If you do not enroll in certain Medicare programs/plans when you are first eligible during the Medicare Initial Enrolment Period (IEP), you could increase your premiums. There are late-enrollment penalties for Medicare Part A, Part B and Part D plans.
The IEP begins three months before you turn 65 and lasts seven months in total.
The vast majority of Medicare beneficiaries automatically receive Part A premium-free provided they have worked for at least ten years and have paid Medicare taxes. If you already get Railroad Retirement benefits or Social Security, you are auto-enrolled in Medicare Part A.
Not qualified? Then you are not enrolled and may end up paying a 10 percent higher monthly premium if you do not enroll during the IEP period. You would also be paying this increased premium for twice the number of years that you could have had Part A but were not enrolled. As an example, the Part A premium can be as high as $422, without the penalty, in 2018.
Part B may also come with a late enrolment penalty if you do not enroll when you are first eligible. That may send your monthly premium up 10 percent for each year you were without Part B after your IEP closed. This penalty may be with you for the remainder of the time you are enrolled in Medicare.
Part D may have a penalty as well if you go 63 or more consecutive days without a creditable drug plan after you IEP closes.
It is definitely confusing trying to keep track of all the ins and outs and if you need more information before you make Medicare choices, contact a knowledgeable health insurance agent. They are your best friends when it comes to helping you choose what you need and what suits your lifestyle.