Missing your Initial Enrollment Period can be costly. Medicare Part A, Part B and Part D may charge premium penalties if you miss your initial enrollment dates, unless you qualify for a Medicare Special Enrollment Period.

Working Past Age 65?

You may be able to delay enrolling in Part B–and postpone paying the premium–without penalty.

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Medicare Part A Premium Penalty

Part A is premium free if you or your spouse worked and paid taxes for at least 10 years. If you have to pay a premium, the penalty for late enrollment is 10%.

The Part A premium penalty is charged for twice the number of years you delay enrollment. If you wait 2 years, for example, you would pay the additional 10% for 4 years (2 x 2 years). The penalty applies no matter how long you delay Part A enrollment.

Medicare Part B Premium Penalty

The penalty for late enrollment in Part B is an additional 10% for each 12-month period that you delay it.

Let’s say your Initial Enrollment Period ended September 30, 2010, for example. Then you enroll in Part B during the General Enrollment PeriodThis is when you can enroll in Medicare if you didn’t sign up during your Initial Enrollment Period. The General Enrollment Period (GEP) is January 1 – March 31 every year. You may have to pay a penalty for late enrollment. Coverage takes effect on July 1. in March 2013. Your late enrollment penalty would be 20% of the Part B premium, or 2 x 10%. This is because you waited 30 months to sign up, and that time period included 2 full 12-month periods.

In most cases, you have to pay the penalty every month for as long as you have Part B. If you’re under 65 and disabled, any Part B penalty ends once you turn 65 because you’ll have another Initial Enrollment Period based on your age.

Medicare Part D Premium Penalty

The penalty for late enrollment in a Part D plan is 1% of the average Part D premium for each month you delay enrollment. You pay the penalty for as long as you’re enrolled in a Medicare Part D plan.

You may delay enrolling in Medicare Part D without penalty if you qualify for Extra HelpA Medicare program that helps people with limited income and resources pay for Medicare prescription drug plan costs, such as premiums, deductibles and coinsurance. or have creditable drug coverage. If it’s been more than 63 days since you’ve had creditable coverage, then the penalty may apply.

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