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Medicare 101

Medicare to Waive Late Enrollment Penalties for Some

Christian Worstell

by Christian Worstell | Published April 26, 2021 | Reviewed by John Krahnert

Relief is on the way for potentially thousands of Medicare patients. 

The federal government has ruled to issue a waiver for late-enrollment penalties that hit unsuspecting Medicare recipients who missed their enrollment deadline because they were already enrolled in another health insurance plan purchased on the individual marketplace.

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Medicare Initial Enrollment Period and Late Penalties

When you first become eligible for Medicare:

  • You have a seven-month Initial Enrollment Period in which to sign up.
  • Failure to sign up during this time may result in late-enrollment penalties once you finally do enroll.
  • The late enrollment penalty is not a one-time fee. Rather, it is tacked onto the Part B premium and paid for as long as you remain enrolled, causing you to suffer from late fees for many years.

The standard 2021 monthly premium for Medicare Part B is $148.50. The late enrollment penalty can be as much as a 10 percent premium markup for every 12 months that the person was not enrolled in Part B but could have been.

There's also a late enrollment penalty for Part A, if you don't qualify for premium-free Part A. Most people do qualify, since they've paid a sufficient amount of payroll taxes while working.

Enrollment Confusion

People may miss their enrollment deadline for a variety of reasons.

One common occurrence is that people who are already enrolled in an individual marketplace health insurance plan at the time of their Initial Enrollment Period do not bother to sign up because they already have health insurance. When they finally decide to make the switch from their own health insurance plan to Medicare Part B, they are hit with the penalty. 

This confusion has happened so often that Medicare has temporarily changed the rules to waive the late enrollment fees for people who were enrolled in other health insurance during their Initial Enrollment Period. 

In a statement, the Centers for Medicare & Medicaid Services (CMS) said: “CMS believes that many of these individuals did not receive the information necessary at the time of their Medicare IEP (Initial Enrollment Period) or initial enrollment in coverage through the marketplace to make an informed decision regarding their Medicare Part B enrollment.”

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