Medicare Penalties That Last a Lifetime

Hi, I’m Toni King. Thank you for listening to today’s Medicare Moments podcast. I took the Medicare and You Handbook and put it into “people terms” so that America can personalize their Medicare just for themselves. Today I am discussing Medicare enrollment rules and penalties because, you know, there are over seven hundred thousand – do you hear me? There are over seven hundred thousand people receiving a Medicare penalty. Why? Because they did not know the rules. Because with Medicare, you know, it’s what you don’t know that will hurt you. So let’s get started. I write a Medicare column in the Houston newspaper each week, and recently Jeanie from Bel Air, Texas, asked me a question about her mother, and here’s what Jeanie said.

Toni, I desperately need your help. I have just discovered that my mother, who is 67, has never enrolled in Medicare Part B or Medicare Part D. She only enrolled in Medicare Part A since she turned 65. She was under the impression that if she didn’t go to the doctor, she didn’t need to pay for the premium because she needs the money to pay her car payment. My brother and I would have helped her. We had no idea. She has a huge problem because she has recently been diagnosed with colon cancer and she does not have Medicare Part B, which helps with her medical cost, nor does she have a prescription drug plan. I called Social Security to find out what I could do to help her or to get help, and was informed that she has to wait until January first through March 31st of next year – the one that’s coming up. She has to wait to enroll in Medicare Part B because she missed what the Social Security person called her “window of opportunity.” Can you tell me what I need to do to help her? And again, this is Jeanie who sent the letter from Bell Air, Texas.

