Illinois seniors delight in learning how much Medicare can help with the rising costs of healthcare. Controlling chronic pain or debilitating disease, even paying for routine doctor’s visits can be challenging, and it’s good to know help is available. However, if you’re not careful about the details, you could be penalized. And that means you’ll end up paying more money out-of-pocket. Here’s what you need to know about Part B penalties, and how to avoid paying late enrollment fees.
Part B Late Enrollment
Typically, the best time to join Medicare Part B is when you are first eligible, during your Initial Enrollment Period. Unfortunately, if you don’t sign up at this time, when you do join, you will be responsible for paying a penalty for each 12 month period you could have had Part B, but didn’t sign up for it. A 10 percent penalty will be reflected in your monthly premium, and will continue every month for as long as you receive Part B benefits.
The good news is, there are some instances where it is okay to delay enrollment in Medicare Part B. If you have insurance through an employer or a spouse, you may delay enrollment without paying a penalty. Also, if you qualify for a Special Enrollment Period, you may not be responsible for paying a Part B late enrollment penalty. However, if you are subject to the penalty, in addition to a premium increase, you may have to wait until January (General Enrollment Period) to enroll for coverage that begins in July.
Calculating Your Part B Penalty
No one wants to pay a penalty, but if you have to, it makes sense to understand how it is calculated. While the monthly premium rate for Part B benefits is based on your income, the penalty is calculated using the standard Part B premium of $144.60. Here’s how to calculate your Part B penalty:
Multiply the number of years you were not covered, but eligible by 10 percent. Then multiply that number by the standard premium rate of $144.60. Finally, add that sum to the standard premium rate for your new monthly premium rate.
Remember, it is ultimately your responsibility to know the Illinois Medicare Enrollment Periods, so as not to incur a Part B penalty. However, if you miss the deadline, know that the 10 percent penalty is only imposed for each “full 12-month period”. That means if your deadline is August and you enroll in February (the delay is less than 12 months) the penalty should not apply.