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. 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 $170.10 for 2022.
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 $170.10. 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.
9 to 12 months before you turn 65
Confirm that you are eligible to receive Medicare benefits by calling the Social Security Administration at 800.772.1213.
Review your current health insurance policy to find out what happens with that coverage when you turn 65.
Research options for coverage to help protect yourself from costs not included in Medicare coverage
4 to 8 months before you turn 65
Ask your doctor if they accept Medicare or participate with other Medicare plans.
Sign-up for coverage to help protect yourself from costs not included in Medicare coverage.
1 to 3 months before you turn 65
Enroll in Medicare Parts A and B – if you do not receive your automatic enrollment information in the mail, contact the Social Security Administration at 800.772.1213.
Sign up for Social Security if you have decided to take early Social Security benefits (Note: it usually takes three months after you sign up before you begin receiving benefits).
If your spouse and/or dependent are covered under your employer’s plan, make arrangements for him or her to have coverage after you have Medicare.
Happy 65th Birthday!
If you have not received your Medicare card in the mail, call the Social Security Administration at 800.772.1213.
Make sure your physician’s office has a copy of your Medicare Card and any supplement plan you may have signed up for.
Like most Illinois seniors, there’s a good chance you’ve heard of Medicare – you may even know that it’s a federally funded health insurance program. But if you’re not enrolled, you may not understand in detail the different parts of the program and how they work together to provide health insurance coverage. If you’re approaching the age of 65 and interested in learning more about Illinois Medicare Part A and Part B, here’s some information to get you started.
What Is Medicare Part A – Hospital Insurance
Medicare coverage is divided into several parts, which are differentiated by letters of the alphabet. Medicare Part A is one of the basics, providing hospitalization coverage, including hospital stay, skilled nursing facility care, home health care (skilled nursing, physical therapy), and hospice care. For most people, Medicare Part A is premium-free, meaning there is no charge for coverage as long as you meet a few basic eligibility requirements.
Generally, as long as you are a permanent resident of the United States and you or a spouse paid Social Security taxes while employed, enrollment is automatic. While Medicare Part A is free, there are deductibles and co-insurance that you are responsible for paying.
What Is Medicare Part B – Medical Expenses
Medicare Part B covers expenses that are medically necessary to treat or prevent a disease or condition. Other fees that occur outside of room and board while in the hospital – those related to diagnostic testing, preventative care, and the supplies needed to diagnose or treat medical conditions. Fees for visiting the doctor are also included in Medicare Part B. Medicare Part B pays 80 percent of approved charges. Part B is not premium-free.
The standard Part B premium amount in 2022 is $170.10 (or higher depending on your income). However, most people who get Social Security benefits pay less than this amount. If you pay your Part B premium through your monthly Social Security benefit, you’ll pay less. Social Security will tell you the exact amount you’ll pay for Part B in 2022.
Often, seniors choose to enroll in Original Medicare when they are first eligible, at age 65, during their Initial Enrollment Period. However, you are not required to, and many don’t. If you are eligible to receive Social Security benefits, then Medicare Part A is free, but Part B carries a premium. Working seniors often delay Medicare enrollment until retirement, preferring to rely on group health coverage offered through work. If you’re past 65, getting ready to retire, and not enrolled in Part A or Part B, you may be wondering what to do next. Here is some good advice.
Getting Medicare Part A and Part B After Age 65
Part A – You can sign up anytime after Initial Enrollment
As long as you receive Social Security benefits, Medicare Part A (hospital coverage) is free, and there are no restrictions on when you can sign up. While many people join during Initial Enrollment, if you didn’t, that’s okay. You can enroll in Part A anytime during or after your Initial Enrollment period without penalty.
Part B – A Special Enrollment Period may be available
If you’re over 65 without Part B coverage, there is some good news. When you retire and your employer-provided benefits come to an end, you may be entitled to a Special Enrollment Period—an 8-month period of time when you can sign up for Medicare Part B without paying a penalty. This Special Enrollment Period starts at the end of the month you stop working or lose employer insurance, whichever comes first.
