You may be charged a late-enrollment penalty by the various parts of Medicare if you don’t enroll in coverage during the period where you are first eligible.

Medicare Part A late-enrollment penalty

Medicare Part A is hospital insurance. Medicare Part A also covers skilled nursing and hospice care. Many people don’t need to worry about a Medicare Part A late-enrollment penalty since they’re automatically signed up when they become eligible.

If you’re already receiving Social Security benefits when you turn 65 (or qualify for Medicare before age 65 due to disability), you’ll typically be enrolled in Medicare when you become eligible. Read more about Medicare enrollment periods.

Many people are also eligible for premium-free Part A if you are receiving retirement benefits from Social Security or the Railroad Retirement board. You’re also generally eligible for premium-free Part A if you paid Medicare taxes while working for 40 quarters. However, if you aren’t eligible for premium-free Part A, and you don’t buy it when you’re first eligible, your monthly premium may go up 10%. The fee may not apply for your whole life, but you’ll generally have to pay the higher premium for twice the number of years you could have had Part A, but didn’t sign up. For example, if you delayed enrolling in Medicare until you were 67 (two years) you’ll probably have to pay the late-enrollment penalty until you are 71 (four years).

Medicare Part B late-enrollment penalty

Medicare Part B is medical insurance. Medicare Part B may cover other services, such as ambulance transportation and durable medical equipment. You generally don’t have to worry about a Medicare Part B late-enrollment penalty since you will be automatically enrolled in Medicare Part B when you turn 65 if you are receiving Social Security benefits. Unlike Medicare Part A, generally everyone has to pay a Medicare Part B premium. If you don’t sign up for Medicare Part B when you’re first eligible you may have to pay a late-enrollment penalty. This penalty is a 10% monthly premium increase for each full 12-month period that you were eligible for Medicare Part B but didn’t have it. You’ll have to pay this penalty for as long as you have Part B. Also, you may have to wait until the General Enrollment Period (from January 1 to March 31) to enroll in Part B. Coverage will start July 1 of that year.

Medicare Part D late-enrollment penalty

Medicare Part D is prescription drug coverage. You can get Part D through a stand-alone Prescription Drug Plan or a Medicare Advantage plan with prescription drug coverage. You may pay a late-enrollment penalty in addition to your monthly premium if you go for a continuous period of 63 days or more after your Initial Enrollment Period is over without creditable prescription drug coverage or Medicare prescription drug coverage. Creditable prescription drug coverage could be from an employer and must be at least as good as Medicare coverage. The Initial Enrollment Period begins three months before you turn 65, includes the month of your 65th birthday, and extends three months after you turn 65. Medicare calculates the Part D late-enrollment penalty by multiplying 1% of the “national base beneficiary premium” ($32.74 in 2020) 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.

Medicare Part C late-enrollment penalty

Medicare Part C, also called Medicare Advantage, is an alternative way to get your Medicare benefits. Medicare Part C is offered through private insurance companies and there is no late-enrollment penalty.

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