A bill recently introduced in Congress has its sights set on preventing a cost some new Medicare beneficiaries face: late enrollment penalties.
The bipartisan measure, introduced in the Senate, would require the federal government to provide people with information about Medicare enrollment rules before they reach the age of 65 eligible for Medicare. While many beneficiaries are automatically enrolled at this time because they are on Social Security, this is not the case for everyone.
“More people are working later in life, slowing down Social Security and not signing up automatically,” said Lindsey Copeland, director of federal policy at the Medicare Rights Center, a advocacy group. “They may need to actively sign up and [understand] what can happen if they don’t “.
The government insurance program has approximately 63.3 million beneficiaries, most of whom are at least 65 years old. Most people do not pay a premium for Part A (hospital coverage) and pay a standard monthly premium ($ 170.10 in 2022) for Part B (outpatient care).
The proportion of seniors who are not automatically enrolled in Medicare has increased over time, according to a 2019 report from the Medicare Payments Advisory Board. In 2016, 40% of people eligible for Medicare at age 65 had to be actively enrolled, compared to only 8% in 2002.
Although there are no late registration penalties related to Part A, the same cannot be said for late registration in Part B. This penalty, which is equivalent to 10% of the standard Part B premium for every 12 months you should have. been enrolled but were not, it may also increase each year as the premium is adjusted annually. And, the sanctions are for life.
Although the Part B sanction affects a small portion of beneficiaries (an estimated 776,200 in 2020), the average sanction increased their monthly premium by 27%, according to the Medicare Rights Center. According to this year’s $ 170.10 premium, that would mean an additional $ 45.93 per month, or a total of $ 216.03.
Part of the problem, critics say, is that Medicare enrollment rules can be confusing and easily misunderstood. For example, although you may delay enrollment in Part B at age 65 if you have qualified insurance elsewhere, that is, through your employer, there are still deadlines to meet once coverage ends if you you want to avoid late registration penalties.
Of course, you can appeal the charges, even if your registration error is due to someone in the government providing you with inaccurate information.
Part D, which is prescription drug coverage, also includes a late enrollment penalty: 1% of the national base premium ($ 33.37 in 2022) multiplied by the number of months you didn’t have Part D or creditable coverage. It also lasts as long as you have part D.
The new Senate bill calls for the inclusion of information on Social Security statements, from the age of 60, detailing the rules for enrolling in Medicare so that seniors are educated about their responsibilities for enrolling. In other words, assuming they read their Social Security statement, which is more likely in this age group when approaching retirement, they would see the information repeatedly before they need to sign up.
The measure was included in the 2020 legislation that addressed other issues with Medicare enrollment, including some gaps between enrollment and coverage. The provision was in the version approved by the House, but was withdrawn in the Senate and excluded from final approval.
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