Medicare beneficiaries may face late-enrollment fees, but a congressional bill aims to inform them beforehand.

• The penalty for late enrollment in Part B is 10% of the standard premium for each month that you should have been enrolled but were not.
• The Senate bill proposes that the government mandate the disclosure of Medicare enrollment information to individuals aged 60 and above.
• The provision that was removed from a 2020 bill dealing with Medicare enrollment issues has been reinstated through a measure.

The newly proposed legislation in Congress aims to eliminate the late-enrollment fees that some new Medicare beneficiaries have to pay.

The proposed bipartisan legislation, presented in the Senate, mandates the federal government to furnish individuals with details about Medicare enrollment guidelines prior to their 65th birthday, which is when they become eligible for Medicare. Although many beneficiaries are automatically enrolled due to being on Social Security, this is not the case for all.

According to Lindsey Copeland, federal policy director for the Medicare Rights Center, an advocacy group, an increasing number of individuals are postponing retirement and not being automatically enrolled in Social Security, which may necessitate proactive enrollment and comprehension of the potential consequences.

Approximately 63.3 million individuals are enrolled in the government insurance program, with the majority being aged 65 or older. While most people do not pay any premium for Part A (hospital coverage), they pay a standard monthly premium of $170.10 for Part B (outpatient care) in 2022.

According to a 2019 report from the Medicare Payment Advisory Commission, the percentage of older people who are not automatically enrolled in Medicare has increased over time. In 2016, 40% of individuals eligible for Medicare at age 65 had to actively enroll, compared with just 8% in 2002.

Although there are no penalties for late enrollment in Part A, the same is not true for Part B. The penalty for signing up late for Part B is 10% of the standard premium for each year that you should have been enrolled but were not. This penalty increases annually as the premium adjusts. Additionally, these penalties are permanent.

The Medicare Rights Center reports that the average penalty for Part B beneficiaries in 2020 was 776,200, and this penalty increased their monthly premium by 27%. If the 2021 premium is $170.10, this would mean an additional $45.93 monthly or $216.03 total.

Medicare enrollment rules can be confusing, with deadlines to meet if you want to avoid penalties. For instance, although you can delay Part B enrollment at age 65 with qualifying insurance, such as through your employer, there are still specific timeframes to adhere to once that coverage expires.

Although you can challenge the charges, it's possible that the error was caused by a government official giving you incorrect information.

The late-enrollment penalty for Part D, which covers prescription drugs, is 1% of the national base premium ($33.37 in 2022) multiplied by the number of months you didn't have Part D or creditable coverage. This penalty lasts as long as you have Part D.

The new Senate bill proposes adding details on Medicare enrollment rules to Social Security statements for individuals aged 60 and above, to educate them about their responsibilities for signing up. This way, if they read their statements regularly, as is more likely among this age group as they approach retirement, they will be exposed to the information multiple times before actually needing to enroll.

The provision, which was included in 2020 legislation to address Medicare enrollment issues, was dropped from the Senate version and excluded from final passage.