How to Avoid Medicare Penalties for Late Enrollment

Medicare late enrollment penalties are no joke. They can increase your monthly premium substantially for the rest of your life.

That’s right — if you miss the window, the government can penalize you each month for as long as you have Medicare coverage.

It’s essential to understand your Medicare options and how these late enrollment penalties work so you can avoid costly premiums in retirement.

When Are You Supposed to Sign Up for Medicare?

You can only enroll in Medicare at certain times.

Your initial enrollment period is a seven-month window around your 65th birthday.

It begins three months before you turn 65 and extends three months after your birth month.

If you’re already receiving Social Security retirement benefits, you’re automatically enrolled in Medicare when you turn 65.

Some people choose to delay Medicare if they’re still working.

However, the best way to avoid Medicare late enrollment penalties is to sign up for coverage when you’re first eligible.

Medicare Part B Late Enrollment Penalty

Medicare Part B helps cover your doctor’s visits, preventative services, outpatient care, medical equipment and more.

If you don’t enroll in Medicare Part B during your initial open enrollment period, you’ll face a 10% penalty for each 12-month period you delayed enrollment.

Once you get hit with a Part B penalty, you’re usually stuck with it for as long as you have Medicare Part B. For most people, that’s the rest of their life.

Here’s an example.

• Let’s say you don’t sign up for Part B until four years after you’re first eligible.
• You’ll face a premium penalty equal to 40 percent of your premium in addition to your regular monthly payment.
• You’ll keep paying that higher amount for as long as you have Medicare Part B.

In 2022, the Part B premium is $170.10. If you waited four years to sign up, you’d owe…