How to Avoid Medicare Late Enrollment Penalties
Protect Yourself from Medicare Part A Penalty Fees
Medicare enrollment can be confusing, and missing deadlines can mean paying penalties — sometimes for life. However, you can protect yourself from Medicare penalties with a little planning.
Most people get Part A for free but if you or your spouse have not worked enough, you will pay a premium and a late penalty if you enroll late.
The penalty: 10% of your premium, paid for twice the number of years you delayed. For example, if you enroll one year late, you’ll pay the penalty for two years.
Avoid it: Enroll during your seven-month Initial Enrollment Period (IEP). The IEP begins three months before your 65th birthday and ends three months after. You can check your enrollment status online or with Social Security.
Cost of Medicare Part B penalties
The cost of late enrollment fees in Medicare Part B affects you for as long as you have Medicare. If you miss your IEP and don’t qualify for a Special Enrollment Period (SEP) (such as switching from employer coverage), a penalty permanently increases the monthly premium.
The penalty: 10% extra for every year you delay.
Avoid it: If you don’t have qualifying coverage elsewhere, sign up for Medicare Parts A & B or enroll in a Medicare Advantage plan as soon as you are eligible. Find out if you qualify for a SEP.
Medicare Part D late enrollment penalty
If you skip enrollment in Medicare Part D, it can mean paying more for prescription medications later.
The penalty: A percentage-based increase for every month you go without coverage is added to your premium for as long as you have Part D.
Avoid it: Enroll in Medicare Part D when you are first eligible or ensure you have creditable drug coverage with no gap over 63 days.
Medicare Advantage and Medigap penalties
Medicare Advantage plans do not carry late enrollment penalties. However, you must first enroll in Parts A and B to be eligible for a Medicare Advantage plan. Medicare Supplement, or Medigap, plans do not charge late enrollment penalties.
What’s the point of Medicare penalties?
Penalties help keep Medicare stable by encouraging continuous enrollment. Costs would significantly rise for everyone if people only joined when they needed care.
Enroll now
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