Dave “Tiger” Williams of the Toronto Maple Leafs holds the NHL hockey record of most time in the penalty box: 3,971 minutes.
This has nothing, of course, to do with Medicare penalties but if you are ever on a game show and are asked who holds hockey’s penalty box record and the prize is a million dollars. You’re welcome!
Many, many people worry about penalties with Medicare. I get a lot of people phoning me just to be reassured that they won’t get a penalty in their situation. So, let’s understand when there are penalties. Medicare has two penalties that you need to know about.
The first penalty is for not having your Medicare Part B when you should. Turning 65 puts you into that “should” category. The penalty for not having your Part B is having an extra 10% tacked onto your Part B premiums for each year you do not have Part B when you should. So, if you simply don’t get around to enrolling until you are 68, the penalty is an extra 30% added on.
If you enroll into Medicare late, meaning outside of your 7-month window when you turn 65, the only time you can then enroll is during General Enrollment Period which is January 1 to March 31 each year. The rest of the year you are out of luck and have to wait.
There is a big exception though to being required to enroll into Medicare penalty free at age 65. People who are still working and have credible group healthcare coverage, or are the spouse of someone who has group coverage, can defer their Medicare until they retire and they lose Group Health Coverage, deferring without any penalty at all. Your insurance must be considered credible by Medicare as almost all Group Health coverage plans are. Credible means it is at least equal to Medicare in what it covers. If you are not sure about this then consult with your HR department.
The second penalty is a Part D penalty, for not having in place drug coverage after you become eligible for Medicare. This penalty is 1% of the average cost of a drug plan added to your cost when at some point you do sign up for a drug plan. The penalty works out to around 40 cents per month. So, let’s say you wait 2 years to sign up for a drug plan, at 40 cents times 24 months, it will add around $10 each month to your drug plan premium cost.
Once again, if you have Group Health Coverage you won’t have to worry about this penalty either as long as you are working and keep your coverage. Many people who have VA benefits will get their drugs through the VA. VA drug coverage is also allowable by Medicare and you won’t have to worry about the Part D penalties.
But, let’s say you signed up for a free GoodRX card. That’s not going to fly with Medicare!
