First Key facts about Medicare
Posted in Medicare key facts last updated on September 13, 2022
Key facts about Medicare; When to apply for Medicare?
Do you know when you can start to apply for your Original Medicare?
The first scenario is when you turn age 65. That is also called your Initial Enrollment Period (IEP). You have 7 months long to sign up. Your birthday month, three months before your birthday and three months after your birthday PLUS You’re a U.S. citizen or a legal resident who has lived in the U.S. for at least FIVE consecutive years.
2nd scenario that you will qualify to get your Original Medicare is on your 25th month of getting disability benefits. You don’t need to be age 65 for this 2nd scenario.
Initial Enrollment Period (IEP) is your first chance to enroll in Original Medicare and (if needed) you can choose to add on additional coverage like Medicare Supplement plans, Medicare Part D (Prescription drug coverage) plans or Medicare Advantage plans. This additional coverage is offered by private insurance companies.
You will be automatically enrolled in Original Medicare (Part A and Part B) if you are receiving Railroad Retirement Board benefits or Social Security benefits when you become eligible for Medicare. If not you must enroll yourself.
For more information please visit https://www.ssa.gov/benefits/medicare/
Medicare Part A, Part B and Part D (Prescription drug coverage) may charge penalties if you sign up after the Initial Enrollment Period (IEP) ends, unless you qualify for a Special Enrollment Period.
Special Enrollment Period:
Depend on certain situations, you may be able to enroll in a Medicare plan outside of the IEP (Initial Enrollment Period) or Annual enrollment time frames. Some ways you may qualify for a Special Enrollment Period are if you:
⦁ Move out of the plan’s service area.
⦁ Have been diagnosed with certain qualifying chronic health conditions.
⦁ Retire and lose your employer coverage.
⦁ Qualify for Extra Help.
⦁ Special needs plans have other eligibility requirements.
For more Special Enrollment Period please visit https://www.medicare.gov/sign-up-change-plans/when-can-i-join-a-health-or-drug-plan/special-circumstances-special-enrollment-periods
Medicare LATE enrollment penalty:
Part A late enrollment penalty:
Some people have to buy Part A because they don’t qualify for premium-free Part A. If you have to buy Part A, and you don’t buy it when you’re first eligible for Medicare, your monthly premium may go up 10%. You’ll have to pay the higher premium for twice the number of years you didn’t sign up.
Example:
If you were eligible for Part A for 3 years but didn’t sign up. You will have to pay the higher premium for 6 years. Usually, you don’t have to pay a penalty if you meet certain conditions that allow you to sign up for Part A during a Special Enrollment Period.
Your state may help you pay for Part A, and/or Part B if you have limited income and resources. You may also qualify for Extra Help to pay for your Part D (Prescription drug) coverage.
Part B late enrollment penalty:
If you didn’t get Part B when you’re first eligible, your monthly premium may go up 10% for each 12-month period you could’ve had Part B, but didn’t sign up. In most cases, you’ll have to pay this penalty each time you pay your premiums, for as long as you have Part B. And, the penalty increases the longer you go without Part B coverage.
Usually, you don’t pay for a late enrollment penalty if you meet certain condition that allows you to sign up for Part B during a Special Enrollment Period. One most common Special Enrollment period is your employer-provided you with creditable group health coverage. Therefore, you do not need to activate your Part B at that time.
Remember, you will need to activate your Part B ASAP once you stop working or lose your current employer group coverage. You do have 8 months to enroll in Medicare once you stop working or your employer’s creditable coverage ends (whichever happens first).
Your state may help you pay for Part A, and/or Part B if you have limited income and resources. You may also qualify for Extra Help to pay for your Part D (Prescription drug) coverage.
Sample Calculation of Part B Late enrollment penalty:
Your Initial Enrollment Period ended in December 2016. You waited to sign up for Part B until March 2019 during the General Enrollment Period. Your coverage starts July 1, 2019. Your Part B premium penalty is 20% of the standard premium, and you’ll have to pay this penalty for as long as you have Part B. (Even though you weren’t covered for a total of 27 months, this included only 2 full 12-month periods.)
Part D late enrollment penalty:
This Part D enrollment penalty amount is permanently added to your Medicare drug coverage premium. You may get a late enrollment penalty if at any time after your Initial Enrollment Period (7 months, three months before birthday, your birthday month, and three months after birthday) is over, there’s a period of 63 or more days in a row when you don’t have Medicare drug coverage or other creditable prescription drug coverage. You’ll generally have to pay the penalty for as long as you have Medicare drug coverage.
How much is the 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 calculates the penalty by multiplying 1% of the “national base beneficiary premium” ($33.06 in 2021) 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.
The national base beneficiary premium may change each year, so your penalty amount may also change each year.
Example of Part D late enrollment calculation:
Mrs. Hernandez is currently eligible for Medicare, and her Initial Enrollment Period ended on May 31, 2017. She doesn’t have prescription drug coverage from any other source. She didn’t join by May 31, 2017, and instead joined during the Open Enrollment Period that ended December 7, 2019. Her drug coverage was effective January 1, 2020.
2021
Since Mrs. Hernandez was without creditable prescription drug coverage from June 2017–December 2019, her penalty in 2021 was 31% (1% for each of the 31 months she didn’t have coverage) of $33.06 (the national base beneficiary premium for 2021), or $10.25 each month. Since the monthly penalty is always rounded to the nearest $0.10, she pays $10.30 each month in addition to her plan’s monthly premium.
Here’s the math:
.31 (31% penalty) × $33.06 (2021 base beneficiary premium) = $10.25
$10.25 rounded to the nearest $0.10 = $10.30
$10.30 = Mrs. Hernandez’s monthly late enrollment penalty for 2021
Definition of creditable prescription drug coverage = Prescription drug coverage (for example, from an employer or union) that’s expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage. People who have this kind of coverage when they become eligible for Medicare can generally keep that coverage without paying a penalty if they decide to enroll in Medicare prescription drug coverage later.
What if you don’t agree with the late enrollment penalty?
You may be able to ask for a “reconsideration.” Your drug plan will send information about how to request a reconsideration.
Complete the form, and return it to the address or fax number listed on the form. You must do this within 60 days from the date on the letter telling you that you owe a late enrollment penalty. Also send any proof that supports your case, like a copy of your notice of creditable prescription drug coverage from an employer or union plan.
IN CONCLUSION:
DON’T BE LATE! On this page, we will touch on some basic ideas of when you can start to apply for your Medicare health insurance? Who qualifies to apply for a Medicare health plan? What is the Initial Enrollment Period time frame you have to apply for Medicare? What qualified as the Special Enrollment Period? If you do not fall into the Special Enrollment Period, Medicare Part A, Part B, and Part D will charge you penalties if you sign up LATE. Here you can also find the Medicare penalty calculation for Part A, Part B, and Part D.
Lastly, do you know that each year there is also an Annual Enrollment Period and for people that have a Medicare Advantage plan; there is also a Medicare Advantage Open Enrollment Period?
Feel free to ask if questions. Thank you.