Enrolling in Part B during general period incurs penalty Covering The Bases

I am 70 and retired many years ago. When I turned 65, I declined Medicare Part B because I was healthy. Now, I am second-guessing my decision. Without Part B, I have to pay full price for my doctor visits. I was told that I can enroll in Part B during a general enrollment period, but there will be a delay and a penalty. Can you explain?

Medicare Part B has three enrollment periods: an initial enrollment period when you turn 65, a special enrollment period if you carry health insurance from your current employer (or your spouse's current employer) and the general enrollment period. These enrollment periods are fully explained in the booklet, "Medicare and You," available online at www.medicare.gov.

If you join Medicare Part B during either the initial enrollment period or under a special enrollment period, you do not incur a late enrollment penalty, nor do you have a long delay before Part B becomes effective. However, there is a penalty and a delay when you enroll under the general enrollment period.

The general enrollment period runs every year from Jan. 1 until March 31. During this time, you may contact Social Security Administration (1-800-772-1213 or www.ssa.gov) to enroll into Part B. Your Medicare Part B will not be effective until the following July 1. You will pay a monthly penalty charge for your Medicare Part B.

There is a premium calculator tool available online at www.medicare.gov/eligibilitypremiumcalc. Choose the tab on the bottom right hand corner, "Calculate My Premium." While this online tool will provide a good estimate of your penalty, Social Security will calculate your exact penalty costs and add that amount to the monthly premium for Part B.

My wife and I just turned 65 and have been informed that since we are "higher-earners," we must pay a higher monthly Part B premium. We were also informed that we will also need to pay a higher monthly premium for our Part D drug coverage. Why is this so?

In the past 14 years, there have been two major pieces of legislation that changed how Medicare premiums are calculated.

In 2003, the Medicare Modernization Act increased the Medicare Part B (medical) premium rates for higher-income Medicare beneficiaries. The income-related Part B rates were implemented in 2007. In 2010, the Affordable Care Act expanded the higher rates to Medicare Part D (prescription drug) premiums. The income-related Part D premiums were implemented in 2011.

To determine who must pay the higher premiums, Social Security, Medicare and the IRS share data. An income threshold has been established and, if your income is above the threshold, you would be responsible for the higher premiums. The threshold is defined as: above $85,000 modified adjusted gross income for people filing an individual tax return or above $170,000 modified adjusted grow income for couples filing jointly. Modified adjusted income is a combination of your taxable income and your tax exempt interest income.

You may visit www.ssa.gov/pubs/EN-05-10536.pdf for a booklet that explains the premium rules for people with incomes above the aforementioned thresholds.

If you believe there are special circumstances (such as your income has decreased due to loss of work, death of a spouse or divorce) that would exempt you from the income-related premium increase, contact Social Security at 1-800-772-1213.

Amy Rubino is the director of the

Senior Health Insurance Assistance Program and the Senior Medicare Patrol for the Anne Arundel County Department of Aging and Disabilities. You may contact either program at 410-222-4257 or ship_program@aacounty.org.

Credit: Amy Rubino