To be eligible for a Special Enrollment, your company must have at least 20 employees. If they do not, then you will need to enroll in Part B during General Enrollment. And you may pay an increased premium— a lifetime late enrollment penalty for each 12-month period of time you were eligible, but did not enroll in Part B.
If You’re Retiring, But Your Spouse Is Not
If you didn’t sign up for Part B because you had group health coverage from an employer, that’s okay. Now that you are planning to retire, the same Special Enrollment applies and both you and your spouse will have a full 8 months to enroll in Medicare Part B without paying a penalty.
If you retire but will be gaining group health benefits from your spouse, then you will still be covered under what Medicare defines as “current employment” and you do not need to enroll in Medicare Part B. Note: Medicare does not classify COBRA and retiree benefits as current employment, and you will not be eligible for a Special Enrollment Period when you choose to enroll. If you are planning on taking retiree coverage from a former employer, you should enroll in Part A and Part B.
https://www.cms.gov/Outreach-and-Education/Find-Your-Provider-Type/Employers-and-Unions/FS4-Medicare-for-people-over-65-nearing-retirment.pdf page 2, 3, 4
If you’re looking to secure a Medicare-approved health care plan, do you know when you are eligible to enroll? Take a few minutes to understand your Medicare enrollment period, and avoid missing your deadline, or having to pay a penalty.
When You First Join Medicare – Initial Enrollment Period
At the age of 65, most individuals are automatically enrolled in Medicare Part A and Part B. As long as you are eligible to receive Social Security or Railroad Retirement Board benefits, you qualify for Medicare coverage. Everyone who has worked for at least 10 years will receive Part A benefits premium-free. You do not need to do anything at all and you will automatically be enrolled in Medicare Part A coverage.
However, Part B is not premium free and you will need to pay monthly. Like Part A, enrollment is automatic – if you choose not to accept Part B coverage, you can “opt-out”. If you are still working at age 65 and receive employer-sponsored health care, you may still enroll in Part B coverage and would need to sign up during your Initial Enrollment Period. If you choose to continue receiving coverage through work, it is acceptable to delay enrollment in Part B benefits. In this case, there is a Special Enrollment Period that typically begins when employer-based coverage ends.
Medicare Enrollment Periods
Initial Enrollment Period:
Medicare offers those who are turning 65 a 7-month period of time to enroll called the Initial Enrollment Period. Initial Enrollment begins three months prior to your 65th birthday and ends three months after you turn 65.
General Enrollment Period:
For those who miss the Initial Enrollment Period, there is a General Enrollment Period, which extends from January 1st through March 31st each year. Keep in mind, enrollment begins on January 1st for coverage that begins on July 1st.
Open Enrollment Period:
Changes can be made during this period to switch from a Medicare Advantage Plan to Original Medicare plus a Part D Plan or to switch from one Medicare Advantage Plan to another. This period is from January 1st to March 31st. Plan changes take effect the month after it is submitted.
Special Enrollment Periods:
Special Enrollment Periods are available for people to join who are undergoing special life events or circumstances that make it difficult to enroll during designated enrollment periods.
Making Changes to Your Medicare Coverage
Medicare realizes that sometimes people want to change their Medicare plan. An Annual Election Period is available from October 15th through December 7th. During this time, anyone is entitled to do the following:
If you receive Original Medicare:
Leave Original Medicare for a Medicare Advantage plan (with or without prescription drug coverage)
Join or drop Medicare Prescription Drug coverage
Switch between Medicare Prescription Drug plans
If you are enrolled in Medicare Advantage:
Switch to Original Medicare
Switch between Medicare Advantage plans with prescription drug coverage
Switch between Medicare Advantage plans without prescription drug coverage
With all changes to your Medicare plan, as long as your enrollment request is made by December 7th, new coverage begins January 1st of the following year.