Avoiding Medicare Late Enrollment Penalties

Medicare can help you stay healthy and save money for the rest of your life, especially if you avoid late enrollment penalties. Everyone is encouraged to sign up for Medicare as soon as they’re eligible. You can still sign up later but will face long-lasting financial penalties every month. These fees can increase the amount you pay for Texas Medicare for decades to come. Learn more about Medicare late enrollment penalties so you can avoid these charges.

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What Are Medicare Late Enrollment Fees?

Medicare late enrollment charges are fees for people who don’t sign up for Medicare when they’re eligible. Most Texans are eligible for Medicare when they turn 65. You can avoid extra charges and keep your coverage by signing up for Medicare on time.

The following Medicare parts charge fees if you sign up late:

  • Medicare Part A, which is hospital insurance
  • Medicare Part B, which is outpatient medical coverage
  • Medicare Part D, which is prescription drug coverage

Medicare Part C, also known as Medicare Advantage, doesn’t have a late enrollment fee. There technically is no penalty if you sign up for Medigap supplemental insurance right away, but you’ll likely pay higher rates if you delay.

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Why Does Medicare Charge A Late Enrollment Fee?

Medicare is a health insurance company. Just like private insurance companies, Medicare counts on healthy members to pay in and support the entire system. Healthy members provide a financial cushion for very ill members. Late fees encourage people to enroll as soon as they’re eligible.

There are some cases when you can sign up for Medicare after you become eligible and not pay a fee. For example, people who have insurance through their employer can keep this coverage while they’re still working, and then sign up for Medicare when they retire.

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About The Medicare Part A Late Enrollment Penalty

Most Texans are eligible for Medicare Part A at no cost. If you or your spouse worked ten years or more in a qualifying job, you can both sign up for Medicare when you turn 65. People without this work history can still sign up for Medicare Part A so long as they pay a monthly premium.

You’ll be charged late enrollment fees if you sign up for Medicare Part A after your Initial Enrollment Period (IEP).

Medicare Part A late enrollment fees aren’t permanent. Your fee will cost 10% of your monthly premium. Medicare will charge you this fee every month for twice as long as you delayed signing up.

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About The Medicare Part B Late Enrollment Penalty

You can also sign up for Medicare Part B around your 65th birthday. Medicare Part B does have a monthly premium for all members. This premium is automatically deducted from your Social Security benefits in most cases. 

If you don’t already receive Social Security when you turn 65 and also don’t sign up for Medicare Part B at that time, you’ll be charged a late enrollment penalty every month. This penalty is in addition to your regular Medicare Part B monthly payment. Your premium will go up by 10% for every year that you were eligible for Part B but didn’t enroll.

Part B penalties don’t expire, so you’ll pay this fee for the rest of your life. This long-lasting charge is one reason it’s important to sign up for Medicare as soon as you can.

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About The Medicare Part D Late Enrollment Penalty

You can sign up for Medicare Part D whenever you’re eligible for Part A and Part B. Most people are eligible when they turn 65. You can also sign up for Medicare Part D up to three months after your Medicare Part A and Part B go into effect. If you wait longer than three months, you’ll face a late enrollment fee.

The Medicare Part D late enrollment cost equals one percent of your average monthly prescription premium cost, multiplied by the number of months you didn’t enroll. This fee is permanent so you’ll pay it for the rest of your life.

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About Medigap Late Enrollment Costs

There isn’t a formal penalty if you delay signing up for Medigap supplemental Medicare insurance. However, you will wind up paying more if you don’t enroll immediately. Insurance companies offer the best rates to people who sign up as soon as they’re eligible. You may also be denied coverage if you develop health problems before adding Medigap. You can sign up for Medigap coverage for six months after your 65th birthday.

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How To Avoid Medicare Late Enrollment Penalties

The best way to avoid late Medicare enrollment fees is to sign up as soon as you’re eligible. Your Initial Enrollment Period starts three months before your 65th birthday, includes your birthday month, and continues for another three months. You can sign up for Medicare without penalties and start your coverage right away during this time.

Another way to avoid late enrollment fees is to maintain other creditable insurance coverage. If you have insurance through your employer or your spouse’s employer, you might want to keep this coverage after you turn 65. People in this situation can sign up for Medicare during their Special Enrollment Period, which takes place for 8 months after you lose your other insurance.

People who are eligible for financial assistance through the Extra Help program aren’t responsible for Medicare penalties.

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Learn More About Signing Up For Medicare

Medicare is a powerful tool, especially for members who follow the guidelines and sign up on time. You can avoid penalties and ensure coverage by enrolling in Medicare as soon as you’re eligible. Coverage2Care can help you learn more about signing up for Medicare, avoiding penalties, and getting the best coverage for your needs. Contact us today to learn more.

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