delay, yet avoid Medicare Part B penalty?

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Topic Author
pac627
Posts: 9
Joined: Tue May 22, 2012 7:30 am

delay, yet avoid Medicare Part B penalty?

Post by pac627 »

I understand the enrollment period for Medicare part B ends 3 months after you turn 65. So, I turn 65 in August 2013 therefore it ends the end of November 2013 for me. I was thinking of signing up in October or November and then with the 3 month start delay, my part B would start in January or February. (no penalty)

However, there is also the open enrollment period starting in January, where you can sign up and your part B would start in July.

I have read the medicare part B info and it says that for each 12 month period you delay enrollment in Medicare Part B, you will have to pay a 10 percent Part B premium penalty. When talking about calculating the penalty it often mentions each FULL 12 month delay and gives the example:
“ Example of Part B penalty: Mr. Smith's initial enrollment period ended September 30, 2008. He waited to sign up for Part B until the General Enrollment Period in March 2011. His Part B premium penalty is 20%. (While Mr. Smith waited a total of 30 months to sign up, this included only 2 full 12-month periods.)”

Therefore, neither a signup in January 2014 during the open enrollment period, nor the start in July 2014, would be a FULL 12 month delay given my 65th birthday will have been in August 2013.

So, therefore, am I thinking about this correctly? That is, I could sign up in January 2014, less than a FULL 12 months since my August 2013 birthday, and pay a penalty free premium for part B when my Part B would start in July 2014? (July also being less than a FULL 12 months since my August birthday)

Thank you for your thoughts on this.
Alan S.
Posts: 12669
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: delay, yet avoid Medicare Part B penalty?

Post by Alan S. »

The Federal website certainly suggests that you would not have a penalty in your proposed situation, since their examples continually emphasize full 12 month periods. Further, if they were going to treat the initial year any differently than the 30 month examples, they should say so. Perhaps they are being vague on purpose???

Note that if you are receiving SS retirement benefits at 65, you will be automatically enrolled in Part B and will receive your card in the mail. You then have the opportunity to decline the coverage if you wish, but must take appropriate action.

Finally, since the 10% penalty is for life, and this year would be 10.49 per month, as Part B premiums increase in the future, your surcharge of 10% would be based on each year's premium. If your future modified AGI is high enough for IRMAA, including Obama's proposed increased tiers of surcharges in the future, your 10% would be multiplied by the IRMAA surcharges. Therefore, I think you need to be real sure that you are exempt from penalty under the full 12 month provision and they will not charge 10% or even a pro rated 10% by the month.

When you enter your specifics into their calculator, the results are still to vague to bank on given the lifetime dollars at stake.

I would try to get this in writing from HHS if I were you to avoid a bureaucratic nightmare if some clerk charges you 10% because their understanding is as clear as their website. :idea:
gkaplan
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Joined: Sat Mar 03, 2007 7:34 pm
Location: Portland, Oregon

Re: delay, yet avoid Medicare Part B penalty?

Post by gkaplan »

Are you still working? Are you covered by your employer's health benefit plan? If the answer to both questions is yes, then, as I understand it, you have an eight month window from the time you retired to enroll in Medicare B without incurring a penalty.
Gordon
Topic Author
pac627
Posts: 9
Joined: Tue May 22, 2012 7:30 am

Re: delay, yet avoid Medicare Part B penalty?

Post by pac627 »

Thank you both for your comments. That is kind of you to take the time to reply.

I am currently receiving social security survivor benefits. The Medicare card came today!

I am going to decline the Part B for now and at the earliest will sign up for it in November. Hopefully, I will be able to definitively determine if my idea to sign up in January during the open enrollment could delay penalty free til July. I will give them a call, and if that will be true look to obtain written verification of it.

My concern is what you mentioned, Alan, that I don’t want to incur a bureaucratic nightmare if some clerk charges 10% because their understanding is as clear as their website.

I hadn’t even thought of the IRMAA surcharges. I looked into that somewhat today and I am fairly sure my income won’t be high enough to incur them. But thank you for mentioning that, I will look into that in more detail.
ilskeptic
Posts: 61
Joined: Wed Feb 10, 2010 10:35 am

Re: delay, yet avoid Medicare Part B penalty?

Post by ilskeptic »

My question is, "Why?" To save $104.90 a month for three or four months? Or even 11 months? What if you get sick/injured enough to need Part B services during that period? Just seems like tempting fate for not much reason. Am I missing something obvious?
Topic Author
pac627
Posts: 9
Joined: Tue May 22, 2012 7:30 am

Re: delay, yet avoid Medicare Part B penalty?

Post by pac627 »

[quote="ilskeptic" Just seems like tempting fate for not much reason. [/quote]


Not so much. I also have Federal BCBS because of also having civil service surviver pension.
ilskeptic
Posts: 61
Joined: Wed Feb 10, 2010 10:35 am

Re: delay, yet avoid Medicare Part B penalty?

Post by ilskeptic »

Aaaah, OK. But just to check: Federal Blue Cross doesn't require you to sign up for Part B as soon as you're eligible? That's the case with a lot of government retiree health policies (at least it is with the ones I'm familiar with in Illinois).
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