Perhaps one of the top things that seniors do not know about Medicare is that there are lifetime penalties assessed in certain situations. Most people have no clue how Medicare works and will not even research it until they get closer to retirement age. Once you get close to enrolling in Medicare, you might find that it is more convoluted than you thought.
The bad news is that Medicare can be extremely confusing. What is worse is that well-intentioned friends, neighbors, and relatives try to give advice which oftentimes is highly inaccurate. Even many human resources personnel are just not well versed in Medicare.
This is why if you are turning 65 soon, you need an experienced Medicare broker that can walk you through the maze and ensure you make accurate decisions. Medicareinc.com can help you avoid penalties and give you up-to-date and accurate information.
Medicare and Penalties: Late Enrollment Penalty
The first area of penalties you might be unaware of is the late enrollment penalty. If you do not sign up for Medicare when you are first eligible, you may have to pay a higher premium for Part A and/or Part B.
So when do you sign up for Medicare? You are first eligible for Medicare at age 65. If you are disabled, you may be eligible for Medicare before age 65. If you have been receiving Social Security Disability Insurance (SSDI) benefits for at least two years, you are eligible for Medicare at any age. If you have Amyotrophic Lateral Sclerosis (ALS), also known as Lou Gehrig’s disease, you are eligible for Medicare as soon as you begin receiving SSDI benefits after your diagnosis.
It is important to sign up for Medicare just as soon as you become eligible. You can begin the paperwork for Medicare as early as 3 months prior to turning 65, during the month you turn 65, and up to 3 months after turning 65. These are very important dates to remember.
Specifically, when it comes to Medicare Part B, you can wait to enroll but there may be a penalty if you do not enroll when you are first eligible. If you miss your initial enrollment period and do not have creditable coverage (coverage that is as good as or better than Medicare coverage), you may have to pay a late enrollment penalty when you do enroll in Part B. The penalty is an additional 10% for each full 12-month period that you could have had Part B but did not enroll in it! That can really add up!
However, if you have creditable coverage through an employer or union-sponsored plan, it is possible to delay enrolling in Part B without penalty. It is important to check with a licensed insurance agent, like Medicareinc.com, to follow the proper steps.
Are There Penalities for Your Part D Drug Plan?
The second area that Medicare can and will enforce penalties is when it comes to your Medicare Part D Plan. Part D is specific to your drug plan.
Many Medicare recipients are unaware they must enroll in a Part D plan once they become eligible for Medicare, even if they currently do not take medication or need prescriptions.
Going without a Part D drug plan is not advisable, even if you do not currently take any medications. By not enrolling when you are first eligible or if you go for a period of 63 days or more after you qualify, you will be subject to a financial penalty.
Keep in mind, this IS NOT a one-time penalty. It is a penalty that is annual and may increase each year. Also, you may have to pay this penalty for as long as you have a Medicare prescription drug plan. Remember to ask a Medicareinc.com agent which Part D plan is right for you.
Medicare and Penalties: Losing Creditable Coverage
When it comes to Medicare, creditable coverage is imperative. What is creditable coverage and why will Medicare have penalties against it? Creditable coverage is having health insurance in place of Medicare when you become eligible for Medicare. In some cases, seniors continue working past age 65 and maintain appropriate employer-sponsored health insurance.
If you fail to maintain proper creditable coverage, you will be penalized by Medicare. Sometimes people lose their employer-sponsored coverage or they retire and let too much time lapse before enrolling properly in Medicare. It is important to know when to sign up for Medicare when you have other forms of health insurance.
Medicare and Penalties: Not Providing Income-Related Information
Lastly, Medicare will deliver penalties if you do not provide proper income-related information. Some seniors are required to pay a higher prem premium for Part B or Part D because it is based on their income. You must always provide the necessary information to the Social Security Administration. If you fail to do so, you may be assessed a penalty.
Final Thoughts
The unfortunate reality is that Medicare can be confusing. If you do not abide by the rules, you can be penalized. Sometimes those penalties are for life. Instead of trying to calculate the right time to enroll, just contact us. Medicareinc.com is here at no cost to help you get the right information the first time.
