Dear Toni:
I lost my job July 2017. My wife and I have enrolled in Medicare Part B in January 2019 since COBRA’s almost over…Now I am finding out that there will be a penalty for us not enrolling when we should have. I have never received a Medicare & You handbook to know how or when to enroll in Medicare properly. I was unaware of an 8-month Medicare Part B enrollment rule. Thought I had to wait until our COBRA ended to enroll in Medicare Part B.
We are now 70 years old and Social Security said in a letter we received last week that the Part B penalty for us is each 50% because it is 5 years since we were 65. Please inform your readers how important it is to enroll at the correct time.
Rick from San Antonio, TX
Hello Rick:
You are right that people should not wait to enroll in Medicare Part B when no longer working full-time with true company benefits. Enrolling in COBRA does not keep one from the “famous” Medicare Part B penalty. America needs to be aware that this penalty can be extremely costly and will last until you pass away or are no longer on Medicare.
The Medicare & You handbook explains that the 8-month Medicare enrollment rule after 65 begins the month after one is no longer working full-time or your employer group health benefits ends, whichever comes first. The handbook also states that COBRA or retirement benefits are not considered coverage based on current employment.
During a Toni Says® Medicare consultation, we advise those leaving employer benefits after 65, not to wait and enroll in Medicare Part B as soon as possible. Don’t wait!
Many enroll in their Part B with a BIG SURPRISE like you have Rick…. they find they are penalized because they could have had Part B but didn’t enroll. The penalty goes all the way back to the day he/she turned 65.
I have a client who is 79 years old and had always been on his wife’s company health plan. He never enrolled in Medicare’s Part B because his wife was the “working spouse”, but she lost her job … She was 62 and because she had health issues and the cost of COBRA was less than an individual health plan, she enrolled herself and her 79-year-old husband in COBRA.
When COBRA ended 18months later, they went to Social Security to enroll him in Part B and were shocked!!! His premium for Part B was not $135.50. It was $135.50 plus $189.70 penalty for late enrollment for a total of $325.20 per month. This was a 140% penalty (79-65) which is 14 years x 10% each month for the rest of his Medicare life. He did not enroll in “Part B” at the right time or the correct way!
What happens when the Medicare Part B premium increases? Your penalty amount will increase. The penalty amount will not stay the same each year.
Toni Says®: Always have Medicare Part B in place when leaving your job or losing your company benefits and want to enroll in COBRA because the penalty goes back to the day you turn 65. Chapter 1 of the new Medicare Survival Guide Advanced edition explains the rules of enrolling in Medicare the right way.
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