Avoid Higher Costs with Medicare Part B
Enrolling in Medicare after the age of 65 can lead to higher costs, including penalties for late enrollment. Let’s explore how these penalties can apply to Medicare Part B and Medicare Part D premiums.
Standard Medicare Part B Premium
Medicare Part A typically comes at not cost, however Medicare Part B does have a monthly premium. The standard premium for Medicare Part B in 2023, which amounts to $164.90. This payment is typically deducted directly from your Social Security benefits. Alternatively, you can receive a quarterly bill at your home and choose to pay the Part B premium from your personal banking account. To set up automatic payments, you can complete a form or access your Medicare.gov account.
Higher Costs with Higher Income
However, there are situations where the Medicare Part B premium can increase, such as based on your income. If you are a high-income earner, earning more than $97,000 as a single individual in 2023, you may be charged an additional amount for both your Medicare Part B and Part D premiums. To learn more about penalties associated with Medicare Part D, you can read our blog here.
It’s important to note that when reviewing income for Medicare costs, the program looks back two years to assess your earnings. If you enroll in Medicare in 2023, your premium adjustment will consider your taxable income from 2021. For detailed information on Medicare and income, please refer to our comprehensive blog by clicking here!
Denying Medicare at the age of 65
Another factor that can result in penalties is not enrolling in Medicare at the right time. During your Initial Enrollment Period, it is crucial to sign up for Medicare to avoid penalties or being locked out of coverage. The penalty that is assessed is 10% of the standard premium for each twelve months that you have went without coverage. However, if you or your spouse are currently employed and have health insurance through the employer, you may have the option to delay Medicare enrollment until the employer coverage is no longer available. To avoid penalties and lockout, the coverage you receive from your employer must be “Creditable by Medicare,” meaning it pays for services at the same rate or better than Medicare. Generally, if your employer has over 20 employees, the coverage is considered creditable. However, if your employer offers self-insured coverage, you might need to enroll in Medicare at the age of 65.
Proof of Creditable Coverage
Fortunately, employers who provide health insurance are required to annually furnish you with information regarding creditable coverage. Normally, this information is sent to your home directly by the health insurance plan in September. You can access a sample of a creditable coverage notice by clicking here. This notice will specify whether you should choose Medicare or if you can decline it based on your existing health insurance coverage. It is advisable to keep a copy of this notice for future Medicare enrollment, ensuring that you can enroll in Medicare penalty-free when you are ready.
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