When you’re first eligible for Medicare, you have a 7-month Initial Enrollment Period to enroll in Medicare. It that begins 3 months before you turn age 65, or, in the case of disability, 3 months before your 25th month of disability. If you don’t buy Medicare when you are first eligible, you may be a subject for Late Enrollment Penalty.
You can sign up anytime during the Initial Enrollment Period. If you sign up for Part A and/or Part B during the first 3 months of your Initial Enrollment Period, your coverage will start in most cases the first day of your birthday month. However, by waiting until you are 65 or older, your Medicare coverage will be delayed.
If you didn’t sign up for Part A and/or Part B (for which you must pay premiums) when you were first eligible, and you aren’t eligible for a Special Enrollment Period, you can sign up during the General Enrollment Period between January 1–March 31 each year. Your coverage will start July 1. You may have to pay a late enrollment penalty: higher premium for late enrollment in Part A and/or a higher premium to a late enrollment in Part B.
Why people delay their Medicare?
The major reasons why people delay their Medicare are different for Part A and Part B.
Most people with Medicare get their hospital insurance (Part A) premium free. But if you have not paid enough quarters of Medicare taxes, you will have to pay a monthly premium for Part A. Everyone has to pay a monthly premium for their medical insurance (Part B) – $134.00 each month if your annual income is below $85,000 ($170,000 for couples).
For Part A, each month (in 2018) you will pay:
- Nothing if you or your spouse worked and paid Medicare taxes for 10 years or more in the U.S.
- $232 if you or your spouse worked and paid Medicare taxes between 7.5 and 10 years in the U.S.
- $422 if you or your spouse worked and paid Medicare taxes for less than 7.5 years in the U.S.
Therefore, people without enough work history (less than 10 years) do not enroll in Part A. As far as Part B is concerned, people delay enrollment in Part B, as long as they have additional coverage, such as group health plan based on current employment.
Special Enrollment Period
Once your Initial Enrollment Period ends, you may have the chance to sign up for Medicare during a Special Enrollment Period. If you’re covered under a group health plan based on current employment, you have a Special Enrollment Period to sign up for Part A and/or Part B any time as long as you or your spouse (or family member if you’re disabled) is working, and you’re covered by a group health plan through the employer or union based on that work. You also have an 8-month Special Enrollment Period to sign up for Part A and/or Part B that starts the month after the employment ends or the group health plan insurance based on current employment ends, whichever happens first. Usually, you don’t pay a late enrollment penalty if you sign up during a Special Enrollment Period.
Part A delayed enrollment and late enrollment penalty
When to enroll
- You can sign up for free Part A (if you’re eligible) any time during or after your Initial Enrollment Period starts. Your coverage start date will depend on when you sign up.
- If you have to buy Part A, you can only sign up during a valid enrollment period, such as Special Enrollment Period (if you are entitled) or General Enrollment Period.
Late Enrollment Penalty
- If you are eligible for premium-free Part A, and you didn’t buy it when you’re first eligible, your monthly premium may go up 10%. You’ll have to pay the higher premium for twice the number of years you could have had Part A, but didn’t sign up.
You don’t have to pay a penalty if you are enrolled during a Special Enrollment Period
Part B delayed enrollment and late enrollment penalty
When to enroll
- You can only sign up during a valid enrollment period, such as Special Enrollment Period (if you are entitled) or General Enrollment Period.
Late Enrollment Penalty
- If you don’t sign up for Part B when you’re first eligible, you’ll have to pay a late enrollment penalty for as long as you have Part B. Your monthly premium for Part B may go up 10% for each full 12-month period that you could have had Part B, but didn’t sign up for it.
- You don’t have to pay a penalty if you are enrolled during a Special Enrollment Period
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