Act Now or Pay Forever: Why Waiting Past December 7th Could Lock You Into a Lifetime of Co-Pays
The annual enrollment period is a crucial time to enroll, make changes or enroll in Medicare Advantage.
If you’re ready to sign up for Medicare, December 7 is a very important date, because it’s the end date of this year’s Medicare Open Enrollment Period. If you need to make changes, this is the time to do them correctly and avoid potential penalties or loss of coverage.
During this time you can:
- Change your Medicare Advantage Plan: Join, drop or switch to another Medicare Advantage Plan with or without drug coverage (or add or drop drug coverage).
- Change your drug plan: Join, drop or switch to another Medicare drug plan if you’re in Original Medicare.
- Change how you get coverage: Switch from Original Medicare to a Medicare Advantage Plan or from a Medicare Advantage Plan to Original Medicare.
Any changes you make will take effect January 1, but only if your enrollment request is received by December 7.
However, signing up for Medicare when you become eligible is important financially. That begins three months before you turn 65 and ends three months after the month you turn 65. Unless you have other coverage, such as through an employer, you can save money on premiums by enrolling at the correct time. If you don’t, you’ll be paying a late enrollment penalty.
The penalties break down this way:
Part A penalties
Your premium may be subject to a 10% penalty if you don’t buy it when first eligible for Medicare. It’s not a one-time charge, either. Your monthly premium will be 10% higher for twice the number of years you didn’t sign up.
For example, if you were eligible for Part A but delayed three years before signing up, you’ll be paying extra for the higher premium for six years. Usually, you don’t have to pay a penalty if you meet certain conditions that allow you to sign up for Part A during a Special Enrollment Period.
Part B penalties
You don’t have to pay a Part B penalty if you qualify for a Special Enrollment Period, or you enroll in a Medicare Savings Program. The penalty is an extra 10% for each year you could have signed up but did not.
Part D penalties
If, in general, you have drug coverage similar in value to Part D or you qualify for Extra Help (a Medicare program that helps those with limited income and resources pay Medicare drug coverage) there is no penalty.
Otherwise, the penalty is 1% extra each month if you don’t join a Medicare drug plan when you first enroll, or go 63 days or more without drug coverage.
Now is the time
You can avoid the higher premiums that come with late enrollment by considering your options for Medicare and Medicare Advantage plans by completing your enrollment by Dec. 7. Make sure your current plan meets your needs, and keep in mind that if it does, you don’t need to make any changes.