Well all I can say, Jeanie is your mother is in big trouble. Currently, there are over 700,000 people on Medicare who are receiving a Medicare Part B and/or Part D penalty, costing on average five-thousand dollars in penalties in their lifetime because they did not enroll in Medicare the right way. Now, Jeanie, your mother’s situation is extremely serious. She has a Medicare issue because the general enrollment period for those who never enrolled in Medicare ended on March 31st of this year, and as the social security agent stated, your mother will have to wait until next January 1st to begin her process of enrolling in Medicare Part B. Looks like your mother will be joining the 700,000 group because she is going to receive the famous Medicare Part B penalty. Since your mother enrolled in Medicare Part A, she can enroll in her prescription drug plan and her Medicare part D prescription drug plan during this Medicare Annual Enrollment period, October through December 7th of this year, and her Medicare prescription drug plan will begin January 1st. So that’s one good thing, but your mother will not be able to enroll in a Medicare Advantage Plan or any Medicare Supplement because she does not have her Medicare Part B, as in boy, yet. She will have to wait until July 1st to enroll in her Medicare Advantage plan or Medicare Supplement because she has to wait until the next upcoming General Enrollment Period, which is from January 1st through March 1st. So when your mother, who will be 68, when she enrolls in Medicare Part B the next year’s general enrollment period, she’s going to receive a Medicare Part B penalty, which is 10% for each twelve-month period, or year, that she could have had Medicare Part B, and her penalty is going to be 30, that’s 3 years times 10. For as long as your mother could have had Medicare Part B, which is 3 years but failed to enroll. This penalty will never go away and remains in effect for the rest of her Medicare life or until your mother passes away. The Medicare Part D penalty, and this gets a little confusing – it’s 1% of the national Medicare Part D average premium, and for this year, that average is 33 point 37 cents. Doesn’t seem like a lot, but your mother has about 36 months’ worth of a Medicare penalty and that ends up being an extra 12 dollars a month for this year for her Medicare Part D and a penalty. America needs to be educated and enrolling in Medicare can be very confusing, so let’s discuss different enrolling Medicare ways or options. Most people think that when you turn 65 that there is a magical switch that is turned on and automatically you are enrolled in Medicare. Well, you know, Medicare changed its rules during the Clinton administration when Social Security extended the time for receiving a hundred of your social security benefits to receive your Medicare card on time depends on whether you are receiving your Social Security check or not. When you are turning 65, receiving your Social Security check is your ticket to enrolling in Medicare, and it will come automatically. The process will start for you. You’ll receive your Medicare benefits and your Medicare card on the first day of the month, the first of the month that you are turning 65. Social Security does all of the paperwork for Medicare. So if you are not receiving your Social Security check when you’re turning 65 and you need to enroll in Medicare, that’s what my situation was. I’m self-employed. When I turned 65, I needed to enroll in Medicare because I had an individual plan. So I had to go online and you will have to go online if you need to enroll in Medicare when you’re turning 65. You go to www dot S S A dot Gov, forward slash benefits, forward slash Medicare and enroll online. A lot of people would rather go to the local Social Security office, and right now there is like a three-hour wait just to get in the door. And if you go to the local office, they will tell you to go online and enroll yourself. They will not enroll you. Go into S S A dot Gov and opening a Social Security account can help you in a lot of ways and can help you enroll in Medicare through the Social Security website. So doing this online can save you a lot of time and frustration. You will not be as stressed. So here’s how to receive your Medicare at the right time. If you’re turning 65 and you’re receiving your Social Security check, this is the easiest way to receive your Medicare card. Your Medicare card will be sent in you’re welcome to Medicare kit 90 days prior to you turn in 65. On the first day of that month. If you are turning 65 and not receiving your Social Security check because you’re still working and maybe you have a high deductible, you’re not happy. It costs you a lot of money to be on that employer benefit. Or maybe you’re self-employed like I am self-employed, or maybe you’re not working and you have not received your Social Security check yet, so you don’t realize that now you have to go online, waiting until after you turn 65. You may want to delay your Part B because you are working for a company and you have company benefits. That’s one reason to delay your part B. But if you are like me, you’re self-employed, or maybe you’re someone who is not working full time and you’re waiting to receive your social security check, then like I said, you will want to go online within that three-month period prior to turning 65 to enroll in Medicare. People don’t realize that there is a seven-month window to enroll in Medicare. One can enroll three months before their turn in 65, the month that they turned 65, and three months after. It takes Social Security 90 days to do the paperwork, and if you wait until you turn 65., then your Medicare will be delayed. It will not start the month that you turn 65, it will start the next month. We’re gonna discuss turning 65 and still working and wanting to delay your Medicare Part B a little later in this Medicare Moments podcast. Right now, I am teaching you how to enroll if you are either, number one, turning 65 and receiving your Social Security check, or number two, turning 65 and not receiving your Social Security check and you wish to enroll in Medicare, so let’s discuss the Medicare Enrollment Period. Number one, you have Medicare’s Initial Enrollment Period for people who are turning 65. This begins three months before you turn 65, the month you turn 65, and three months after you turn 65. You know, like I said before, there are two different ways to enroll, and I know I’m going over this again in but people get so confused about it. They really do not know what to do. So let’s just go back over and make this simple for you. Number one, if you’re turning 65 and you are already receiving your Social Security check. This is the easiest way to receive your Medicare card because it will be sent to you and you’re Welcome to Medicare Kit. Remember, Social Security processes all the paperwork for Medicare. Isn’t that just amazing? Medicare does not process your paperwork. Social Security enrolls you and processes everything. Medicare does not even know how to enroll America in Medicare. I know it’s confusing, but that’s the way it is. Number two, turning 65 and not receiving your Social Security check because you are still working and maybe you don’t like your company insurance. Maybe you have a high premium or you have a high deductible and you think Medicare will be your best option. Or maybe you’re not working at all, or maybe you’re someone who is self-employed like I am. You need to go online to S S A dot Gov g O V S S A dot G O V forward slash benefits forward slash Medicare at least 90 before you turn 65 for your Medicare to start the month that you turn65. So if your birthday is like mine is in May. I could enroll 90 days prior, which is February, March, and April for mine to begin May 1. So here’s what confusing about the Initial Enrollment Period. There’s a term that is not mentioned in the Medicare and You Handbook under Initial Enrollment Period. The handbook states if you enroll in Medicare Part A and/or part B the month that you turn 65 or during the last three months of your Initial Enrollment Period, the start date of your Medicare coverage will be delayed. They don’t tell you how it’s delayed. So let’s just talk about it so you understand it a little better. The effective date schedule is the seven-month period. Let me repeat that again. The effective date schedule is the seven-month period which occurs three months before turning 65, the month that you turn 65, and three months after turning 65. But it’s not just that simple. So I’m gonna go over what the effective date schedule is because this can confuse a lot of people enrolling any time. Three months before your turn in 65, your Medicare begins the month that you turn 65. That’s the easy way. Most people do it that way. If you enroll the month you turn 65, so you’re enrolling in December, then your Medicare Part B will begin the month after you sign up, so you can enroll in December, and your Medicare Part A is December 1, your Medicare Part B will be January 1st. Imagine that. Let’s say you enroll one month after you turn65. Your Medicare Part A is December 1. Your Medicare Part B will be two months later. Who would ever think that’s how it works? So if you enroll in January, your Part A will be December 1. But guess what, your Medicare Part B begins March. You enroll in January, you got February. It starts March. Let’s say you enrolled two months after you turn 65. Your Medicare part B will begin three months after you sign up. If you enrolled in February, which is two months after, then your Medicare Part A will begin December 1. Your Medicare Part B will begin May 1, so that’s February March April. That’s three months. It will start May 1. Now you enroll three months after you turn 65, you’re still in your Initial Enrollment period. Your Medicare will begin three months after you sign up. If you enrolled in March, three months after the month that you turn 65, then your Medicare Part A will be December one. Your Medicare part B will be June 1. You’re thinking it’s gonna start the next month, nope, it’s gonna Start June 1st. So if you enrolled in March, you got March, April, May, it will start June 1st. See how confusing it can be to not know your Medicare rules?

