Medicare Late Penalties

Late Penalties for Medicare Part A, B, and D

When you are figuring out how to enroll in Original Medicare, it’s critical to keep a few essential things in mind with regards to the rules and risks that can apply. Original Medicare expenses are certainly enough without additional penalties for enrolling late. Learn how to avoid these fees and penalties and make your Medicare undertaking as easy and pain-free as possible by calling us 920-545-4884 and continue reading our article about Medicare Late Penalties.

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Medicare Part A Penalty

The majority of individuals who are eligible for Original Medicare are entitled to Part A free of charge. This is due to the fact that you or your spouse previously paid your Medicare tax while you were working. This is the FICA tax that was deducted from your paycheck.

If you did not previously work or didn't work long enough to qualify, you will still be eligible for Part A but you will probably have to pay a monthly premium.

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If you did not enroll in or sign up during the course of your Initial Enrollment Period, you will have to pay a late penalty premium for Part A whenever you finally enroll.

The penalty is 10% of the current Part A premium. You will have to continue to pay that penalty for two times the number of years you were eligible for Part A but didn’t enroll.


 

EXAMPLE

If you were eligible for Medicare Part A for three years but failed to enroll, you will have to pay the higher premium for six years. Typically you will not be required to pay a penalty if you meet certain criteria that allow you to enroll in Part A during the special enrollment period.

There is some good news however. If you have limited income, your state may help with paying for Medicare Part A and Part B. You could also qualify for Extra Help in paying for your Part D prescription drug coverage.

The Medicare Part B Penalty

If individuals enroll Original Medicare Part B late, they will have to pay a late penalty every month for the rest of their lives in addition to the  Part B premium. The monthly Part B premium will increase 10% for every full 12-month period that you should have had Medicare Part B but did not enroll. You will pay this increased premium as long as you have got Medicare Part B.

You may not be charged the late fee if you meet the requirements for a Special Enrollment Period. You may possibly qualify for an SEP if you obtained health insurance through your workplace or your spouse’s workplace when you first became eligible to enroll in Part B.

Medicare Part D Penalty

There is also a late penalty for not enrolling in Medicare Part D (prescription drug coverage) when you initially become eligible for Original Medicare. Normally, you are late when you fail to enroll within three months after your Medicare Part A or Part B becomes effective. You will not, however, be required to pay the penalty if you are eligible for the Extra Help.

You also might not be required to pay the penalty if you are qualified for a Special Enrollment Period because you had other prescription drug coverage that is as creditable as Medicare when you turned age 65. Examples of creditable insurance coverage include:

  • You have coverage through your employer or your spouse’s employer or
  • You have retiree coverage or
  • You have coverage through the Veterans Administration

The Part D late penalty is a little more difficult to explain. Medicare.gov explains the penalty as follows:

Medicare Part D Penalty

The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage.

Medicare calculates the penalty by multiplying 1% of the "national base beneficiary premium" ($35.02 in 2018) 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 increase each year, so your penalty amount may also increase each year.

To get a better understand about the substantial Medicare Late Penalties that Original Medicare may impose for late enrollment, or to get a free and confidential quote for an affordable Medicare Supplement Insurance plan (Medigap), call the experts on the Medicare Solutions Team at (920) 545-4884 during normal business hours, or contact us through our website at your convenience.

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