Welcome to Medicare School Daily, where we help you understand Medicare, save money,
avoid mistakes, and above all else, get the most out of your Medicare benefits.
Now, today's topic is understanding the Medicare Part B penalty and how to avoid it.
Now, when you go on Medicare, you'll be issued a Medicare card, of course.
And original Medicare is divided into two parts.
Part A is called hospital.
Part B is called medical.
I've already dealt with the topic of penalties associated with Part A hospitalization.
But today's topic is dealing with the penalties that come with Medicare Part B. First, I want
to address those of you who won't get penalized for Part B, because there are many people
who are not going to be penalized.
The first group of those that are going to come into Medicare during the, what we call,
the initial enrollment period.
We use the acronym IEP
And anyone who is going to start Medicare, notice at 65, is going to come into Medicare
using the initial enrollment period.
Now, this is anyone who is not working or their spouse is not working.
This is when you must come into Medicare during this seven month period of time.
That is three months before your 65th birth month, the month you turn 65, and then three
months after.
So three months before, month of, three months after.
During that seven month period of time, we're going to come into Medicare.
And when we come in during this initial period we are not penalized for A or for B. Now,
the second group of people that will not be penalized are those that are coming in during
what is called the special enrollment period, we use the acronym SEP.
Now, this special enrollment period is going to be used by those that didn't start Medicare
at 65 because they or their spouse were still working, and so they delayed taking Medicare.
So this is anyone who is 65 plus they or their spouse kept working.
And then when they retire, and that could be at 66 or 69, 72, 83, doesn't matter.
But you're going to come into Medicare using the special enrollment period.
Now that special period actually goes from eight months from when the employment ends.
So from when the employment ends, we have eight months to come in.
That's called the special enrollment period.
Now, just from a practical standpoint, I want you to realize that hardly anyone would take
all eight months.
In fact, most people are going to start their Medicare as soon as their retirement begins.
So the last day at work, the coverage is over.
Then you want Medicare to begin.
But officially, from the employment end date, we have eight months to come in.
And so if we come in during that eight month period, any time after the employment ends
using the SEP, we will not be penalized at all for taking Part B during those particular
months.
So who is it that will get a penalty for Part B?
Anyone who uses the third enrollment period, which is called the general enrollment period,
we use the acronym GEP.
So we have missed the IEP.
We missed the SEP.
And this is the only way we can come in now.
But with this particular enrollment period, there are problems.
Number one problem is we can only enroll in the first quarter of the year.
So someone realizes they made a mistake in April or May or June, July thereafter.
They're going to have to wait till the next year to enroll into Medicare because this
general enrollment period is only open the first quarter of the year.
The second problem is then our coverage is also delayed.
So though I enroll in the first quarter, my coverage doesn't begin notice until the beginning
of the third quarter.
Right?
So my coverage is now delayed.
But here's the worst problem.
That is now there's going to be a penalty.
So for every 12 months I go without Medicare Part B when I should have had it, now I'm
going to pay a 10% penalty every single year.
And the problem with that penalty is it is a lifetime penalty.
So if I go without Part B for one year, I pay a 10% penalty added to my Part B premiums
for the rest of my life.
I go without two years, It's a 20% penalty added to my Part B premiums for the rest of
my life.
And so we want to enroll into Medicare at the right time.
The initial enrollment period, special enrollment period, no penalties.
We use a general enrollment period, we will have to pay penalties for the rest of our
life.
Thanks so much for watching. We understand how
difficult making the right Medicare decisions can be.
To take the next step, watch our full course at Medicareschool.com
or schedule a free one-on-one call with a certified MedicareSchool Guide
who can answer your questions, compare your plan options,
and help you get enrolled into the proper plans.
Go to MedicareSchool.com to get started.