Medicare is highly cost-effective, but it becomes less so when you delay enrollment. It’s critical to join as soon as possible, as you may end up paying extra fees for as long as you have your Medicare plan.
How Do Late Enrollment Penalties Work?
When late enrollment penalties begin to accrue and how they affect your premiums depends on the specific plan you enroll in and what your circumstances are.
For the majority, late enrollment fees start building after the Initial Enrollment Period passes. This lasts from the three months before you turn 65 to three months after the month you turn 65. You can join any Medicare plan at this time.
After the Initial Enrollment Period ends, you’ll have to wait until the General Enrollment Period, which starts on January 1 and ends on March 31. You can only join Medicare Part A and Part B at this time.
For Part A, you pay an extra 10% on your premiums. You’ll pay this for twice the number of years you waited to join Medicare.
The Part B penalty is permanent, and it accrues an additional 10% per year you wait.
After you enroll in Medicare during General Enrollment, you can join Part D during the Special Enrollment Period that lasts from April to June. Its late enrollment penalty is permanent and gains an extra 1% for every month you wait to join. This is multiplied by the national base beneficiary premium ($33.37), rounded to the nearest $0.10, and is then added to your current premium.
Can I Delay Without Penalty?
You may be able to delay Medicare enrollment if you already have health coverage through your employer or spouse’s employer. If you lose that coverage, you have eight months to join Part B without penalty.
You can delay Part D enrollment if you already have creditable drug coverage (coverage that is comparable to Part D in costs and benefits). If you lose that coverage, you have 63 days within which you can join a Medicare drug plan.
How Can I Avoid Late Enrollment Fees?
The best way to avoid these penalties is to join once you’re eligible, even if you already have employer coverage. In fact, having Medicare in addition to employer coverage can dramatically lower your out-of-pocket costs because of how these two types of coverage coordinate with each other.
If you want to delay without penalty, it’s best to check with your benefits coordinator before delaying enrollment.
Need Help Enrolling? Give Us A Call
At Turning 65 Solutions, we will walk you through all your Medicare enrollment options so you know when the best time to enroll is. Give us a call today for more information about getting your Medicare enrollment started!