How to avoid paying Medicare late enrollment penalties

Medicare late enrollment penalties can catch some people unaware. Sometimes people simply forget to enroll during their Initial Enrollment Period. Sometimes people opt to delay thinking they will qualify for a Special Enrollment Period because they’re still working past 65 but then end up not having creditable coverage or not qualifying for a Special Enrollment Period after all.

 Because a person could face late enrollment penalties for Medicare Part A, Part B and Part D, it’s important to be aware of how to avoid these costly premium penalties. First though, let’s quickly look at which parts of Medicare have late enrollment penalties.

Medicare Part A, Part B and Part D can have late enrollment penalties for premiums. If you are late to enroll and don’t qualify for a Special Enrollment Period, you could pay any or all of these premiums depending on what kind of coverage you choose and when you sign up.  See below for a quick overview on each penalty and see examples.

• If you have to pay a premium, the penalty is 10%

• Charged for twice the number of years you delay enrollment

• The penalty for Part B is 10% for each 12-month period you delay enrollment

• You have to pay the penalty every month for as long as you have Part B in most cases

• If you’re under 65 and disabled, the penalty ends once you turn 65 as you’ll have another Initial Enrollment Period based on your age 

• The penalty is 1% of the average Part D premium for each month you delay enrollment

• You pay the penalty for as long as you’re enrolled in Part D

It’s important to do your best to avoid paying Medicare late enrollment penalties. Here are some tips.

1.  Make sure to enroll during your Initial Enrollment Period when first eligible.
2. If you qualify for a Special Enrollment Period, make sure your employer coverage is considered creditable for both Parts B and Part D
3. Get written coverage to provide proof you have creditable prescription drug coverage.
4. Make sure you enroll in Part D within the first 2 months of your Special Enrollment Period if you are qualified for one.

If you’re unsure whether or not you may need to enroll immediately when you turn 65 or if you can delay, it’s always best to talk with Medicare directly.