Medicare Part D Enrollment Penalty

I get a lot of questions about the various Medicare penalties and how much they cost.  I will summarize them here and then provide a link to a site which provides the specific detail.  Here is the overview.

Everyone who qualifies for Medicare does not need to pay for Part A of Medicare.  Some people do not qualify for part A and they need to pay a premium if they want the coverage.  For them, part A costs $451 a month but for most people it costs $0

Medicare Part B costs $99.90 a month for most people.  It can cost less for some people and more for higher income earners.  For example, an individual making over $85,000 a year will pay $139.90. The scale tops out at $319.70 a month for those that make over $214,000 a year.

If you sign up late for part B, you will pay a 10% penalty for every 12 months you didnt have part B, for life.   If you are over age 65, actively working and getting health coverage, you do not need to sign up for part B.  If you are not actively working and getting retirment coverage over the age of 65, you should sign up for part B because the penalty will count for you.

There are two Part D penalties.  The first is for those that sign up late for part D drug coverage.  The penalty is 1% of the average premium for every month you do not have a part D plan.  The average premium is about $31.00 a month which puts the penatly at about 30 cents for every month you do not have a plan.  The penatly never goes away.

There is also a Medicare Part D income penalty.   The penalty starts at about $11.00 a month for those that make over $85,000 a year.  It is added on to the insurance plans premium every month.   Here is a grid of the penalty levels

CMS has a very good page which summarizes this information.  You can see it by clicking here.