Avoiding Late Penalties

Don’t let them catch you by surprise!


There are three penalties associated with Medicare Part A, Part B and Part D and they all kick in for the same reason: You didn’t sign up when you were first eligible. Which means it will cost you more money longer term. Let’s unravel this together:

Part A Penalties

If you aren’t eligible for premium-free Part A, and you don’t purchase it when you’re first eligible, your monthly premium may go up by 10%. You’ll have to pay the higher premium for twice the number of years you could have had Part A, but didn’t sign up. For example:

If you were eligible for Part A for two years but didn’t sign up, you’ll have to pay the higher premium for 4 years.

Part B Penalties

If you don’t sign up for Part B when you’re first eligible, or if you drop Part B and then get it later, you may have to pay a late enrollment penalty for as long as you have Medicare. Your monthly premium for Part B may go up by 10% for each full 12-month period that you could have had Part B, but didn’t sign up for it. For example:

Mr. Smith’s Initial Enrollment Period ended September 30, 2010. He waited to sign up for Part B until March 2013 during the General Enrollment Period. His Part B premium penalty is 20%. (While Mr. Smith waited a total of 30 months to sign up, this included only 2 full 12-month periods.)

Part D Penalties

For Part D, the late enrollment penalty is an amount added to your Medicare Part D premium. You may owe a late enrollment penalty if at any time after your initial enrollment there’s a period of 63 or more days in a row when you don’t have Part D or other creditable prescription drug coverage. The cost of the late enrollment penalty depends on how long you didn’t have creditable prescription drug coverage. The formula used to calculate the penalty is based on the “national base beneficiary premium” which may increase every year, which means your penalty would also increase each year. This may impact your monthly premium for as long as you have a Medicare drug plan.

When should I sign up for Medicare?

There is a seven month period when you can sign up for Part A and/or Part B. It starts three months before your 65th birthday month and ends three months after your 65th birthday month.

Example: Turning 65 on May 15

  • Let’s say you are turning 65 on May 15: You would enroll anytime during February, March or April in order to have coverage May 1 with no late penalties.
  • While your enrollment period allows you to sign up anytime during May, June July or August, the start date for your Medicare coverage will be delayed, so be sure to sign up before the month of your birthday!

Bottom line: Don’t delay

Sign up for Medicare when you are first eligible. Don’t let indecision stop or delay you. If you are unsure which plan is right for you, or if you have questions about a Medicare Supplement plan, Medicare Advantage Plan or Part D prescription drug plan, call a SeniorQuote Licensed Agent today. We can help you navigate through the complexity of health insurance, explore all your options, and get you the coverage you need at a price you can afford.

With SeniorQuote you have the Power to Choose and Freedom to Save.