About the Medicare Late Enrollment Penalty. You can listen to this article.
Medicare Part B premiums can be expensive, but there are ways to avoid the medicare late enrollment penalty. In this blog post, we will discuss how to avoid Medicare’s late enrollment penalty in 2022. We will also provide a few tips on how to make sure that you are always up-to-date on your Medicare coverage.
The Parts of Medicare That Have Late Enrollment Penalties
Medicare Part A, Part B, and Part D can have late enrollment penalties for premiums. If you are late to enroll and don’t qualify for a Special Enrollment Period, you could pay any or all of these premiums depending on what kind of coverage you choose and when you sign up. See below for a quick overview of each penalty and how they impact you financially:
- Part A or B comes with a 10% penalty
- You are charged for twice the number of years you delay enrollment
- Part D is a 1% of the national average drug plan cost which is $32.00 starting the 3rd month of eligibility and continues until you get drug coverage
How Do Medicare Part B Premium Penalties Work?
The monthly Medicare Part B premium is $170.10 in 2022. It’s subject to an income-based surcharge if your modified adjusted gross income (MAGI) is above a certain level. The standard Part B premium is currently $85.50, so the maximum surcharge is $63 per month. The 10% late enrollment penalty will be accounted for every 12-month cycle for which you do not accept your part B coverage. This penalty stays for the life of your Part B coverage.
How Can I Avoid Paying A Late Enrollment Penalty?
There are a few ways that you can avoid paying a late enrollment penalty:
- Enroll during your Initial Enrollment Period
If you’re first eligibly is at age 65, you will have a seven-month period to sign up for Part B coverage. This period starts three months before and ends three months after your birthday.
- Sign up for a Special Enrollment Period
Let say you’re not eligible for an IEP. You may still be able to avoid the late enrollment penalty by signing up during a special enrollment period (SEP). You can qualify for a SEP in certain situations. For example, if you have group insurance and you move outside of your Medicare plan’s service area, or you qualify for a hardship exemption.
- Get coverage from another source
If you have creditable coverage from another source, such as an employer-sponsored health plan, you may not have to pay the late enrollment penalty. Creditable coverage includes most health insurance, including Medicare Advantage plans, employer-sponsored health plans, COBRA continuation coverage, and certain retiree health plans.
Can the State Help me Avoid Medicare Late Enrollment Penalties?
Yes. For example, the California Senior Advantage program pays all or part of the late enrollment penalty for certain enrollees who qualify. To learn more about whether your state offers a program to help you avoid late enrollment penalties, contact your state’s insurance department or visit the State Health Insurance Assistance Program website.
Also if you qualify for LIS(Low Income Subsidy) or Extra help through your state. This will wave your Part D penalty for good.
Medicaid will also take care of any Penalties for a late sign for Medicare and will also pay your part B programs.
What Else Pays Part B Premium?
If you are working, you should check with your HR department to see if they offer a Section 125 Cafeteria Plan. This will allow you to have your Part B premium deducted from your paycheck before taxes are taken out.
You can also set up automatic payments for your Part B premium from your checking or savings account each month. To do this, contact the Social Security Administration at (800)772-1213.
If you cannot afford to pay your Part B premium, you may be eligible for a Medicare Advantage Plan. These plans are offered sometimes for a $0.00 premium and depending on where you live in the country they have part B give back. This is where the plan pays a portion of your Medicare premium saving you money every month.
We have experience here with ways to avoid late enrollment penalties with Medicare. Also, we can guide you on what is available to help ease some of the penalties and take away some of the financial burdens. Give us a call so we can help you save some money