What is a Medicare Penalty Period?

Medicare is a government program nationwide which covers medical services under the Parts A, B, C, and D. As you approach age 65, enrollment periods become applicable.

If you don’t sign up for Medicare when you’re eligible here’s how the Enrollment Penalty Period works:

For Part A –

If not eligible for “premium free”,  your monthly fee (comes out of your SSA check) may go up 10%. You’ll have to pay this higher premium for twice the number of years you could have had Part A, but didn’t sign up.

Example-

If you were eligible for Part A for 2 years, but didn’t sign up, you’ll have to pay the higher monthly fee for 4 years.

For Part B-

Your monthly premium for Part B may go up 10% for each 12-months that you could have had Part B, but didn’t sign up for it. You may also have to wait until the General Enrollment Period (from January 1 to March 31) to enroll in Part B. Coverage will start July 1 of that year.

Example-

Your Initial Enrollment Period ended 9/30/09, but you waited to sign up for Part B until the General Enrollment Period in 03/2012. That’s 30 months that you waited to sign up. Therefore, your Part B premium penalty is 20%. Now you’ll have to pay this penalty for as long as you have Part B. Basically for as long as you live.

You may also owe a late enrollment penalty if, for any continuous period of 63 days or more after your Initial Enrollment Period is over, you go without one of these:

• A Medicare Prescription Drug Plan (Part D)
• A Medicare Advantage Plan (Part C) (like an HMO or PPO)
• Another Medicare health plan that offers Medicare prescription drug coverage
• Creditable prescription drug coverage

Usually, you don’t have to pay a penalty if you meet certain conditions that allow you to sign up during a Special Enrollment Period. Also, if you have limited income and resources, your state may help you pay for Part  A, and/or Part B. You may also qualify for Extra Help to pay for your Medicare prescription drug coverage.

If you would like to speak with someone regarding your enrollment period or for help selecting a Medicare plan that is best for you, contact us for more information.