What happens if you delay Medicare Part B enrollment?

At age 65, you face a lot of decisions: Should I retire soon? When should I start taking Social Security? Should I sign up for Original Medicare or Medicare Advantage? You also face an important—and often overlooked—deadline. If you don’t sign up for Medicare Part B when you first become eligible for Medicare, your monthly premium can go up by 10% or more.

Read on to learn more about this potentially costly penalty and how you can avoid it.

To learn more about Medicare coverage, call a licensed insurance agent at (800) 827-9990 to discuss your plan options or explore your options online.

What is Medicare Part B and how much does it cost?

Original Medicare includes two parts. Part A covers inpatient care in hospitals, skilled nursing facility care, hospice care, and home healthcare. Part B covers outpatient care and other services.

Part A can have a $0 premium if you’ve paid Medicare taxes long enough through to qualify for it.1 But Medicare Part B has a monthly premium, which is set by the federal government each year. (In 2022, the rate is $170.10 or higher, depending on your income.)² Despite having to pay for it monthly, a Part B plan is important, because it covers things such as doctor visits, bloodwork, health screenings, and preventive care.

How and when to sign up for Medicare Part B

Medicare’s Initial Enrollment Period (IEP) begins three months before you turn 65 and ends three months after you turn 65. That gives you a window of seven months to enroll, including your birth month.

If you miss that window, you can sign up during Medicare’s General Enrollment Period, which runs from January 1 through March 31 each year. But if you sign up during this period, your coverage won’t begin until July 1 of that year. You also may be subject to a late enrollment penalty.

How you can be penalized for delaying Medicare Part B

If you don’t sign up for Medicare Part B during your IEP, you may face a 10% lifetime penalty for each 12-month period (not each calendar year) you delay. For example, let’s say you turned 65 in September 2019. Your Initial Enrollment Period ended in December 2019, but you didn’t sign up for Part B until March 2022. Since you delayed just over 24 months, you would pay 20% more for every month you’re on Medicare. So instead of $170.10 per month in 2022, you would pay $204.12 per month.³

How you can avoid the Medicare Part B penalty

One way to avoid the Medicare Part B penalty is to sign up for Part B promptly once you’re eligible. But there are times when you may not be required to sign up during your Initial Enrollment Period, which occurs around your 65th birthday.

If you or your spouse is still working and covered by an employer’s group health plan, you don’t have to sign up for Part B. After your group coverage ends, you’ll have a Special Enrollment Period (SEP) that lasts eight months and allows you to enroll in Medicare Part B without facing a penalty.⁴

That said, you should be aware of a few details:4^,5

• You’ll need to verify your coverage under your or your spouse’s group health plan with specific forms signed by your employer.
• COBRA and retiree health coverage don’t count as current employer coverage. (COBRA is a form of insurance coverage that continues for a period after you leave your job.)
• If you work for a small company (fewer than 20 employees), you may need to sign up for Medicare coverage when you turn 65. Confirm your coverage options with your employer before delaying any enrollments.

Signing up for Medicare Part B during an SEP can be complicated. A licensed insurance agent can help you understand your coverage and enrollment options. Call (800) 827-9990 or start comparing Medicare options online today.