Posted on November 12, 2021 by Kyle Walton
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Posted on November 12, 2021 by Kyle Walton
As a government-regulated health insurance program that helps millions of Americans per year, it should come as no real surprise that there are strict rules one must follow in order to take advantage of this concept. One of them is adhering to proper enrollment period requirements.
If you choose not to enroll in Medicare by your Initial Enrollment Period (IEP) Medicare deadline, there is a possibility that you could face higher premiums, and a fee known as the Medicare late enrollment penalty.
Before you decide whether to enroll in Medicare, it is important for you to carefully weigh all the pros and cons of your ultimate decision and the potential benefits and drawbacks of doing so.
In many circumstances, choosing not to enroll in Medicare when you first become eligible for the program could cost you. That said, each different part of Medicare has slightly different rules.
Let’s explore potential penalties of delaying Medicare enrollment under its various parts, and further explore how you may go about avoiding them.
If you decide to continue working after the age of 65, Medicare strongly recommends that you still opt into Medicare Part A coverage. So long as you or your spouse has paid Medicare taxes for at least 40 quarters, you will not even have to worry about paying a monthly premium for Part A.
Most people who are eligible for Medicare but have not paid Medicare taxes for at least 40 quarters can avoid penalties by enrolling in Part A right away. Should you choose not to enroll during your IEP and you or your spouse have not paid Medicare taxes for at least 40 quarters, you may face a 10 percent premium increase for double the number of months you were eligible, but avoided enrolling in coverage.
Penalties for delaying Medicare Part B enrollment are much more common than they are for Medicare Part A. If you fail to sign up for Medicare Part B in time, you will be required to pay 10 percent more on top of your monthly Part B premium for every 12 months that you went without coverage and were eligible for it. Unfortunately, this premium will last throughout the lifetime of your coverage, and can continue to increase the longer you go without coverage.
That said, you can avoid Medicare Part B late enrollment penalties if you meet certain conditions that may allow you to enroll in Part B during a Special Enrollment Period (SEP), such as income limitations, relocation, or the loss of coverage due to spousal death, employment termination, or a change in medical care requirements.
While Medicare Part D: Prescription Drug Coverage is an optional form of Medicare health insurance coverage, you could still face higher premiums in the future if you choose to defer enrollment in Part D during your IEP but decide to enroll later.
Medicare Part D late enrollment penalties are equal to 1 percent of your premium for every month you are eligible for enrollment but choose to delay it. If your eligibility status occurs as a result of a disability and you choose not to enroll, you will also be subject to this penalty.
There are three primary ways to avoid the Medicare Part D late enrollment penalty, including:
If you have recently missed your Medicare Initial Enrollment Period deadline, you can still sign up for Medicare at a few other times over the course of a calendar year. The first is the Open Enrollment Period (OEP), which begins on January 1st and runs through March 31st at the start of each year.
The second is the Annual Enrollment Period (AEP), which takes place between October 15th and December 7th and is happening right now.
The third is a Special Enrollment Period, which was mentioned above and can be utilized in the event that you encounter certain qualifying life events, such as a recent disability diagnosis, a change in your employment status and subsequent creditable employer group coverage eligibility, relocation to another state, a change in citizenship status, and more.
If you are interested in learning more about your Medicare or Medicare SEP eligibility status, you can contact the licensed insurance agents at MedicareInsurance.com today for additional information. We are always more than happy to help!