Medicare open enrollment is available October 15th through December 7th.

Our goal is to help individuals coming on to Medicare understand what options they have, as well as help those already on Medicare understand how their benefits work. Below are a few examples of how knowing when and how to signup can help save you late enrollment penalties.

Part B:

If you don’t sign up for Part B when you’re first eligible, you may have to pay a late enrollment penalty. If you didn’t get Part B when you’re first eligible, your monthly premium may go up 10% for each 12-month period you could’ve had Part B, but didn’t sign up. In most cases, you’ll have to pay this penalty each time you pay your premiums, for as long as you have Part B. And, the penalty increases the longer you go without Part B coverage.

Example:
Your Initial Enrollment Period ended December 2016. You waited to sign up for Part B until March 2019 during the General Enrollment Period. Your coverage starts July 1, 2019. Your Part B premium penalty is 20% of the standard premium, and you’ll have to pay this penalty for as long as you have Part B. (Even though you weren’t covered a total of 27 months, this included only 2 full 12-month periods.)

Part D:

You may owe a late enrollment penalty if at any time after your Initial Enrollment Period is over, there’s a period of 63 or more days in a row when you don’t have Medicare drug coverage or other creditable prescription drug coverage. You’ll generally have to pay the penalty for as long as you have Medicare drug coverage.

Example:
Mrs. Martinez is currently eligible for Medicare, and her Initial Enrollment Period ended on May 31, 2017. She doesn’t have prescription drug coverage from any other source. She didn’t join by May 31, 2017, and instead joined during the Open Enrollment Period that ended December 7, 2019. Her drug coverage was effective January 1, 2020.

2021 – Since Mrs. Martinez was without creditable prescription drug coverage from June 2017–December 2019, her penalty in 2021 was 31% (1% for each of the 31 months she didn’t have coverage) of $33.06 (the national base beneficiary premium for 2021), or $10.25 each month. Since the monthly penalty is always rounded to the nearest $0.10, she pays $10.30 each month in addition to her plan’s monthly premium.

Here’s the math:
.31 (31% penalty) × $33.06 (2021 base beneficiary premium) = $10.25
$10.25 rounded to the nearest $0.10 = $10.30
$10.30 = Mrs. Martinez’s monthly late enrollment penalty for 2021

For more information or to see more examples, visit medicare.gov.

Our goal is to help individuals coming on to Medicare understand what options they have, as well as help those already on Medicare understand how their benefits work. Have questions? Schedule a 1-on-1 no cost Medicare consultation today! Click here to contact us now.

 

Blog by Ruth Hoffman – Medicare Benefits Specialist

Learn more about Ruth and the rest of the Storen Financial team here.