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Medicare Late Enrollment Penalties
What are the Penalties for Late Enrollment?
There are three major penalties for late Medicare enrollment. There are different penalties for Part A, Part B, and Part D. Each has a different timeline and different financial penalty. We'll discuss them all below. Call 888-997-5204, or e-mail us for help.
Medicare Part A Penalty
If you don't sign up for Medicare Part A when you are first eligible, your cost may go up by 10%. The penalty will last twice as many years as you were eligible and did not sign up. If you have limited resources, the Florida Medicares Savings Programs may help.
Medicare Part B Penalty
If you don't enroll in Part B when first eligible, you'll pay a 10% penalty for every 12 months you could have had Part B and did not.
Part B Penalty Exceptions
If you have creditable coverage through some other source, you will not be subject to part B penalties. If you have limited resources or income, the state of Florida may help you pay for your coverage through various programs.
Medicare Part D Penalty
If you go 63 days in a row or more without prescription drug coverage through Medicare or some other "creditable" drug coverage, then you will pay the penalty. "Creditable" drug coverage means your alternative coverage (through work, union, spouse) must be at least as good as Medicare's coverage. You'll have to pay the penalty as long as you have Medicare prescription coverage.
How Much is the Part D Penalty?
The part D penalty is calculated multiplying 1% by (the number of months you didn't have Part D coverage) and then multiply by the "National Base Beneficiary Premium." The NBBP changes every year, and so will your penalty calculation. In 2021, the NBBP is $33.06.
For example, let's say you missed your initial enrollment period, and waited 24 months before you could get coverage. The penalty would be 1% * 24 Months * $33.06 = $7.93. This will always be rounded to the nearest $0.10, so the penalty would be $7.90 per month in 2021. When the NBBP changes in 2022, that penalty will be recalculated.
Part D Penalty Exceptions
There are 2 main exceptions. If you are getting "Extra Help," then you won't be paying the penalty. If you have "creditable" coverage as mentioned above, you will also not be subject to Part D penalties. If you don't agree with the penalty, you have 60 days to ask for reconsideration through your drug plan, and will usually get an answer within 90 days.