If you’re new to Medicare and don’t sign up for Part B when you’re first eligible, you may end up having to pay the Part B late enrollment penalty. The late enrollment penalty is imposed on people who do not sign up for Part B when they’re first eligible. If you have to pay a penalty, you’ll continue paying it every month for as long as you have Part B.
What is the Penalty for Not Taking Medicare Part B at 65
The Part B penalty increases your monthly Part B premium by 10% for each full 12-month period you waited before signing up. The penalty is based on the standard Part B premium, regardless of the premium amount you actually pay.
Here are some examples of the way the penalty works:
- Suppose your IEP ended on November 30, but you waited and signed up on January 25th, during the next open enrollment period. Because you didn’t let a full 12-month period go by, you will not pay a penalty.
- Suppose your IEP ended on December 30, 2013, but you did not sign up for Part B until March 31, 2017. You waited 40 months, or 3 years and 5 months, to enroll. This counts as three full 12-month periods, and you will pay a 30 percent penalty every month.
How Can I Avoid the Medicare Part B Penalty?
If you’re turning 65, you can enroll in Part B during your Initial Enrollment Period. Your IEP begins three months before your birth month and ends three months after your birth month. This means that if your 65th birthday is June 15th, you can enroll between March 1st and September 30th. If you don’t enroll in Part B during your IEP, you usually will have to wait for the General Enrollment Period before you will be allowed to sign up. General Enrollment runs from January 1st to March 31st each year.
If you enroll at this time, your coverage will not start until July 1st. Meaning you may be without insurance if you have a sudden illness or injury. You can also apply for a Medicare Savings Program to avoid the Part B late enrollment penalty.
How to Appeal the Medicare Part B Penalty?
Is there a Cap on the Medicare Part B Penalty?
What if I Don’t Sign Up for Part B because I Have Other Health Insurance?
If you have health insurance through your employer, your spouse’s employer, or a union, you can keep your coverage. You won’t have to pay a penalty for waiting to sign up for Part B. But, if you lose your coverage or stop working for that employer, the clock begins ticking.
Usually, you will be allowed to sign up for Part B right away, during a “Special Enrollment Period.” This is an eight-month period beginning when the employment coverage ends. If you do not enroll during this period, you’ll have to pay a Part B penalty for each full 12 months you wait, beyond the date, the SEP began.
For example, if you’re still working when you turn 65, you can keep your employer health insurance instead of signing up for Part B. If you then retire at age 67, you can avoid a penalty by signing up for Part B during your eight-month SEP. If you instead decide to wait until age 70 to enroll, you will pay a 30% penalty every month. 10% for every 12-month period you delayed.
Get Help with the Medicare Part B Late Enrollment Penalty
The best way to avoid Part B penalties is to plan ahead. You have several Medicare options to choose from, including Original Medicare plus a Medigap Plan. You also have Medicare Advantage and Part D coverage.MedicareFAQ can help you through these decisions by answering your questions and helping you prepare for Medicare. Call the number above or fill out our online rate form to see all the options available in your area.