What’s The Big Deal?

Guaranteed Acceptance

What’s the big deal?  At age 65 you are guaranteed to be accepted on any plan.  Beyond that birthday your health dictates your options.  This means that upon turning 65 if you have pre-existing conditions or severe chronic conditions, this is an important time to make the correct decision in your plan selection.

Medicare Advantage (Part C) plans will be the only plans available outside of a 65th birthday as there are no health questions associated with these plans effective 2021 and beyond. 

Network Restrictions

You must understand that not all Medicare plans allow you to see care outside of your region.  You must have a portable plan if you intend to travel.


What’s the big deal? Let’s talk about the potential penalties, both the prescription drug plans and the Part B have potential penalties for not enrolling.  
Usually the individual being assessed these penalties is caught totally off guard.

* Part B Penalty:  If not enrolled when first eligible for Medicare, outside of continuing to work and being covered under the employer’s group plan, the monthly premium may go up 10% for each 12-month period that the Part B eligible individual was not enrolled.  In most cases, this penalty is withheld along with the Part B premium after the enrollment begins.

Usually, a late enrollment penalty is avoided if you meet certain conditions that allow you to sign up for Part B during a Special Enrollment period.  

Case #1:  Client joined Medicare in 2007 and did not enroll in a drug plan.  They felt the additional $10 monthly expense for the plan was not necessary.  Fast forward to 2020 and two chronic conditions later, the medications were costing over $8,000 annually.  The client came to me for help and options.  The best option was to pay the Federal government’s assessed penalty of $55 per month, in addition to the regular monthly premium of $65 for a prescription plan which made their medications affordable.

$55 + $65 = $120 x 12 months = $1,440 (cost of the prescription plan, plus the penalty).  The cost savings, minus the small copays for the medications, save this client over $6,000 annually.

Case #2:  Client enrolled in Medicare Part A (hospitalization) only at age 65 while still employed until age 75.  The client relied upon his employer sponsored group coverage until age 75.  He then enrolled in Part B without penalty thanks to maintaining credible coverage between ages 65 and 75.

Without maintaining credible coverage between age 65 and 75, the penalty would have been:  10% per year x 10 years - 100%.  The Part B premium alone would have been double the $148.60, which is $297.20.