You have likely heard that you’re required to enroll in Medicare at age 65, and that you could face a penalty for failing to do so. But how much is the penalty for late Medicare enrollment? And are there any exceptions?
Yes, you’re supposed to enroll in Medicare at age 65, either opting for Medicare Parts A and B (Original Medicare) or a Medicare Advantage plan (which combines the two into one plan). Medicare Part A is free for most people, assuming you accumulated enough work credits, so it’s Part B that imposes a premium and potentially a penalty for late enrollment. That premium will amount to 10 percent of your regular Medicare premiums for each year that you delay enrollment. So if you delay enrollment by five years, your Medicare premiums will have a 50 percent penalty tacked on.
Most people pay the base premium, but some pay higher premiums due to earning higher incomes. So that’s another factor to consider.
But yes, there are exceptions to these rules. If you’re covered by an employer’s group healthcare plan, and that employer has more than 20 employees, then you don’t have to enroll in Medicare until your employment ends. At that point, you will have an 8-month Special Enrollment window in which you can enroll. After that, the penalty would apply.
The above rules also apply to those who are covered by a spouse’s employer-based plan.
Otherwise, yes, you’re required to enroll in Medicare at age 65, during your regular enrollment window. Otherwise you will face a penalty. If you feel that you can’t afford the premiums, you can apply for the Medicare Savings Program, which covers your premiums for you. Those who qualify for the Medicare Savings Program automatically qualify for the Extra Help program, which covers the cost of a Part D (prescription) plan.
It’s very important to enroll in Medicare when you’re required to do so. But if the process seems overwhelming, just remember that help is available to you. Give us a call and we’ll walk you through the enrollment process so that you can avoid penalties or the danger of going without health insurance.