Late Enrollment Penalties on the Different Parts of Medicare

The Medicare Initial Enrollment Period is a seven-month period that typically begins three months before the month you turn 65, includes the month you turn 65 and ends three months after the month you turn 65. Unless you qualify for a Special Enrollment Period, missing your Initial Enrollment Period can cost you in late enrollment penalties. Let’s take a look at what these penalties mean for each part of Medicare. 

Medicare Late Enrollment Penalties

  • Part A. Medicare Part A is generally premium-free, but if you do have to pay a premium, the late enrollment penalty is 10 percent. You have to pay this monthly 10-percent premium increase for twice the number of years you didn’t sign up for Medicare. For example, if you were eligible for Medicare Part A for one year but didn’t sign up, you’ll pay the higher premium for two years. 
  • Part B. The late enrollment penalty for Medicare Part B is a 10-percent monthly increase for each 12-month period you could have been enrolled. In most cases, you’ll have to pay this penalty every time you pay your premium for as long as you have Part B. For example, if you wait 24 months to sign up for Part B, your premium will be 20 percent higher than the standard premium, and you will pay this penalty for as long as you have Part B coverage. 
  • Part C. Medicare Part C Medicare Advantage, has no late enrollment penalty fees, if the Medicare Advantage plan’s coverage does not include Medicare Part D coverage. 
  • Part D. The Medicare Part D late enrollment penalty is a fee that is permanently added to your Part D premium and requires some math to figure out. Medicare calculates this late enrollment penalty by multiplying one percent of the “national base beneficiary premium” ($33.06 in 2021) by the number of full, uncovered months you didn’t have Part D coverage. The monthly premium is then rounded to the nearest $.10 and added to your Part D premium.

For more information on late enrollment penalties and how to avoid them, contact Crumes Insurance today. We’ll make sure you’re signed up for everything you need during your Initial Enrollment Period or verify you qualify for a Special Enrollment Period.

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