Missing your Initial Enrollment Period can be costly.
You have many decisions to make when you first become eligible for Medicare. It's important to know the consequences of your choices.
Medicare Part A, Part B and Part D all may charge premium penalties if you miss your initial enrollment dates unless you qualify for a Special Election Period .
Part A premium penalty
You will not generally have a Part A premium cost if you or your spouse worked and paid taxes for at least ten years.
If you have to pay a premium, the penalty for late enrollment is 10% of the Part A premium.
You would have to pay this premium penalty for twice the number of years you delayed enrollment. If you wait two years, for example, you would pay the 10% premium penalty for four years (2 x 2 years). The penalty applies no matter how long you delay Part A enrollment.
Part B premium penalty
The penalty for late enrollment in Medicare Part B is an additional 10% of the Part B premium for every 12-month period that you delay enrollment. Say your Initial Enrollment Period ended September 30, 2010, for example, and you enroll in Part B during the General Enrollment Period in March 2013. In this case, your penalty would be 20% (2 x 10% of the Part B premium). You waited 30 months to sign up, but that included only two full 12-month periods.
In most cases, you have to pay the Part B penalty every month for as long as you have Part B. If you're under 65 and disabled, any Part B penalty ends once you turn 65.
Part D premium penalty
The penalty for late enrollment in a Part D plan is 1% of the average Part D premium for each month you delay enrollment. You pay the penalty for as long as you're enrolled in a Medicare Part D plan.
You may delay enrolling in Medicare Part D without penalty if you qualify for Extra Help or have creditable coverage . If it's been more than 63 days since you’ve had creditable coverage, then the penalty may apply.
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