Missing your Initial Enrollment Period (IEP) can earn you late penalties for Medicare Part A, Medicare Part B and Prescription Drug Plan (Part D)
Part B and Part D enrollment penalties are lifetime penalties; Part A is limited to two years for every year you delayed enrollment
You may be able to delay enrollment without penalty if you had other coverage through an employer
For all the helpful benefits Medicare offers, there is one thing you’ll want to avoid: enrollment penalties. If you sign up late, you may be stuck paying a higher monthly premium amount for years.
Is it mandatory to go on Medicare when you turn 65? No, but if you don’t, each part of Medicare is subject to its own enrollment penalty. Skipping your Initial Enrollment Period could mean you’re on the hook for three different Medicare late enrollment penalties. That includes:
- Medicare Part A
- Medicare Part B
- Medicare Prescription Drug Plan (Part D)
Find a local Medicare plan that fits your needs
The first thing to know is that Medicare late enrollment penalties vary and each part of Medicare, Part A, Part B, and Part D, has a specific penalty if you neglect to enroll on time. Keep reading to learn about each part of Medicare and the possible penalty for late enrollment.
The easiest way to avoid all late enrollment penalties is to enroll in Medicare Part A and Part B when you’re first eligible. Even if you don’t have monthly prescriptions, enrolling in Part D during your initial enrollment period may help you avoid late penalties down the line.
Don’t wait to enroll after you lose creditable coverage
You have the option to delay Part B and Part D enrollment if you work past 65 and use your employer-sponsored group insurance. When you leave your employer’s group plan, you have a special enrollment period for Medicare. Don’t miss this opportunity to enroll, or you may be penalized.
Keep track of your past insurance coverage
If you choose to delay your Medicare enrollment because of your existing insurance, it’s important to keep track of records that show when your insurance began and ended. Your records show creditable coverage and can help you avoid late penalties within Medicare enrollment guidelines.
Are you eligible for cost-saving Medicare subsidies?
If you’ve missed your IEP, you may qualify for a Special Enrollment Period (SEP) under certain circumstances. If so, you’re allowed to enroll in a Medicare plan after your IEP without penalty. Special Enrollment Periods open after certain events, including:
- Loss of other coverage
- Medicare changes its contract with your plan
- And more [i]
If you have health insurance through a job-based group plan, an eight-month SEP will open when that coverage ends. At that point, you can sign up for Medicare without penalty. SEPs that open for different reasons may have different timeframes.