Medicare coverage may sound useless until you face a long prescription or hospital bill. The sooner you sign up for Medicare, the better it is for you as this way, you won’t have to encounter any penalties. Medicare penalties are applicable when you pass your initial enrollment period. Each part of Medicare has different penalties; therefore, having complete knowledge of what those penalties are and how you can avoid them is an excellent thing you can do. This article will discuss Medicare penalties for late enrollment.
Medicare Part A Penalties
The first thing you should do once you are eligible for Medicare is to enrol yourself in Medicare Part A. Medicare Part A will emanate the penalties for every year a person passes their initial enrollment period. Part A penalty is 10% multiplied by your monthly premium payment. Moreover, this amount has to be paid for double the years a person has been missing their enrollment periods—the initial period to enrol yourself into Medicare start about three months before you age 65. The period ends three months after the person has aged 65. You get full six months to sign up for Medicare.
There are two conditions where you can get a penalty in Medicare Part A:
1. If you are paying monthly for Part A.
However, if a person has worked for ten years and has paid taxes for Medicare, he doesn’t have to pay for Medicare Part A. Therefore, that person won’t have to pay penalties for Part A.
2. If a person misses their initial enrollment period, then he shall pay the penalty.
Medicare Part B Penalties
Many people manage to dodge the Part B premium payments because they already have an employer’s plan coverage from their workplace. These people are the ones who get a Special Enrollment Period, and this way, they wouldn’t have to pay the Part B penalty.
Part B’s penalty is 10% added to your monthly premium, and you will have this for all the years you missed your eligibility period. The eligibility criteria for Part B is similar to Part A.
It is far better to enrol yourself during your eligibility period than pay 10% more of what you would’ve paid. Above all, you will have to keep paying this penalty for as long as you have part B coverage.
Medicare Part D Penalties
When you turn down any part of Medicare during your eligibility, it is essential to remember that you will be charged with the late enrollment penalty if you need it in the future. Medicare Part D is mainly for prescription coverage. In case you already have coverage that pays almost equal to a Medicare prescription, you might escape the penalty because you would have creditable coverage.
Part D’s penalty is 1% of the monthly premium multiplied into the years or months you’ve missed your enrollment period. To avoid this penalty, enrol in part D during enrollment in Part A and Part B.
Keep in mind that Medicare Part D beneficiary changes every year, so the penalty charges may also vary.
How Special Enrollment Period Can Save You From Penalty
Special Enrollment Period is the one way you can avoid the penalties for enrolling late. But the Special Enrollment Period is only for the ones who already have coverage from the employer’s or union plan or if you are under your spouse’s coverage. If your case matches any one of these, you can shift to Medicare without paying the penalties. People usually switch from their previous coverage to Medicare’s coverage when their union or employer coverage reaches its end.
Conclusively, Skipping your Medicare enrollment periods is only going to create more issues. Therefore, enrolling at the right time will keep you away from the penalties. However, if you have a Special Enrollment Period, then you can skip the penalties successfully. But if you don’t qualify for the Special Enrollment Period, then you’ll have to pay a lifetime of penalties.
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