What is the Medicare Part B Late Enrollment Penalty
Suppose you don’t enroll in Original Medicare Part B during your Initial Enrollment Period (IEP) and do not have credible coverage through you or a spouse’s employer or are eligible for a Medicare Savings Program. In that case, you will have to pay the Part B premium penalty. This penalty is 10% of the Part B Premium for each 12-month period that you delay enrollment in Medicare Part B.
You will have to pay this penalty monthly as long as you are enrolled in Medicare. However, if you are enrolled in Medicare because of a disability and are under age 65 when you turn 65, the penalty will go away.
Calculating the Penalty
Calculating the Part B Late Enrollment Penalty can be simple. Let’s do an example:
In this example, let’s say you have delayed enrollment for five years and did not have employer-sponsored coverage. This would make your monthly premium 50% higher ( 5 years x 10%).
In 2023, the Medicare Part B Premium will be $164.90.
Base Premium + ((.10 x Years of Delayed Enrollment) x $164.90) = Your Total Monthly Premium
$164.90 + ((.10 x 5) x $164.90)
$164.90 + (0.50 X $164.90)
$164.90 + $82.45
So, you would pay $247.35 each month, with $82.45 as the penalty.
If you need help choosing Medicare coverage, feel free to reach out to Seniorstar Insurance Group at 732 658 5100. We can help you evaluate your options like Original Medicare Parts A & B, Medicare Advantage (Part C), Medicare Part D Prescription Drug Plans, and Medicare Supplements.