Q. My wife and I mistakenly signed up late for Medicare Part B and were assessed late enrollment penalties, which continue for life. Is there any way to request that they be eliminated?

A.  Possibly, if you meet the criteria for forgiveness and apply by the new deadline of September 30, 2018.

Some background may be helpful:  Medicare generally requires that all persons turning age 65 sign up for Medicare Part B during their Initial Enrollment Period which is 3 months before and 3 months after their 65th birthday. If they fail to do so, Medicare assesses a 10% premium penalty for each year of delay, and the penalty continues for life.

By way of example, if you turned 65 in 2010 and delayed signing up for Part B until the year 2017, your monthly premium would be 70% higher. The standard base Part B premium of $134, boosted by this additional penalty, would now be $227.80 per month. That excess premium payment accumulates to over $1,125 per year.  Over the next 30 years it amounts to almost $34,000, and for you and your wife, together, it is double that amount. In a word, the cumulative effect of the late filing penalty is significant. Medicare’s rationale:  to encourage younger and usually healthier seniors to enroll when first eligible and thereby help stabilize the cost of the Part B program.

Medicare has recognized that the reason many persons delayed enrolling was due to a misunderstanding about the enrollment requirement. Specifically, seniors who enrolled in marketplace health insurance plans obtained through Covered California believed that they were in full compliance with the need to enroll, or that enrollment in Part B was unnecessary since they had private insurance coverage.  This was especially true for those who received government subsidies to help with the premium cost, as the subsidies sometimes made their premiums cheaper than the basic Medicare Part B premium.

Medicare also became aware that seniors who inquired about this issue, or asked about the elimination of penalties, were mistakenly given inaccurate information by the staff at the local social security offices.

As a result, the Center for Medicare and Medicaid Services (“CMS”) previously created an opportunity for seniors to seek equitable relief from their inadvertent late enrollment. Applicants seeking relief were originally required to apply by September 30, 2017.  Just recently, that deadline was extended to September 30, 2018. As before, seniors seeking relief must be able to show that they were enrolled in a market place health insurance plan during their Initial Enrollment Period that began after April 1, 2013 (or their Special enrollment Period if they were working or disabled), that they actually enrolled in Part B during the General Enrollment Periods in 2015, 2016, 2017, or 2018, and are entitled to premium-free Part A Medicare Coverage.

The relief will be granted on a case by case basis and the rules are complex.  If you believe you may qualify, you should visit your local Social Security Office and bring with you evidence of your enrollment in a market place health insurance plan during the Open Enrollment Period around your 65th birthday.  To make sure that the folks at the Social Security office properly evaluate your application, it might be wise to bring along a copy of this article, the “Emergency Message from Social Security”  regarding this matter, and the CMS bulletin entitled  “Assistance for Individuals with Medicare Part A and Exchange Coverage Information for SHIPs and Exchange Assisters”.

Other References:  (1) Medicare Late Enrollment Penalty 

(2) Article in Reuters: “U.S. Medicare expands offer to reverse late enrollment penalties”

(3) To assist seniors in avoiding these penalties, legislation has been introduced in Congress to simplify the notification to seniors about their need to timely enroll in Medicare. The bill is known as the BENES Act (S.1909 / H.R. 2575)  which is short for the “Beneficiary Enrollment Notification and Eligibility Simplification Act”.