Avoiding Costly Medicare Penalties: What Not to Miss

Medicare penalties can significantly impact your healthcare budget. Let’s break down the most common penalties and how to avoid them.

Part B Late Enrollment Penalty

How It Works:

• 10% increase for each 12-month period you delay enrollment
• Lifetime penalty that never goes away
• Added to your monthly Part B premium

Example:

Initial Enrollment Period: July 2024
Delayed Enrollment: July 2027
Result: 30% penalty on Part B premium

Action Tips:

• Enroll during your Initial Enrollment Period (3 months before to 3 months after your 65th birthday)
• Keep proof of creditable coverage if delaying enrollment
• Document your employment status if working past 65

Part D Late Enrollment Penalty

How It Works:

• 1% of national base premium for each month without coverage
• Lifetime penalty that never goes away
• Added to your monthly Part D premium

Example:

National Base Premium: $34.70 (2024)
12 months without coverage = 12% penalty
Monthly penalty: $4.16

Action Tips:

• Enroll in Part D when first eligible
• Maintain creditable coverage if delaying enrollment
• Keep records of all prescription coverage

Understanding Creditable Coverage

What Counts as Creditable Coverage:

• Employer/union group health plan
• TRICARE
• Veterans’ benefits
• COBRA coverage
• Individual health insurance

Action Tips:

• Get written confirmation of creditable coverage
• Keep records for at least 5 years
• Request new proof annually

Special Enrollment Periods

When You Can Enroll Late Without Penalty:

1. Working Past 65:

   • Enroll within 8 months of losing employer coverage
   • Keep proof of employment and coverage

2. Moving to a New Area:

   • Enroll within 2 months of moving
   • Document your move with proof of address

3. Losing Other Coverage:

   • Enroll within 2 months of coverage loss
   • Keep termination notices

Common Penalty Triggers to Avoid

Part B Triggers:

• Missing Initial Enrollment Period
• Not having creditable coverage
• Delaying enrollment without proper documentation

Part D Triggers:

• Going 63+ days without coverage
• Not maintaining creditable coverage
• Missing Special Enrollment Periods

How to Fix Penalties

If You Already Have Penalties:

1. Documentation Review:

   • Gather proof of creditable coverage
   • Collect employment records
   • Prepare appeal documentation

2. Appeal Process:

   • File appeal within 60 days
   • Provide supporting documentation
   • Follow up on appeal status

Need Help Avoiding Penalties?

At MedStar Insurance Agency, we can help you:

• Review your enrollment timeline
• Document creditable coverage
• File appeals for existing penalties
• Plan your Medicare strategy
• Navigate Special Enrollment Periods

Contact us today to get personalized help avoiding Medicare penalties!

Remember: Medicare penalties are permanent and can significantly impact your healthcare budget. Proper planning and documentation are key to avoiding them!