- October 1, 2020
Penalties are the worst!
Fortunately, we know exactly how to avoid all the Medicare penalties and we are happy to help you avoid them as well. Today, we will dive in to the most common Medicare penalty: the Medicare Part B penalty.
Before we dive in, let's alleviate some of your fears and discuss who WON'T get slapped with a Part B penalty.
Who Won’t Get Penalized for Part B?
First, we want to address those of you who won't get penalized for Part B, because there are, in fact, many people who will not be penalized.
Initial Enrollment Period
If you enroll into Medicare during the Initial Enrollment Period (IEP) you will not be penalized for Medicare Part B. What is the IEP? It’s a seven month period that starts three months before you turn 65 and continues three months after your 65th birth month. If you plan to retire at 65 then you must enroll into Medicare during this 7 month window. If you are working then you will sign up later once you retire.
Special Enrollment Period
The second group of people that will not be penalized for Part B are those enrolling during what is called the special enrollment period (SEP). The special enrollment period starts when your employment ends and lasts for the next eight months. So when you retire, you’ll have eight months to come into Medicare without any penalties.
Who is the special enrollment period for? The SEP is for those who didn't start Medicare at 65 because either they or their spouse were still working. Now they’re over 65 and retiring, and they want to get on Medicare so they will use the special enrollment period and will not have to worry about any Part B penalties.
Who Will Get Penalized for Part B?
We know who won’t get penalized for Medicare Part B, now let’s dive into who will be affected by Part B penalties.
General Enrollment Period
Anyone who uses the third enrollment period, called the General Enrollment Period (GEP), will have to pay the Medicare Part B penalty. The GEP is for those who missed the initial enrollment period (when they turned 65) and also missed the special enrollment period (the 8-month window right after they retired). Since they missed the first two enrollment periods, the GEP is now their only option to get on Medicare.
Unfortunately, there are several problems that come with enrolling during the GEP. First, you can only enroll during the first quarter of the year. So if you make a mistake and fail to enroll during the first three months, you’ll have to wait until the next year to enroll in Medicare.
The second problem with the GEP is your coverage is delayed. Even if you enroll in the first quarter of the year, your coverage won't start until the beginning of the third quarter.
The final (and worst) problem with enrolling during the GEP is the Part B penalty; here is how it works. For every 12 months you go without Medicare Part B (when you should have had it), a 10 percent penalty will be added to your Part B premium every single year for the rest of your life. So if you go without Part B for one year, you’ll have an extra 10 percent added to your yearly premium from here on out. If you go without enrolling in Medicare Part B for two years, a 20 percent lifetime penalty will be added to your yearly premiums.
Anyone who enrolls during the initial enrollment period or the special enrollment period will not have to worry about Part B penalties. If you miss these first two enrollment periods and are forced to enroll during the general enrollment period, you will have to pay that Part B penalty (10 percent extra for every 12 months you weren’t on Part B) and your coverage may be delayed. Remember, these penalties are lifetime penalties. As you can see, its crucial to enroll in Medicare at the right time!
Now that you know when to enroll you should be able to avoid any penalties! Of course if you would like to ensure you stay penalty free our Medicare School Guides would love to help. If you would like to schedule a free phone appointment with one of our highly trained Guides click here to find a time that works for you. You can also call us with any questions at (800) 864-8890.
MedicareSchool.com started in 2009 to provide an unbiased and education-focused service to individuals approaching Medicare enrollment. Since then, MedicareSchool.com has helped over 100,000 people find and enroll in the best Medicare plans that fit their budget.