Medicare Late Enrollment Penalties & Lifetime Late Enrollment Penalties


Medicare Late Enrollment Penalties

Lifetime Late Enrollment Penalties

Many older Americans who have Affordable Care Act insurance policies are going to miss a Sept. 30 deadline to enroll in Medicare, and they need more time to make the change, advocates say.

A lifetime of late enrollment penalties typically await people who don’t sign up for Medicare Part B, which covers doctor visits and other outpatient services, when they first become eligible at age 65. That includes people who mistakenly thought that because they had insurance through the ACA marketplaces, they didn’t need to enroll in Medicare.

Earlier this year, Medicare officials offered to waive penalties for the ACA insurance buyers under a temporary rule change that ends Sept. 30.

65 Or Disabled

Asking for  waiver offer applies not only to people over 65 who have kept their marketplace plans, but also to younger people who qualify for Medicare through a disability after 2 years and chose to use marketplace plans.

The waiver also allows Medicare beneficiaries who had earlier realized their mistake in keeping a marketplace plan to ask for a reduction or elimination of the penalty.

Easy Mistake

It’s easy to see how people can make mistakes. Since Medicare’s Part A hospitalization benefit is usually free, some seniors who liked their marketplace coverage thought incorrectly that they had nothing to lose by signing up for Part A and keeping their marketplace plan.

Other people receiving Social Security retirement or disability benefits opted to keep their marketplace plan and drop Part B after the Social Security Administration enrolled them automatically in Medicare when they became eligible.

If beneficiaries miss the Sept. 30 deadline, the only other way for them to get out of penalties is by proving they declined Part B because a government employee misinformed them.

No Coverage Until July 1

For the first time, insurers will be prohibited from issuing a marketplace plan if they know the member is eligible for Medicare and the 2018 policy is significantly different.

Those who find themselves without a marketplace plan could be in for another surprise: They won’t have insurance for outpatient care until July 1 because Medicare imposes a waiting period before Part B coverage kicks in for latecomers.

Extending the deadline “would lessen a significant hardship for many people … because they are unaware of the repercussions that could result from keeping their marketplace coverage.

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