Most new Medicare beneficiaries I speak with echo the same fear: threatening Medicare penalties. These fears are not unfounded. Medicare is fraught with easy missteps, and knowing most of the associated penalties are “lifetime,” is cause for concern.
These are some of the most common mistakes seniors make:
Part B Late Enrollment Penalty
Seniors who are NOT drawing Social Security at 65 must enroll in Medicare Part B during their IEP (Initial Enrollment Period) – three months before they turn 65, the month of their birthday, and three months after turning 65. If they fail to do so, they are charged a Late Enrollment Penalty at 10% for every 12-month period they went without Part B. If they (or their spouse) are still working and covered by an employer, that is considered “creditable” – they can delay Part B enrollment and use a SEP (Special Election Period) when ready. That SEP lasts for eight months.
If they miss their IEP and don’t have an SEP, they are also now restricted on when they can sign up for Part B. They will have to wait for the General Enrollment Period (GEP) (Jan. 1 – March 31). Coverage begins the first day of the next month after signing up. Unfortunately, COBRA is not considered “creditable” for Medicare Part B (Ridiculous!). This catches many seniors off guard.
If a senior’s employer has less than 20 employees, they still need to enroll in Medicare at 65 because their group plan will be secondary to Medicare.
Part D (RX) Late Enrollment Penalty
Every week, I help seniors who are in this boat and it is common among those who do not take any prescription drugs. The Part D late enrollment penalty is a fee added to the monthly Medicare Part D premium of seniors who don’t enroll when first eligible. The penalty is 1% of the national base beneficiary premium for each full month without coverage. Again, if the beneficiary (or their spouse) has coverage with an employer, this likely will not apply unless the RX coverage is not “equivalent” to Medicare’s drug coverage. This is a lifetime penalty, too.
I realize how confusing all of this can be, which is why we make it our mission to help seniors navigate Medicare without stress or unnecessary costs.
Every senior’s situation is a bit unique, and we can help you avoid these mistakes! Our service is free. Give us a call at (800) 750-2407 or visit us at 2604 Long Prairie Road, Suite 100 in Flower Mound.
God Bless!
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