If you're considering delaying enrollment into Original Medicare Parts A and B, don't go anywhere. In this video, we'll go over what you need to know about Medicare's late enrollment penalties.

My name is Lindsay Engle, and I'm the Medicare Expert for Elite Insurance Partners and MedicareFAQ.com. When you first become eligible for Medicare, you may consider delaying enrollment. However, there are penalties associated with delaying enrollment in Medicare. We're here to explain what they are and how to avoid them.

Part A is your inpatient or hospital coverage. Most people are entitled to premium-free Part A, as long as they paid into enough quarters while still working. The late enrollment penalty for Part A is 10% of the current Part A premium. You'll pay this for twice the number of years you were eligible but didn't enroll.

For example, if you were eligible for two years but never signed up, you would have to pay 10% above the standard premium for four years.

Part B is your outpatient or doctor's coverage. The Part B penalty is 10% above the standard premium for every 12 months you went without coverage. Unlike Part A penalty, the Part B penalty is lifelong. The only way around it is if you're eligible for a Special Enrollment Period.

An example of the Part B penalty is if you were eligible for coverage in November 2013 but chose not to enroll until March 2017. This would mean you delayed enrolling for 40 months, or three years and five months. This time would count as three full 12-month periods, meaning you would have to pay a late enrollment penalty for 30% above the standard premium.

Now, how do you avoid both of these penalties? To avoid the Part A and Part B penalties, you'll want to enroll when you're first eligible; during your Initial Enrollment Period.

Your Initial Enrollment Period starts three months before the month of your birthday includes the month of your birthday, and continues three months after. Once you miss your seven-month IEP, you may begin to incur penalties, unless you're eligible for a Special Enrollment Period.

The majority of beneficiaries choose to enroll in Part A because it's premium-free for most. The most common reason for delaying Part B is if you have group employer coverage and your employer has more than 20 employees. In this case, the coverage is considered creditable, and you can delay enrollment into Part B with no penalty.

One of the most common questions we receive is if there's a cap on the Part B penalty. Unfortunately, at this time, there is no cap.

Another thing to note is if you're eligible for Medicare due to a disability and were paying penalties on your premiums, the premiums will be eliminated once you turn 65.

If you feel that the penalties you have incurred shouldn't have applied to you, you can submit a reconsideration request to Medicare. [LINK HERE]

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