For those
who choose not to enroll in Medicare at age 65 but opt to keep their private
insurance, there are complications and financial penalties
if they opt to join Medicare later.
Medicare-eligible
people who still work, or have a working spouse, often enroll only in Medicare
Part A and decline to enroll in Medicare Part B. They do this because it is
highly unlikely that Medicare B will provide much, if any, additional health
coverage when added to an employer’s health insurance plan. This is especially true
when you factor in the monthly premium charged and the waiting period necessary
for those who enroll in Part B. Medicare Part A, on the other hand, is free. By
the time they reach age 65, most people have paid into the Medicare system for
long enough to receive Part A at no charge — and why not take it if it’s free?
Once one
chooses to participate only in Part A, Social Security will simply send a card
reflecting that they have opted out of Part B and are registered only for Part
A. However, many mistakenly believe that they can join Part B at a later time
just as easily as they joined Part A. For years, insurance agents have assured
their Medicare-eligible clients that they
can simply enroll in Part B when they retire with no penalty and no waiting period
since they are coming off a group insurance plan. This
is not true.
To enroll in Medicare
Part B after retirement, or after they initially become eligible, a person or
his or her spouse will often face penalties that include a monthly
"late" premium in addition to the regular monthly premium.
Furthermore, this premium can go up 10 percent for each full 12-month period
that Part B was not utilized, and this fee will persist throughout their
enrollment on Part B. In addition to the late fees, there is also a variable
waiting period in which people cannot register for new benefits.
It should be noted that
there is also a "late" penalty for not enrolling in Medicare Part D
drug plan when first eligible. This fee is generally applied to individuals and
spouses if they did not join Part D within the first three months of enrolling
in Medicare Part A or Part B.
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