Alexandria, VA (February 6, 2012) Are you age 65 or older? Have you signed up for Medicare Part B yet? Skipping Medicare enrollment, because it seems less expensive to go with employer coverage by taking either retiree medical benefits or with COBRA, could be a costly mistake. A growing number of older adults are getting hit with Medicare late enrollment penalties, warns The Seniors Citizens League (TSCL), one of the nation's largest nonpartisan seniors groups. "Any senior over 65 who has not signed up for Medicare Part B should take time NOW to review his or her health insurance coverage, and double-check the Medicare enrollment rules," says TSCL Chairman Larry Hyland. Medicare's annual General Enrollment Period is going on now.
The General Enrollment Period runs from January 1 through March 31 annually. Medicare allows seniors who are still working AND who get health insurance benefits through large employers, (who have at least 20 employees) to postpone enrollment without penalty. But when employment ends, or if the employer drops health insurance, seniors have only 8 months to enroll in Medicare and still avoid a penalty. Seniors who misunderstand the rules and miss their deadline can wind up without coverage, because retiree health plans and COBRA only pay for the expenses that Part B does not. Once you do sign up, coverage still won't become effective until July 1, 2012.
"Unlike a tax penalty that you pay just once, Medicare late enrollment penalties are life long," Hyland notes. "You pay a penalty on the affected Medicare premium every year as long as you remain enrolled in Medicare - that could mean 30 years," he points out. "The amount that seniors pay increases two ways," says Hyland. "It grows bigger the longer a person puts off signing up. And, because it's based on a percentage of the Medicare premium, the amount climbs along with the premium," he adds. The penalty for Part B grows 10% for each year you delay signing up, and the penalty for Part D is 1% of the national base Part D premium, for every month you're not covered. Here are examples of how they work from the 2012 Medicare & You handbook:
* Part B penalty: Mr. Smith's initial enrollment period ended September 30, 2008. He waited to sign up for Part B until the General Enrollment Period in March 2011. His Part B premium penalty is 20%. (While Mr. Smith waited a total of 30 months to sign up, this included only two full 12-month periods.) A TSCL analysis found that a 30-month delay would cost Mr. Smith an estimated $2,905 in extra premiums over the next ten years.
* Part D penalty: Mrs. Jones didn't join when she was first eligible- by May 15, 2007. She joined a Medicare drug plan with an effective date of January 1, 2011. Since Mrs. Jones didn't join when she was first eligible and went without other creditable drug coverage for 43 months (June 2007 - December 2010), she will be charged a monthly penalty of $13.90 in 2011 ($.3234 X 43 = $13.90) in addition to her plan's premium. A TSCL analysis found that a 43-month delay signing up for Medicare Part D would cost Mrs. Jones an estimated $2,055 over the next ten years.
You can get help with Medicare enrollment by contacting your local Social Security office, or you can enroll online at www.socialsecurity.gov. For more information about keeping costs low while living in retirement, visit The Senior Citizens League online at www.SeniorsLeague.org and sign up for a free newsletter - The Social Security & Medicare Advisor.
With over 1 million supporters, The Senior Citizens League is one of the nation's largest nonpartisan seniors groups. Located just outside Washington, D.C., its mission is to promote and assist members and supporters, to educate and alert senior citizens about their rights and freedoms as U.S. Citizens, and to protect and defend the benefits senior citizens have earned and paid for. The Senior Citizens League is a proud affiliate of The Retired Enlisted Association. Please visit www.SeniorsLeague.org or call 1-800-333-8725 for more information.
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