Late Enrollment Penalties

Many people without any health insurance that are in excellent health condition wonder if they should enroll in Medicare Part B (Medical Insurance) and Medicare Part D (Prescription drug).  New clients tells me all the time that they don’t want to buy Part B or Part D because they don’t need it right now.  Also, many people believe they are saving the government money by not signing for these parts because they are not using the benefits.  The truth is that any insurance (car, home, health, etc.) only work when a large number of people join the plan and less people use the benefits.  The more people in excellent health that join a plan, the less it will cost for everyone (that is why all car insurance companies always want good drivers).   The Late Enrollment Penalty encourage people to join the plan even when they are not using the benefits.  Remember, these penalties do not apply to you if you are enrolled in a “Creditable” (as good or better than Medicare) health insurance plan like an employer group or union coverage.

Enrollment penalties:

1. Delay enrollment for Part B (Medical Insurance)
2. Delay enrollment for Part D (Prescription Drug Coverage)

So, what is the cost of the penalties?

For Part B, the penalty is an additional 10% of the Part B premium for every year that you do not have Medical insurance since you first became eligible for Medicare.   For example, the Part B premium in 2023 was $164.90 per month.  If you delay Part B for 5 years, your Part B premium will increase by $82.45 (10% of $164.90 times 5 years or $16.49 x 5 years = $82.45).  Your total Part B premium would has been $247.35 ($164.90 + $82.45=$247.35).

Read on Medicare.gov about the Medicare Part B (Medical Insurance) Late Enrollment Penalty.

Fort Part D, the penalty is an additional 1% of the “national base beneficiary premium.”    This penalty is accumulated per month and is added to your monthly Part D premium.  For more explanation o this penalty visit the Medicare.gov website.    The penalty never goes away unless you qualify for Low Income Subsidy (LIS) also known as Extra Help for Prescription Drug.  LIS is additional help from the Federal Government for people with low income and low resources.  See if you qualify for Extra Help and apply.

Read what Medicare.gov says about the Medicare Prescription Drug (Part D) Late Enrollment Penalty.