When it comes to Medi­care, it’s all about tim­ing

Record Observer - - Senior Satellite -

Whether to sign up for Medi­care when you first be­come el­i­gi­ble is a very im­por­tant de­ci­sion. What a lot of folks don’t re­al­ize is that Medi­care Part A, Part B and Part D may have late en­roll­ment penal­ties if you de­cide to de­lay en­roll­ment.

Usu­ally, you first be­come el­i­gi­ble for Orig­i­nal Medi­care, Part A and Part B, when you turn 65. You have an Ini­tial En­roll­ment Pe­riod that starts three months be­fore you turn 65, in­cludes the month of your 65th birth­day, and ends three months later. Some peo­ple are el­i­gi­ble for Medi­care be­fore age 65 if they re­ceive dis­abil­ity ben­e­fits for more than two years or have amy­otrophic lat­eral scle­ro­sis or end-stage re­nal dis­ease.

For Medi­care Part D, you are first el­i­gi­ble to en­roll when you have Medi­care Part A and/or Part B. Most of the time, your Ini­tial En­roll­ment Pe­riod for Medi­care Part D will take place at the same time as your Ini­tial En­roll­ment Pe­riod for Orig­i­nal Medi­care Part A and Part B.

Late en­roll­ment penal­ties may ap­ply when you en­roll in Medi­care Part A, Part B, or Part D af­ter your Ini­tial En­roll­ment Pe­riod. How­ever, there are some sit­u­a­tions where you can de­lay en­roll­ment without fac­ing a penalty. Medi­care Part A Late En­roll­ment Penalty Most peo­ple get Medi­care Part A pre­mium free, if they have worked at least 10 years (40 quar­ters) and paid Medi­care taxes dur­ing that time. If you don’t have enough work his­tory, how­ever, you may have to pay a pre­mium for Medi­care Part A.

If you pay a pre­mium for Medi­care Part A, make sure you sign up when you’re first el­i­gi­ble or this amount could be higher. The Medi­care Part A late en­roll­ment penalty is a 10 per­cent higher pre­mium for twice the number of years that you were el­i­gi­ble, but didn’t sign up for Medi­care Part A. For ex­am­ple, if you were el­i­gi­ble for Medi­care Part A, but didn’t en­roll for two years, you will have to pay a higher pre­mium for four years (or twice the number of years that you were el­i­gi­ble for Part A, but went without it).

You may not have to pay this late en­roll­ment penalty if you de­layed en­roll­ment be­cause you had other health cov­er­age, such as through your em­ployer or through your spouse’s em­ployer. If you sign up dur­ing a Spe­cial En­roll­ment Pe­riod, you can avoid the Medi­care Part A penalty. Medi­care Part B Late

En­roll­ment Penalty Un­like Medi­care Part A, ev­ery­one pays a pre­mium for Medi­care Part B. But if you don’t sign up when you are first el­i­gi­ble and don’t have other health in­sur­ance, you could face a late en­roll­ment penalty. The Medi­care Part B late en­roll­ment penalty is a 10 per­cent higher pre­mium for each full 12-month pe­riod that you were el­i­gi­ble, but didn’t en­roll in Medi­care Part B. For ex­am­ple, let’s say your Ini­tial En­roll­ment Pe­riod ended Jan­uar y 15, 2015, but you waited un­til March 2017 dur­ing the Gen­eral En­roll­ment Pe­riod to en­roll. This pe­riod in­cludes two full 12-month pe­ri­ods, so your Medi­care Part B penalty would be 20 per­cent higher. Un­like Medi­care Part A, you may have to pay this higher pre­mium per­ma­nently for as long as you’re in Medi­care.

Once again, if you de­lay Medi­care Part B be­cause you’re still work­ing and have cov­er­age through your em­ployer or your spouse’s em­ployer, you may not have to pay a late en­roll­ment penalty if you sign up dur­ing your Spe­cial En­roll­ment Pe­riod.

Medi­care Part D Late En­roll­ment Penalty

The Medi­care Part D late en­roll­ment penalty may ap­ply if you don’t sign up when you are first el­i­gi­ble and don’t have other cred­itable pre­scrip­tion drug cov­er­age for 63 or more days in a row. Cred­itable pre­scrip­tion drug cov­er­age is other drug cov­er­age that is ex­pected to pay on av­er­age, as much as the stan­dard Medi­care Part D cov­er­age.

The Medi­care Part D penalty works dif­fer­ently and will de­pend on how long you went without cred­itable pre­scrip­tion drug cov­er­age. It’s cal­cu­lated by mul­ti­ply­ing 1 per­cent of the na­tional base ben­e­fi­ciary pre­mium ($35.63 in 2017) by the number of full months you were el­i­gi­ble for Medi­care Part D, but didn’t join and didn’t have cred­itable pre­scrip­tion drug cov­er­age. This number is rounded to the near­est 10 cents and added to your Medi­care Part D pre­mium. You may have to pay this penalty for as long as you have Medi­care Part D.

If you are in the Ex­tra Help (Low-In­come Sub­sidy) pro­gram, you won’t have to pay a late en­roll­ment penalty for Medi­care Part D.

To avoid the penalty, make sure your pre­scrip­tion cov­er­age is cred­itable if you’re not en­rolled in a Medi­care Part D Pre­scrip­tion Drug Plan. Your plan should no­tify you ev­ery year whether your cov­er­age is cred­itable.

A lot of folks think they are sav­ing money by go­ing without Medi­care pre­scrip­tion drug cov­er­age, es­pe­cially if they only take a few med­i­ca­tions. How­ever, your costs may end up be­ing higher in the long run if you get sick and need to pay the full cost for pre­scrip­tion drugs. Also, re­mem­ber that your late en­roll­ment penalty in­creases the longer you wait to en­roll. If you don’t have other cred­itable pre­scrip­tion drug cov­er­age, you might con­sider sign­ing up for a ba­sic, lower-cost Medi­care Part D Pre­scrip­tion Drug Plan.

Mike Zimmer is Pres­i­dent of Bay State In­sur­ance Agency Ltd. in Centreville. He is avail­able to an­swer your ques­tions or speak to your groups re­gard­ing Medi­care, Medi­care Ad­van­tage, Medi­care Sup­ple­ments and Medi­care Part D (Pre­scrip­tion Plans) He may be reached at 410-758-1680.

MIKE ZIMMER

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