Essential Medicare Facts & Penalties Advisors Should Know on One Page

Part B: Everyone must pay a premium for Medicare Part B, which is deducted from your Social Security retirement payment. If you are eligible but have not yet started to receive a Social Security retirement benefit, Medicare will send you a bill. To calculate your cost for Medicare Part B, click here.

Part C: This is also known as a Medicare Advantage plan and is issued by a Medicare-approved private insurer. Even if you choose Medicare Part C, you must still pay a Part B premium. Although these plans cover all services in Part A and Part B, they often include additional benefits such as vision, dental, hearing and prescription drugs.

Part D: This part covers prescription drugs. All Medicare drug plans will have a list of approved drugs and a "tier" for each. A lower tier drug will generally cost less, and a higher tier drug will cost more.

• To find out what Medicare drug plans cover, click here.
• To find out how to get Part D coverage, click here.
• To learn about the cost of Medicare Part D, click here.

Late Enrollment Penalties

The window to enroll in Medicare begins on the first day of the third month prior to your birth month and ends on the last day of the third month following the month of your birth. I realize this may sound complicated, but it is not. For example, if your birthday occurs in August, your seven-month enrollment period would begin May 1 and end November 30. The consequence of enrolling late is rather severe. There is a separate "late-enrollment" penalty for Part B and Part D.

Part B Penalty: If you miss your enrollment window, your premium for Part B may increase by 10% for each full 12-month period you were eligible for coverage but did not have it. Moreover, if you are late, you may have to wait until the General Enrollment Period (Jan 1 to Mar 31) to enroll. Coverage will begin July 1 of that year. The additional premium will continue for as long as you have Medicare. It is perpetual. There are a few exceptions. For more information, click here.

Part D Penalty: You may be subject to a Medicare Part D late enrollment penalty if you go 63 continuous days (or more) beyond the end of your initial enrollment period and you did not have:

1. A Medicare Prescription Drug Plan
2. A Medicare Advantage Plan (Part C)
3. Another Medicare plan that offers prescription drug coverage, including a plan through an employer or union

The calculation for the Part D penalty can be found here.

If you have clients approaching 65, and your services extend beyond asset management, this is one area you can demonstrate added value.

Thanks for reading and have a great week!