Once you are eligible for Medicare, you will find that there are several enrollment periods you can make use of. However, only one enrollment period will benefit you most when you first become eligible, and that is the Initial Enrollment Period. This is a seven-month period that begins three months before your 65th birthday and ends three months after your birthday.
We highly recommend that you take advantage of your Initial Enrollment Period when you become eligible because you may face late enrollment penalties if you choose to delay your enrollment.
Who is Eligible for Medicare?
Before you can even enroll in Medicare, you must first be eligible. Medicare is generally for those 65 or older, younger than 65 with a disability, or those with End-Stage Renal Disease (kidney failure that requires dialysis or a transplant). You must also be a U.S. citizen or permanent legal resident of at least five years.
You can be eligible and automatically enrolled for premium-free Part A if you are 65 or older and if you or your spouse paid Medicare taxes and worked for ten years. You can also get premium-free Part A if:
- You get retirement benefits from the Railroad Retirement Board or Social Security
- You are eligible to get benefits from the Railroad Retirement Board or Social Security, but you have yet to file for them
- You had Medicare-covered government employment
- Your spouse had Medicare-covered government employment
If you are under 65, you can still qualify for premium-free Part A if:
- You have been getting disability benefits from the Railroad Retirement Board or Social Security for at least 24 months (your Medicare benefits will begin the first month you start receiving disability benefits if you have Lou Gherig’s Disease, also known as ALS)
- You need kidney dialysis or a transplant
If you are not automatically enrolled, you can manually enroll in Part A and B during your Initial Enrollment Period.
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Late Enrollment Penalties
While Part A is premium-free for most beneficiaries, some beneficiaries do have to manually enroll. If you delay your enrollment in Part A, your monthly premium can increase by 10%. This penalty will remain in effect for twice the number of years you did not sign up for Part A. For example, if you were eligible for Part A for five years but did not enroll, you will have to pay the penalty for ten years.
The Part B penalty is different from Part A. Your premium will go up 10% for every 12 months you did not enroll in Part B but were eligible for it. This penalty is typically permanent and will last for as long as you have Part B coverage.
The penalty for Part D depends on how long you did not have Part D or other prescription drug coverage. The penalty is calculated by multiplying 1% of the national premium ($33.06 for 2021) by the number of months you did not have drug coverage. This number is then rounded to the nearest $0.10 and added to the Part D premium. Keep in mind that the premium can change each year, which will also cause your penalty to change.
The only way to avoid these penalties is if you qualify for a Special Enrollment Period.
If you’re wondering what the next steps are in your Medicare enrollment process, it can be helpful to reach out to a professional. Our team at Midwest Trusted Benefit has been trained in many different areas and can find the best coverage for all of our clients.
Reach out to us today by calling 402-740-5505.