What Is the Penalty for Late Medicare Enrollment?

If you’re eyeing retirement, you probably know that you can enroll in Medicare when you turn 65 years of age. And you might have also heard that you could be penalized if you don’t enroll at 65. But is that always the case? Are there any exceptions? And what’s the penalty?

First of all, yes, it is correct that most people are required to enroll when they turn 65. But there are certain exceptions to this rule, and if you qualify, you won’t be penalized for enrolling later.

It depends on whether you’re still covered by an employer’s group healthcare plan, along with the size of your employer. If you or your spouse are still working, and the employer has more than 20 employees, then their group healthcare plan qualifies you for an exemption to Medicare enrollment. You don’t have to enroll in Medicare until you separate from that employer or otherwise lose coverage through their plan. You won’t be penalized for enrolling later.

On the other hand, you can still enroll in Medicare if you want to, and it will serve as a secondary insurance plan. You should weigh the benefits of the secondary coverage against the Part B premiums you will pay (Part A is free to almost everyone).

For those still employed with a company that has fewer than 20 employees, or those who have retired, Medicare enrollment at age 65 is still mandatory. If you don’t enroll on time, you will be charged a penalty in the amount of ten percent of your premium (added to the premium) for each year that you delay.

Those who worry about affording Medicare premiums should investigate their options through the Medicare Savings Program, which covers the cost of premiums for those who fall under certain income limits. Then you will also qualify for the Extra Help program, which offers assistance toward a Part D (prescription) plan.

If your 65th birthday is approaching, be sure to speak with one of our insurance brokers. Help with Medicare plans is always free, and our expertise can help you identify your enrollment window, compare different plans, and apply for assistance when needed.