How Seniors Can Avoid Medicare Penalties

Understanding Medicare deadlines is one of the most important steps to protecting your health and your finances. One thing that gets overlooked, is the Part B and Part D late enrollment penalties, which can stay with you for life. Avoiding these penalties should be a priority for anyone approaching Medicare age.

The Part B penalty applies to medical coverage doctor visits, outpatient care, and preventive services. You’re first eligible at 65, and if you don’t enroll on time, Medicare may charge a penalty equal to 10% of the standard monthly premium for every 12 months you delay. This penalty usually lasts as long as you have Medicare. The only time you can safely delay Part B without a penalty is if you have creditable employer coverage through your own job or your spouse’s job. In that case, once the employer coverage ends, you have an eight-month Special Enrollment Period to sign up and avoid the penalty.

The Part D penalty applies to prescription drug coverage. Once you start Medicare, you must always maintain credible drug coverage. Creditable drug coverage means coverage that’s as good as a standard Medicare drug plan. This includes employer or union coverage, VA benefits, TRICARE, CHAMPVA, Tribal Health Insurance, and Wisconsin’s own SeniorCare program, which is fully considered creditable for prescription drugs. If you go 63 days or more without drug coverage, then Medicare adds a permanent penalty to your Part D premium.

For many retirees in Northeast Wisconsin, avoiding penalties can be as simple as maintaining any of these qualifying coverages or enrolling in a $0 premium Medicare Advantage plan that includes prescription benefits. VA Benefits, TRICARE, CHAMPVA, SeniorCare, and eligible Tribal Health programs can all serve as creditable drug coverage as long as you stay enrolled.

To avoid penalties, check your coverage before age 65, before retiring, or anytime your insurance changes. It’s best to review everything at least three months in advance. If you use VA, TRICARE, SeniorCare, or another retiree program, request a letter of creditable coverage for your records.

Not sure if your plan is creditable? Contact your plan or call OnMedicare a local Independent Insurance Agency at 920-777-5771. A little planning now can help you avoid lifelong penalties and stay fully protected.