Your Medicare Community - MedicareFAQ

How to Avoid Original Medicare Late Enrollment Penalties

August 31, 2020 Lindsay
Your Medicare Community - MedicareFAQ
How to Avoid Original Medicare Late Enrollment Penalties
Show Notes Transcript

If you're considering delaying enrollment into Original Medicare Parts A and B, don't go anywhere. In this video, we'll go over what you need to know about Medicare's late enrollment penalties.

My name is Lindsay Engle, and I'm the Medicare Expert for Elite Insurance Partners and MedicareFAQ.com. When you first become eligible for Medicare, you may consider delaying enrollment. However, there are penalties associated with delaying enrollment in Medicare. We're here to explain what they are and how to avoid them.

Part A is your inpatient or hospital coverage. Most people are entitled to premium-free Part A, as long as they paid into enough quarters while still working. The late enrollment penalty for Part A is 10% of the current Part A premium. You'll pay this for twice the number of years you were eligible but didn't enroll.

For example, if you were eligible for two years but never signed up, you would have to pay 10% above the standard premium for four years.

Part B is your outpatient or doctor's coverage. The Part B penalty is 10% above the standard premium for every 12 months you went without coverage. Unlike Part A penalty, the Part B penalty is lifelong. The only way around it is if you're eligible for a Special Enrollment Period.

An example of the Part B penalty is if you were eligible for coverage in November 2013 but chose not to enroll until March 2017. This would mean you delayed enrolling for 40 months, or three years and five months. This time would count as three full 12-month periods, meaning you would have to pay a late enrollment penalty for 30% above the standard premium.

Now, how do you avoid both of these penalties? To avoid the Part A and Part B penalties, you'll want to enroll when you're first eligible; during your Initial Enrollment Period.

Your Initial Enrollment Period starts three months before the month of your birthday includes the month of your birthday, and continues three months after. Once you miss your seven-month IEP, you may begin to incur penalties, unless you're eligible for a Special Enrollment Period.

The majority of beneficiaries choose to enroll in Part A because it's premium-free for most. The most common reason for delaying Part B is if you have group employer coverage and your employer has more than 20 employees. In this case, the coverage is considered creditable, and you can delay enrollment into Part B with no penalty.

One of the most common questions we receive is if there's a cap on the Part B penalty. Unfortunately, at this time, there is no cap.

Another thing to note is if you're eligible for Medicare due to a disability and were paying penalties on your premiums, the premiums will be eliminated once you turn 65.

If you feel that the penalties you have incurred shouldn't have applied to you, you can submit a reconsideration request to Medicare. [LINK HERE]

I hope you found this video helpful! If you did, don't forget to subscribe to our YouTube channel. Turn notifications on so you'll know as soon as we upload a new video.

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If you're considering delaying enrollment into Original Medicare Parts A and Part B,

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don't go anywhere. In this video, we're going to go over

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what you need to know about Medicare’s late enrollment penalties.

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Hi Medicare Community. My name is Lindsay Engle

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and on the Medicare expert for Elite Insurance Partners and MedicareFAQ.com.

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When you first become eligible for Medicare, you may be considering delaying enrollment. First

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we'll go over each penalty associated with Part A and Part B.

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And then we'll go over how to avoid them. Part A is your inpatient or Hospital coverage.

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Most people are entitled to Medicare Part A premium free

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as long as they paid into enough quarters

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while still working. The penalty for Part A is 10% of the current Part A premium.

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This will be paid for twice the number of years you are eligible,

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but did not enroll. An example would be if you were eligible for two years,

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but never signed up. That would mean you would have to pay 10% above the standard premium

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for a total of four years. Next

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we'll go over the Part B penalty. Part B is your outpatient or doctor’s coverage.

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The Part B penalty is 10% above the standard premium for every 12 months

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you went without coverage. Unlike part A,

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this is a lifelong penalty. The only way around it is if you're eligible

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for a Special Enrollment Period. An example of how the Part B

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penalty works is let's say you are eligible

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for coverage in November of the current year.

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However, you waited to enroll in January during the General Enrollment Period. In this scenario

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since you do not delay

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a full 12 months. You won't be charged a penalty.

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Now, let's say you are eligible in November of 2013 but chose to not enroll until March of 2017.

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This would mean that you delayed enrolling for a total of 40 months or 3 years and 5 months.

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This would count as three full 12 month periods.

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Meaning, you'll have to pay a penalty of 30% above the standard premium. Now,

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we'll go over how to avoid both of these penalties. To avoid the Part A

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and Part B penalty you'll want to enroll

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when you're first eligible during your Initial Enrollment Period. Your Initial Enrollment Period will

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begin three months prior to the month of your birthday. Will be the month of,

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and continued for three months after your birthday. Giving you a

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total of a 7-month window to enroll in Medicare.

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Once you miss your seven-month Initial Enrollment Period this

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is when penalties may begin to incur

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unless you have a Special Enrollment Period that you're eligible

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for. The majority of the time beneficiaries choose to enroll in Part

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A since its premium-free for most. The most common reason you may delay enrolling

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into Part B is if you have group employer coverage and your employer has more than 20 employees.

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In this case, it's considered credible

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and you can delay enrolling into Part B without being penalized.

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One of the most common questions we receive from our customers

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is if there is a cap on the Part B penalty.

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Unfortunately at this time, there is no cap.

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Another thing to note is that if you're eligible

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for Medicare due to a disability and were currently paying penalties on your premiums.

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These penalties will be eliminated

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once you turn 65. If you feel these penalties shouldn't have applied to you

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or your current situation.

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You can submit a reconsideration request. Medicare has a

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reconsideration request form to file an appeal.

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We'll make sure to include a link below in the description.

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I hope you found this video helpful, and if you did,

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don't forget to subscribe to our YouTube channel. Turn notifications on so you're notified each time

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we upload a new video. We also have a great Medicare community on Facebook.

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We'll make sure to include a link in the description below so you can join today. Until next time.

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Bye.