Most eligible Medicare Beneficiaries meet enrollment date requirements in Part B and Part D by either a voluntary or involuntary benefit election based on one of these likely triggers: eligibility prior to 65 after receiving SSDI for 24 months, turning 65 (aging in described below) or at a later date because the individual had other credible coverage in place beyond 65.
Two examples of credible coverage are Employer Group coverage and VA benefits. However, I routinely find that some Medicare Beneficiaries have subjected themselves to late enrollment penalties because of a gap in credible medical or prescription drug coverage.
Important Dates
Medicare Beneficiaries become eligible for Part A Hospital, Part B Medical and Part D Prescription Drug coverage on the first day of the birth month in which he/she turns 65.
This is commonly referred to as your aging in date. In the event your birthday falls on the 1st, your eligibility starts on the 1st of the preceding month. Since Part A is normally free to those that have met the 40 quarter requirement, the effective date usually coincides with the 1st as described above.
If drawing your social security at 65 or earlier, you can expect to receive a Medicare card showing automatic enrollment in Part B with the same effective date as Part A.
The monthly cost of Part B is $121.80 for most retirees.
Part B Penalty
If you don’t sign up for Part B when you’re first eligible due to disability, aging in or termination of credible coverage, you’ll have to pay a late enrollment penalty once enrolled in Part B.
Your monthly premium for Part B may go up 10% for each full 12-month period that you could have had Part B, but didn’t sign up for it. Also, you may have to wait until the General Enrollment Period (from January 1 to March 31) to enroll in Part B and coverage will start July 1st, of that year.
Part D Penalty
The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage. Medicare Advantage plans typically include credible Part D drug coverage.
The penalty is 1% for every month you were eligible but lacked enrollment. In 2016, the Part D penalty is calculated by multiplying 1% of the “national base beneficiary premium” ($34.10 in 2016) times the number of full, uncovered months you didn’t have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium. As the national base beneficiary premium increases each year, your penalty amount may also increase each year.
Solution
Confused? Don’t hesitate to contact your representative or if you don’t have one, call Steve Reiser.
Steven Reiser is a CFP® licensed and certified independent insurance agency, Senior Benefits Solutions, representing multiple Medicare Advantage, Medicare Supplement and Part D companies in Florida. If you feel you have mistakenly overlooked these enrollment requirements or desire a review of your current Medicare benefits, please don’t hesitate to call or email me (813) 215 6038 or bigrise10@gmail.com.
By Steve Reiser, CFP®