If you’re new to Medicare and don’t sign up for Part B when you’re first eligible, you’ll have to pay the Medicare Part B late enrollment penalty. You’ll also have to wait until the General Enrollment Period to enroll in Part B coverage. However, if you qualify for a Special Enrollment Period, you won’t have to pay a penalty.
Medicare Part B covers medical expenses like doctors, outpatient procedures, tests and physical therapy. For many people, it pays to enroll in Part B when you are first eligible, during the months surrounding your 65th birthday. If you wait, you may not have medical coverage when you need it. In addition, when you do enroll, you may have to pay a monthly penalty for the rest of your life.
What is 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 Medicare Part B. Here are some examples of the way the penalty works.
- Suppose your IEP ended on November 30th, 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 is the Medicare Part B Penalty Calculated?
The Medicare Part B penalty increases your monthly Part B premium by 10 percent for each full 12-month period you waited before signing up. The penalty is based on the standard Medicare Part B premium, regardless of the premium amount you actually pay. The 2018 Part B premium is $134 per month. This means that a 30 percent penalty would equal $134 x .3, or $40.20 per month, on top of your regular premium.
How to Avoid the Medicare Part B Penalty
If you are turning 65, you can enroll in Part B during an 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 GEP 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.
How to Appeal the Medicare Part B Penalty
If you feel that the Medicare Part B penalty shouldn’t have applied to you or your current situation, ask for a review. Medicare has reconsideration request forms to file an appeal. Unfortunately, you’ll still have to pay the penalty while waiting for your review to be processed.
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. However, 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. You can find information on Medicare SEP rules here.
If you do not enroll during this period, you’ll have to pay a Medicare 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.
Contact Us Today for More Information on all your Medicare Options
The best way to avoid Medicare 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 Medicare Part D coverage. Medicare FAQ can help you through these decisions by answering your questions and giving you quotes from top insurance companies in your area.