If you are newly eligible for Medicare you can sign up for Medicare Part B during your Initial Enrollment Period. For example, if you’re eligible when you turn 65, you can sign up during the 7-month period that begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.
If you didn’t sign up for Medicare Part B during your Initial Enrollment Period, you can sign up during the General Enrollment Period which is between January 1 and March 31 each year. Your coverage will begin July 1. You may have to pay a higher premium for late enrollment.
Medicare Part B Premium Payment Penalty
If you don’t sign up for Medicare Part B when you’re first eligible, you may have to pay a penalty to get it later. For each 12-month period you delay enrollment in Medicare Part B, you will have to pay an extra 10% of the Medicare Part B premium, unless you qualify for a Special Enrollment Period (SEP). In most cases, you will have to pay that penalty every month for as long as you have Medicare Part B. If you’re enrolled in Medicare Part B because you’re disabled and you’re paying a premium penalty, you no longer have to pay this penalty once you turn 65.
The premium penalty is quite complicated and is facts and circumstances driven. Therefore, you should review your own personal situation and get help. (Contact the Social Security Administration: Go to its website at https://www.ssa.gov/ or call 1-800-772-1213.)
To give you a flavor for the rules, let’s look at a simple example with simple assumptions. Let’s say you turned 65 in 2008, and you delayed signing up for Medicare Part B until 2013. Your monthly premium would be 50 percent higher for as long as you have Medicare (5 full years x 10 percent). Since the Medicare Part B standard premium in 2013 is $104.90, your monthly premium with the penalty would be $157.35 ($104.90 x 0.5 + $104.90). Your Part B premium amount is based on your income and the penalty is calculated based on the standard Part B premium. The penalty is then added to your actual premium amount.
If you are age 65 or older and your medical insurance coverage is under a group health plan based on you, or your spouse’s current employment, you may not need to apply for Medicare Part B at age 65. You may qualify for a SEP that may let you sign up for Part B during:
Any month you remain covered under the group health plan and you or your spouse’s employment continues; or
The 8-month period that begins with the month after your group health plan coverage or the employment it is based on ends, whichever comes first. However, if your group health plan coverage or the employment it is based on ends during your initial enrollment period for Medicare Part B, you do not qualify for a SEP.
Many of these rules have exceptions, so read them carefully and call Medicare to confirm your interpretation.
Medicare Part D Premium Payment Penalty
It also pays to enroll in Medicare Part D timely. That is because an extra 1% of the national base beneficiary premium will be added to an applicant’s premium for each month of delay in enrolling, without creditable drug coverage. You may owe a late enrollment penalty if, at any time after your initial enrollment period is over, there is a period of 63 or more days in a row where you do not have Part D or other creditable drug coverage.
From your own experience what unique Medicare regulations do you have to share?