So visit Senior Resource dot com, where my articles about how to enroll are on the website, all the weekly articles.

Let’s talk about Medicare’s Special Enrollment Period. That’s the other way to enroll. That’s another Medicare Part B enrollment period. And you want to delay your Part B and now you need to enroll due to working full time. This is an eight-month window for signing up for Medicare part B without receiving the famous part B penalty. So if you’re enrolling during your Special Enrollment Period, you have an eight-month window that you can enroll in Medicare Part B. But what we tell everyone who comes in the office for a Toni Says Medicare consultation or Zoom appointment. When you’re leaving your work and you’re leaving your company insurance and you are past 65 and 90 days, your past your Initial Enrollment Period, you’re gonna want your Medicare Part B to start as soon as possible, and we’ll discuss how to do that in just a few minutes. So what happens if you’re turning 65 and you are still working, what should you do? Well, one thing you should do is talk to human resources and ask them whether you need to enroll in Medicare part B. If you do not need to enroll in Part B because you are still working, or maybe your spouse is still working and you’re on their benefits, then you can delay your Part B for a later date. This is in the Medicare and You Handbook about delaying Medicare Part B and you can purchase a Medicare Advantage Plan. You can get a Medicare Supplement once your Medicare goes into effect. You can also go online to Senior Resource dot com or my website, which is Toni Says dot com if you would like to purchase the Medicare Survival Guide Advanced Edition that goes into a little more detail about things. So you and your spouse you’re still working, those are the magic words when it comes to enrolling past 65. Still working and losing your or your spouse’s employer benefits is also key situation. The Medicare and You Handbook, under the title Should I Enroll in Medicare Part B, discusses delaying Medicare Part B when you are leaving group or employer benefits, and that you can sign up for Medicare part B anytime during that eight-month window. But like I said before, we advise everyone out of the Toni Says Medicare office to get their Medicare Part B as fast as possible when you’re leaving your employer group benefits. When we perform a Medicare planning consultation, whether it’s in person at the office in Sugarland or if it’s by Zoom if you are just laid off retiring, we stressed, like I said, the value of getting Medicare Part B for the first time, and that Medicare Part B enrolling needs to be prior to either enrolling in COBRA or your retirement group benefits. Don’t wait if you do not have Part B and you only have an eight-month window without receiving the famous Medicare Part B penalty. If you wait too long, you will get the penalty the process to enrolling in Medicare Part B. If you have delayed it, you’ve delayed your Part B. What do you need to do? Now get your pen and paper out and write down some notes. There are two forms available from a Social Security website, and on top of each form you want to write Special Enrollment Period because you want the S E P the Special Enrollment Period. This tells Social Security that’s processing these forms that you are signing up at the right time, and it keeps you from getting the famous penalty. Whether it’s Part B or Part D. You are applying for an SEP Special Enrollment Period. Remember, write it at the top of the form. So the first form that you need is CMS-l564 that is the request for Employment Information. And this form proves that you’ve had group coverage based on current employment if you have had two or more jobs since turning 65. Then all of the companies will need to sign the form for you and your spouse if your spouse is under your company insurance. So you want to make sure that you take the time and you learn all of this, especially if you’re retiring you want to make sure that you get these forms signed. If you’re leaving work and you are passed 65 and you’re going to work for another job, get the CMS-1564 and have that employer’s HR department sign it for the future when you do decide to finally leave work and need to enroll in Medicare Part B, and like I said on the top of the form write Special Enrollment Period. The other form that you need is CMS-40B, which is your application for enrollment in Medicare Part B, and you will need your Medicare number. And at the top of it again you write Special Enrollment Period. You fill the form out and under remarks which is under number 12, you let them know please have my Medicare Part B start whatever month you’re coming off your company insurance or whatever month you want your Part B to start within the eight-month window. Do not wait eight months past eight months or you will get the famous Part B penalty. You’re gonna wanna either take the forms in person to the Social Security Office, fax them to your local office our priority, mail them to your local Social Security office, and always make copies of whatever you are sending to the Social Security Office. Remember, always make copies of everything you are taken in person are sending to the local social security office. I personally, this is this is me personally. I personally like working with the local office. I like seeing people face to face. I do not mail my Social Security paperwork for the people coming in for a consultation to Social Security’s main office in Birmingham, Alabama. That seems to be where all the paperwork is processed. It seems to just get lost.

I want to thank you for being part of the Medicare Moments podcast. If you still have questions about personalizing your Medicare making it for you, or if you’d like to just find out more, visit www dot Senior Resource dot com, where the Toni Says Medicare articles can be found. You can read them, you can download them, and you know, I just want to say, have a great day. We are in the best country there is. God bless you, and God bless the USA, have a good day.