As a recent Siemens retiree, you and many other individuals approaching retirement don’t want to miss signing up for Medicare on time. The window of opportunity you have to sign up is three months before you turn 65 and three months after.
There can be major consequences if you do not sign up for Medicare during that time frame. There are different penalties for Part A and Part B. In Part A, the majority of Americans get their premiums for free if they or their spouse contributed 10 years of Medicare taxes through their job. If penalties are involved, it breaks down as follows:
Cost: 10 percent added to monthly premium for twice the number of years of missed eligibility
Late Penalty Calculation: .10 times premium
For Part B, everyone is required to pay a premium, which increases as you earn a higher income. These penalties last as long as you have Medicare:
Cost: 10 percent added to monthly premium for as long as you have Medicare
Late Penalty Calculation: .10 times premium times number of years of missed eligibility
When you do sign up for Medicare, you have two main ways to get your Medicare coverage— Original Medicare or a Medicare Advantage Plan (like an HMO or PPO). You can also get additional coverage as an option, like Medicare prescription drug coverage or Medicare Supplement Insurance (Medigap). There is also a way for you to determine what your premium amount will be: go to https://www.medicare.gov/eligibilitypremiumcalc/ and click on the “Calculate my premium” button.
It does pay to remember to sign up for Medicare on time, as the long-lasting effects can be painful: while late penalties for Part A do have a date where you can stop paying, Part B continues as long as you have Medicare, which usually means you’ll be paying for the rest of your life. If you have questions about Medicare and other areas of retirement, call Mooney Lyons at 1.847.382.2600, or visit us at mooneylyons.com.
Getting started with Medicare. Medicare.gov. 2016.
Feke, Tanya, MD. Paying Late Penalties for Medicare.verywell. 19, Jan. 2016