at least when it comes to enrollment. Though age 65 is when Medicare coverage begins, if either of these situations applies to you, you may not want to enroll right away.
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How Does Medicare Work With My Job
Keep in mind that:
- Most people qualify to get Part A without paying a monthly premium. If you qualify, you can sign up for Part A coverage starting 3 months before you turn 65 and any time after you turn 65 Part A coverage starts up to 6 months back from when you sign up or apply to get benefits from Social Security .
- If you have a Health Savings Account, you and your employer should stop contributing to it 6 months before you sign up for Part A to avoid a tax penalty.
Can I Avoid Penalties
There are some special circumstances in which you can sign up late for Medicare without paying penalties. After the initial enrollment period, you can sign up for optional programs during special enrollment periods.
If you or your spouse continued working past your 65th birthday and had health insurance through your employer, you wont have to pay a penalty for late enrollment in any of the Medicare programs.
Beginning the month after you end your employment, or when your group health plan insurance from that employment ends, you have an 8-month window to sign up for Medicare parts A and B without penalty.
COBRA and retiree health plans are not considered as coverage under current employment and do not qualify you for a special enrollment period or save you from late enrollment penalties.
You can also qualify for a special enrollment period for Medicare parts A and B and avoid late enrollment penalties if you were volunteering in a foreign country during your initial enrollment period.
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Act Quickly If You Want A Medicare Advantage Or Part D Plan When You Retire
When you work past 65 and qualify for a Special Enrollment Period, there is one tricky thing to note about this time period. The Special Enrollment Period lasts 8 months, but you only get the first two months to enroll in a Medicare Advantage or Part D plan.
Many people get tripped up by this because they do get the full 8 months to get Part A and Part B. And this is even trickier when you consider that you need both Parts A and B to get a Medicare Advantage plan, and either Part A or Part B to get a Part D stand-alone plan.
TIP: Enroll in everything you want and need within the first two months of your Special Enrollment Period to ensure you dont accidently get hit with financial penalties for Part D.
Another good reason to enroll in the first two months is that it can take some time for plans to process your application. Make your decisions and enroll early to avoid a lapse in coverage.
Having Creditable Drug Coverage
Before you officially delay Medicare, make sure you have creditable drug coverage. This means your employer drug coverage is at least as good as the standard Medicare Part D plan coverage. If your employer’s drug coverage isn’t creditable, you will need to enroll in a Part D plan during your Initial Enrollment Period to avoid the Part D late enrollment penalty . Consequently, you’ll also need to get either Part A or Part B in order to get a Part D plan.
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