Beware Medicare Penalties for Late Enrollment

Chances are good that you’ve never heard of Medicare late-enrollment penalties, even if you’re eligible or soon will be for the federal health care insurance program for seniors age 65 and older. But failing to sign up for Medicare when you first become eligible can cost you.

One possible penalty is tied to waiting too long to sign up for Medicare Part B, which provides medical insurance coverage. This fee is tacked on to your monthly premiums. So, if you incur the penalty, you will generally end up paying it for as long as you have Medicare.

Legislation proposed in Congress this year could prevent Medicare-eligible Americans from being surprised by Medicare penalties. Retirement columnist Mark Miller recently reported in Reuters that the bill would require the government to send letters to people the year before they turn 65, notifying them of when they will first become eligible to sign up for Medicare.

The bill primarily addresses the late-enrollment penalty for Part B. This fee can increase your Part B premium by up to 10 percent for every full 12-month period that you delayed signing up.

Until it becomes law that the government must give folks a heads-up about such fees, however, you’re on your own. That means you must learn about and watch out for Medicare’s multiple late-enrollment penalties.

Perhaps start by figuring out when you first became or will become eligible to sign up for Medicare using Medicare.gov’s eligibility calculator. You can also learn more about how to get personalized help with Medicare by clicking on “Medicare Assistance” in Money Talks News’ Solutions Center.

How to avoid a Part B fee

Some folks are automatically enrolled in Medicare Part B, generally depending on when they claim Social Security benefits. People who are automatically enrolled in Part B do not need to sign up for Part B or worry about incurring late-enrollment penalties.

According to Medicare.gov, people who receive benefits from Social Security or the Railroad Retirement Board at least four months before they turn 65 will usually be automatically enrolled in Part B in the month they turn 65.

If that situation does not apply to you, make sure you sign up for Part B when you are first eligible for it so you avoid the penalty.

Other types of Medicare penalties

There is a late enrollment penalty for Medicare Part D, which provides prescription drug coverage. We recently detailed Part D coverage itself and the Part D penalty in “7 Things You Should Know About Medicare.”

There is also a late enrollment penalty for Medicare Part A, which provides hospitalization insurance coverage. But this penalty only applies to folks who must pay a premium for Part A, which is a minority of folks. According to Medicare.gov, most people get premium-free Part A.

To learn more about the Part A fee, check out Medicare.gov’s “Part A late enrollment penalty” page.

Were you aware that you could be charged a fee for not signing up for Medicare on time? Let us know by commenting below or on Facebook.