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Putting off Part B Enrollment Can Be a Mistake

Those approaching age 65 and getting ready to enroll in Medicare get all kinds of “good” advice about Medicare. Sometimes that good advice can turn bad. Here’s a mishap waiting to happen. 

I will turn 65 in a few months. I am retired and have health care through my union. My friend said I should enroll in Medicare Part A and that‘s what I’m going to do. It’s free and might pay some of the costs my union plan doesn’t cover. And I don’t have to pay the Part B premium, a big cost savings.

This retired union worker better put some of that money he’ll be saving into a “penalty” account. If he enrolls in Part A only, the clock starts ticking on the Part B Late Enrollment Penalty. That’s because he could lose his right to a Special Enrollment Period (SEP) for Part B. This SEP allows one to enroll in Part B without penalty or delay. There are two important criteria for this enrollment opportunity.

  • Since age 65, the individual has had coverage through a group health insurance plan based upon the current employment of that person or his/her spouse. 
  • The coverage has been continuous with no gaps of eight months or longer.

That means, insurance provided by a union after retirement is not based upon current employment. No one is still working. If this man delays enrollment in Part B for a full 12 months, he will face a Medicare penalty of 10% of the standard Part B premium added to his monthly Part B bill for the rest of his Medicare life. The penalty in 2023 is an additional $16.49 every month. 

Also, he will not be able to enroll in Medicare until the General Enrollment Period, January 1-March 31 and the coverage will take effect the first day of month after enrolling. 

Bottom line: Any individual who has retiree (through a former employer or union), individual, veteran, or COBRA coverage must enroll in both Parts A and B or face a late enrollment penalty, along with not being able to enroll in Part B until the General Enrollment Period.  

Another mishap: There's a good chance that a person who is late enrolling in Part B may also put off Part D prescription drug coverage. If that happens, there is a Part D late enrollment penalty. Like with Part B, this penalty changes every year and follows the beneficiary for life. In 2023, the penalty is an additional $.0327 for every month enrollment was delayed. 

Last updated: 12-06-2022