Let’s talk about penalties! Not the kind you get on the soccer field, but the kind that can result from missing Medicare enrollment deadlines.
Typically, you do not have to buy Part A, if you or your spouse has paid Medicare taxes for at least ten years. If you do not qualify for premium free part A, and you don’t buy it when you’re first eligible for Medicare, your monthly premium may increase. Medicare increases your premium by 10% and you must pay a higher premium for twice the number of years you didn’t sign up.
If you did not sign up for Part B when you’re first eligible, your monthly premium may go up 10% for every 12-month period you did not sign up for Part B. It is important to note that you must pay this penalty for as long as you have Part B. The penalty increases the longer you go without Part B coverage.
There are specific situations and conditions that could entitle you to not pay a late enrollment penalty and could allow you to sign up for Part B during a Special Enrollment Period. For questions on this it is best to reach out to a local insurance agent to discuss your specific situation.
Part D is technically optional, however take that lightly. If you later choose to enroll past your initial eligibility date, you will be assessed a lifetime penalty that is applied on top of your monthly premium. Even if you do not take drugs at the time of initial eligibility, joining a Medicare prescription drug plan or a Medicare Advantage Plan with drug coverage will help you avoid a penalty down the road. It is recommended to speak to a Medicare insurance expert to discuss if you have credible coverage in place to avoid the penalty.
The cost of the Part D late enrollment penalties are calculated off of how long you didn’t have creditable prescription drug coverage. For every month that you go without coverage from eligibility you will be assessed a 1% penalty for each month, that is based on the national average of drug plan cost which is currently $33.37 in 2022. For example, if you went a year without drug coverage and later decided to enroll in a plan, you would pay 12% of $33.37 which is about $4.10 on top of your monthly drug plan premium. Once enrolled in Medicare drug coverage, the plan will tell you if you owe a penalty and what your premium will be based on the nearest rounded cent.
Call the Experts
Not one situation is the same. If you are turning 65 or reaching retirement age, work with a local Medicare insurance agent to ensure you do not make a costly mistake. VibrantUSA agents are ready to be your Medicare guide, call us at 866-733-5111.