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Medicare is a healthcare program designed by the federal government to cover those over 65.

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Every day, those turning 65 and those already qualified for Medicare turn to us to learn more about their Medicare options.

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Most Popular Questions About Medicare

Q: Why Is There a Medicare Part B Late Enrollment Penalty?

Unfortunately, there is a Medicare Part B late enrollment penalty.

Medicare rules require you to enroll in Medicare Part B during your Initial Enrollment Period to avoid paying a late enrollment penalty that will be added to your Medicare Part B premiums. (As a reminder, unlike Medicare Part A, Medicare Part B isn’t free. You must pay for it out of your own pocket, or have it deducted from your monthly social security check.)

The Late Enrollment Penalty: The Medicare Part B late-payment penalty amounts to an increase of 10 percent for each 12-month period that you were late enrolling in Medicare Part B. For example, if you were eligible when you turned 65, but didn’t enroll until you turned 67, you will be charged 20 percent more in Medicare Part B premiums as everyone else, for as long as you have Medicare Part B. This penalty doesn’t go away, which is why you need to do everything you can to avoid it.

While government in general does have a lot of rules and regulations for little to no reason, I get the purpose of this penalty. The Medicare Part B late enrollment penalty is in place to help guide Medicare seniors to enroll in Part B at the right time.

Why Medicare Charges This Penalty: From an actuarial standpoint (the people who work for insurance companies and crunch the numbers), the older you are, the more you’ll need medical services. From Medicare’s perspective, they want you to enroll in Medicare as soon as you become eligible. It helps prevent Medicare seniors from waiting until they need a lot of medical services before they enroll. The technical insurance term is that they are trying to prevent “adverse selection”.

It’s best to avoid the Part B penalty altogether by not enrolling late into Part B. You can read more about the Medicare Part B late enrollment penalty on Medicare.gov.

Taking the Next Steps

Looking to offset some of your Medicare costs? Consider adding a Medicare Supplement plan to your coverage. Search our database of Medicare Supplement plans to find the right plan for each of you.

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Q: What Is the Medicare Part A Deductible?

If you are enrolled in Medicare Part A, there is a deductible that insured seniors will need to pay for each inpatient hospital stay. Every time you visit the hospital for a new treatment, you will need to pay this Medicare Part A deductible out-of-pocket before Medicare covers you. This deductible is separate from your Medicare Part B deductible, and is counted entirely differently.

Cost of the Medicare Part A Deductible: You can think of the Medicare Part A deductible as the cost of admission that you pay out-of-pocket for each hospital stay. The exception to this: if you’re hospitalized, released, and then re-admitted subsequently within a tight timeframe, the second hospitalization will be counted with the first. For 2018, the amount of the Medicare Part A deductible is $1,340, and it’s adjusted upwards each year.

Offsetting Costs with Medicare Supplement: These deductibles can be quite costly to Medicare seniors, for both unexpected and recurring hospitalization, as each deductible is over $1,300. One way to safeguard against these large out-of-pocket payments is to purchase a Medicare Supplement plan. With the exception of Medicare Supplement Plan A (which offers the most minimal, core benefits of the 10 Medicare supplement plans), most of the Medicare Supplement plans will pay the Medicare Part A deductible on behalf of the insured.

Taking the Next Steps

Looking to cover more of your Medicare Part A costs? Consider getting a Medicare Supplement plan. Search our database of Medicare Supplement plans to find the right plan for you.

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Q: I’m Turning 65. Can I Get Medicare While Still Working?

If you’re still working at 65, and you’re eligible for Medicare, you may not have to sign up right away; however, we highly recommended signing up for Medicare as soon as you’re eligible. If you don’t closely follow the rules that allow you to postpone enrollment in Medicare, you may face significant financial penalties when you do enroll.

Selectively Enrolling in Medicare

Remember, Medicare is split into two sections – Part A and Part B. Together, this is the federal insurance program also referred to as “Original Medicare”. While you don’t have to enroll in Medicare while still working, you might want to enroll in at least one part of Medicare while postponing the other part.

Occasionally, 65-year-olds enroll in Part A (which includes premium-free hospital coverage) and delay enrolling in Part B (which includes outpatient care and has considerable monthly premiums). There are also other aspects of the Medicare program, such as prescription drug coverage and private supplementary coverage, but they require both Part A and Part B first.

If you’re receiving Social Security benefits, then you’ll have to sign up for Medicare Part A even if you delay enrolling in Medicare Part B.

You Can Safely Delay Medicare Part B Enrollment If:

  1. You’re enrolled in a health insurance plan through your current employer, or your spouse’s current employer, AND
  2. The employer has 20 employees or more, AND
  3. The employer offers “creditable coverage”, or coverage with benefits that are at least equivalent to Medicare.
    1. You’ll want to confirm, in writing, that the coverage you’re using is creditable coverage. Contact your employer, insurance company, or Social Security if possible.

If you meet the above conditions, then you can delay enrolling in Medicare for up to 8 months after you (or your spouse, if you’re receiving coverage through them) have stopped working at the job that provides your current insurance.

You’ll have to enroll in person at your Social Security office once you do want to receive Medicare, since this scenario usually can’t be handled over the phone or online.

You Should Sign Up Right Away If:

  • You get health insurance from an employer with fewer than 20 employees;
  • You’re enrolled in individual health insurance;
  • You rely on a Christian health ministry, short-term insurance, or no insurance at all;
  • You’re using COBRA, retiree insurance, or health insurance from a previous job; or
  • You have VA health coverage.

Nearly all Americans over the age of 65 are enrolled in premium-free Medicare Part A, including all Social Security beneficiaries.

Instead of delaying enrollment, you could opt out of Medicare forever if you really wanted to. You’d need to speak with Social Security to opt out entirely, but this is rarely done.

It’s safe to postpone your coverage if you’re comfortable doing so. You’ll want to consider the financial implications of doing so first, since most Medicare beneficiaries are satisfied with their coverage and healthcare costs.

Taking the Next Steps

You can see if your current health insurance will allow you to postpone Medicare enrollment. If Medicare turns out to be a better option for your needs, browse our selection of Medicare Supplement plans to find coverage that will last a lifetime.

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