Q. My wife went on Medicare because of disability in 1995, but later dropped Part B because she was covered on my employer’s health plan. When I lost my insurance, she went back on Part B. But she has to pay a large late penalty on top of her premiums. She’s currently 63. Is there any way out of this situation?
A. Yes. When your wife turns 65, she’ll no longer pay the Part B late penalty. Here’s why:
When you qualify for Social Security disability payments under age 65, after a time you also become entitled to Medicare health coverage. You receive Medicare Part A (hospital services) automatically and can choose to enroll in Part B (doctors and other outpatient services) within a certain time frame. This time frame counts as your “initial enrollment period.” If you don’t sign up for Part B during this time, or enroll and drop out later on, you’ll incur a late penalty if you do finally enroll in Part B while still under age 65. The late penalty is an additional 10 percent of the Part B premium for each full year that you were without Part B when you were eligible for it.
But everything changes when you reach 65. At the end of the month before the month in which you turn 65, you lose your entitlement to Medicare based on disability. At the beginning of the month you turn 65, your entitlement to Medicare based on becoming 65 begins. In other words, you get a second initial enrollment period. At that point the clock is reset, and Medicare coverage begins anew as though you’d never had it before.
This arrangement means that if you were paying any late penalties for Part B or Part D (drug coverage), you will no longer do so.
Also, if you were unable to buy Medicare supplemental insurance (also known as Medigap) in the past or had to pay high premiums to get it, once you turn 65 you get a guaranteed right to buy it. Provided that you purchase a Medigap policy within six months of enrolling in Part B (in this case, when you turn 65), you cannot be denied coverage and you cannot be charged a higher premium because of your age or any preexisting medical conditions. So, if you already have a Medigap policy, you may find it costs less once you turn 65 — and you’ll find more policies available to you if you want to shop around.
Patricia Barry is a senior editor at the AARP Bulletin.