Medicare late enrollment penalties are the fines imposed on beneficiaries who fail to register when they are first eligible for Medicare. This means people who enroll for Medicare outside their Initial Enrollment Period generally have to pay the late enrollment penalty. There are different late enrollment penalties for the different parts of Medicare.
Most people automatically qualify for Part A once they turn 65 and will not have to worry about the late enrollment penalty. People who have at least 40 quarters of coverage are automatically eligible for premium-free Medicare Part A. However, if you do not meet the requirements needed to qualify automatically, then it is important to ensure that you enroll immediately, you become eligible. If not, you may have to pay the late enrollment fine.
For Medicare Part A, the late enrollment penalty increases the premium by 10%, and in some cases, you will have to pay this increased rate for twice the number of years you were eligible for Part A but failed to enroll.
If you receive Social Security benefits or receive retirement benefits from the Railroad Retirement Board, you may qualify for automatic enrollment for Medicare Part B. If not, then it is important to enroll during your Initial Enrollment Period. If you fail to enroll during this period, you will have to pay the late enrollment penalty for Part B, except in some specific cases.
The Part B penalty lasts for as long as the recipient has the coverage.
You can skip the late enrollment penalties for Medicare Part A and Part B if you qualify for the Special Enrollment Period. Also, to avoid the late enrollment penalties for Part B if you have a group health plan, ensure you enroll for Part A and Part B immediately after your group health coverage ends or you become unemployed.
Unlike Part A and Part B, there is no automatic enrollment for Part D. This means all recipients have to enroll manually. If you fail to enroll during the Initial Enrollment Period and for 63 days after the period is over, you will pay a late enrollment penalty if you do not have a creditable prescription drug plan.
Enrollees do not have to pay the late enrollment penalty for Part D if they qualify for Extra Help.