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Is There a Penalty for Not Enrolling in Medicare Part A at Age 65?

October 25, 2023

Is There a Penalty for Not Enrolling in Medicare Part A at Age 65?

If you're approaching age 65, you may have a few questions about Medicare coverage. Medicare is a federal health insurance program that's available to those who are 65 years of age and older. It's made up of several different health insurance plans, covering specific areas such as hospital insurance, medical insurance, or drug coverage. Physical health is a top priority when you get older, and having a reliable health plan is the best way to cover the costs of health care. But is there a penalty for not enrolling in Medicare Part A at age 65? Keep reading below to find out everything you need to know about the general enrollment period and any late enrollment penalties.

 

What is Medicare Part A?

Medicare Part A is under Original Medicare. Part A is also referred to as hospital insurance because it helps cover inpatient care in hospitals, home health care, hospice care, and even skilled nurse facility care. Medicare doesn't typically cover the full cost of care and you'll likely be responsible for some portion of the cost. Most older adults do not pay for Part A if they or a spouse have 40 or more quarters of Medicare-covered employment.

 

Some of the services included in Part A involve hospital care; room and board, medication administration, and wound care at a skilled nursing facility; skilled care; and even hospice care for the terminally ill. For additional coverage, you'll need to find other Medicare supplement plans.
 

How do I know if I am eligible for Medicare enrollment?

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Generally speaking, Medicare is for adults age 65 or older. Some individuals may also qualify for Medicare if they have a disability, End-Stage Renal Disease (ESRD), or Amyotrophic Lateral Sclerosis (ALS). Most people who fall into these categories will be eligible for Part A for free. But there are some individuals who may need to pay a premium. In order to be eligible for Part A without cost, the individual must meet the following requirements:

  • Be 65 years or older or have a disability
  • Be entitled to receive Medicare based on their earnings or the earnings of their spouse, parent, or child
  • Have 40 or more quarters of coverage earned through payroll taxes
  • File an application with Social Security or Railroad Retirement Board benefits

There are also eligibility calculators available to help you estimate your eligibility for Medicare.


 

Are you automatically enrolled in Medicare when you turn 65?

Some people will need to sign up for Medicare when they're eligible. But if you're already receiving Social Security benefits by age 65, you will be automatically enrolled in Part A and Part B. Keep in mind that Part B does require a premium, so you do have the option of turning down coverage for this part.


When is the enrollment period for Medicare?

There are three main enrollment periods for Medicare: initial, general, and special. Before you can learn if there is a penalty for not enrolling in Medicare Part A at age 65, you'll need to find out which period is most relevant to you and your qualifications.

 

Initial Enrollment Period

Your initial enrollment period begins approximately three months before you turn 65. This enrollment period typically lasts for seven months, ending three months after you turn 65 years of age. If you miss this enrollment, you may have to wait to sign up.

 

General Enrollment Period

There's also a general enrollment period which is anywhere between January 1 and March 31 every year. This is typically for those who missed the initial enrollment window for Parts A and B. Health coverage will begin a month after you sign up.

 

Special Enrollment Period

If you missed the enrollment window, you may still be eligible to sign up during the special enrollment period. For example, if you lose Medicaid coverage, you can sign up for Medicare six months after your Medicaid coverage ends. You're also eligible if you missed the chance to sign up because you were impacted by a natural disaster or an emergency. If you received misleading information from your health plan or employer, or if you were released from incarceration, special enrollment may also be relevant to you.
 

Am I penalized for not enrolling in Medicare at Age 65?

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Now that you're aware of how enrollment and eligibility works, you may be thinking, "Is there a penalty for not enrolling in Medicare Part A at age 65?" The answer to this question will depend on whether you qualify for premium-free Part A coverage. You don't have to pay for Part A if you're eligible for retirement and paid Medicare taxes while working for 10 years. But if you don't qualify and have to pay for Part A, then you will be penalized for not enrolling if you don't sign up when you're first eligible. In this case, your monthly premium may go up 10 percent.

Another thing to note is that you may have to pay the penalty for twice the number of years that you didn't sign up. For example, if you had Medicare eligibility and didn't sign up for three years, you may have to pay a higher premium for six years.

 

Do I need to sign up for Medicare if I'm still working?

Enrolling in Medicare will work differently if you're still working. If you qualify for premium-free Part A, you can choose to sign up when you turn 65 or anytime later than that. You can also wait until you or your spouse stops working to sign up for Part B. Keep in mind that your work-based insurance will provide primary coverage while Medicare pays second.

 

How much is the Medicare Part A late enrollment penalty?

The late enrollment penalty is not a one-time late fee. Your monthly premium will be affected and go up 10 percent if you don't enroll on time. It may go up the longer you wait to sign up. It's all based on how long you go without health coverage. If you sign up late, you may also have a gap in your coverage.

 

Another thing to note is that you're not liable for late penalties if your state pays your Part A premiums under one of the Medicare Savings Programs. Living abroad also affects your enrollment. You can also avoid incurring late penalties if you're covered by Medicaid, a federally financed health program for those who earn under a certain amount in income.


Altogether, it's vital to stay informed regarding Medicare enrollment. Delaying enrollment can have financial consequences and may even cause gaps in coverage. Thankfully, the guide above goes through all the different aspects of late enrollment penalties. So, now you won't have to wonder if there is a penalty for not enrolling in Medicare Part A at age 65. The answers to the most common questions can be found above or within our Learning Center. For other questions, feel free to contact any of our licensed insurance agents.

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