Late Enrollment Penalties for Medicare

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Medicare is a federal health insurance program that most people are eligible for when they turn 65. There are 4 parts to Medicare: Parts A, B, C, and D. If you do not sign up for these plans when you are able to, you could face late enrollment penalties. Learn more about the late fees – and how to avoid them – below. 

Part A Late Enrollment Penalties

Most people do not have to pay a monthly premium for Part A provided that they or their spouse have paid about 10 years’ worth of taxes. However, the people that do have to pay a monthly premium will be subject to a late fee if they do not sign up for Part A when they are first eligible. Specifically, you will have to pay a 10% increase of the monthly premium for double the amount of years that you were eligible for but did not sign up for. For example, if you were eligible for Part A but did not sign up for 3 years, you will have to pay an extra 10% of the monthly premium for 6 years.

Part B Late Enrollment Penalties

Part B is technically optional. However, you will be subject to a late fee if you did not sign up for Part B when you became eligible but decided to sign up later. The late fee is a 10% increase in your monthly premium for each 12-month period you could have signed up for Part B but did not. For example, if you did not sign up for Part B for 24 months, your monthly premium will go up by 20%. In 2021, the monthly premium that most people pay is $148.50.

Senior man sitting with paperwork and using calculator going over his late enrollment penalties.
You will be subject to a late fee if you did not sign up for Part B when you became eligible.

Medicare Part C 

Medicare Part C refers to Medicare Advantage Plans. This option is completely optional. There are no late fees associated with not signing up for Part C as soon as you are eligible for Medicare. However, keep in mind that the costs you pay for Original Medicare, such as Part A and B premiums, will also need to be paid while enrolled in an Advantage Plan.

Part D Enrollment Penalties

Part D is also optional. There are multiple ways to get prescription drug coverage under Medicare. If you have prescription drug coverage through employer coverage, another healthcare plan, or a Medicare Advantage Plan, you do not need to enroll in Part D. Medicare will not subject you to a late fee.

However, if you do not have prescription drug coverage and do not enroll when you are eligible, you will have to pay late fees. The Part D late fee is calculated by multiplying 1% of the national base beneficiary premium. This premium was $33.06 in 2021. You then add that 1% to your Part D monthly premium for the rest of the time you have Part D. 

To avoid these late fees, pay attention to enrollment periods and call us at (662) 844-3300 today.

Justin Brock

Justin Brock

The CEO and President of Bobby Brock Insurance. A nationally syndicated Medicare advisor, best-selling author of Medicare Breakdown: The Alphabet Soup of Medicare, and pacesetter for over 20,000 senior market insurance agents. Featured in many insurance-related publications for his Medicare and Health insurance... Read More »

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