Is There a Penalty for Not Signing Up for Medicare?

The enrollment period for signing up for Medicare is determined by the month in which you turn 65 years of age. Some people are automatically enrolled in Medicare Part A and Part B when they turn 65, while other individuals are required to enroll. However, to enroll in Medicare, you must meet some requirements, and you must enroll by the enrollment period. Otherwise, you might have to pay late penalties.

Medicare Part A

• If you receive Social Security benefits, such as retirement benefits or disability benefits, and if you have paid Medicare tax while working, you are automatically enrolled in Part A when you turn 65 years of age. If you have not paid Medicare tax, you might be able to purchase Part A. If this is the case, you must do it when you are first eligible to enroll in Medicare. If you do not enroll then, you will need to pay a monthly penalty of 10 percent of your premiums for twice the period that you were eligible to enroll but did not do so.

Medicare Part B

• When you are automatically enrolled in Part A, you are also automatically enrolled in Part B. Since Part B requires the payment of a monthly premium, you are allowed to drop its coverage when you receive your Medicare card. You can do so without having to pay any penalties for not staying with Part B as long as you do not decide to enroll again. If you decide that you want to enroll in Medicare Part B later on, you might be required to pay a penalty of 10 percent of your monthly premium for the duration of your enrollment in Medicare.

Medicare Part D

• Medicare Part D helps to pay for the costs of prescription drugs. You can enroll in Part D by the initial enrollment period, which also lasts from three months before you turn 65 to three months after you turn 65. You are not charged any penalties for not enrolling in Part D. However, if you decide that you want to enroll in a Part D plan after the initial enrollment period, you will have to pay a late enrollment penalty. As of 2011, the late penalty for Part D is 1 percent of the national base beneficiary premium, which is $32.34 times all the months that you were eligible to enroll in Part D or an approved prescription drug plan but did not do so. You might have to pay this penalty for as long as you have Medicare coverage.

Exceptions

• In some cases, you can enroll in Medicare out of the enrollment periods without paying any penalties. If you were covered by a group health plan through your employer when you were first eligible to enroll in Part A or B, you can sign up for Medicare without a penalty during the eight-month period after your employer health insurance ends. For Part D, if you had a creditable prescription drug coverage plan that has ended and you want to enroll in Part D, you can do so without paying a late penalty.