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New To Medicare Law Benefits Seniors Turning 65

A new Medicare law benefits seniors. Not all seniors sign up for Medicare in a timely manner. Some 776,000 seniors are paying a significant a Medicare Late Enrollment Penalty, some of which will be addressed by the new law starting January 1.

The new law is the Beneficiary Enrollment Notification and Eligibility Simplification (BENES) 2.0 Act.

This law will help some seniors avoid the penalty which causes their Medicare premiums to be about 27% higher than what they would have been had they not been subject to the penalty.

ADVICE FOR THOSE AGE 64. That said, the law misses a key educational component. Action still needs to be taken in a timely manner experts recommend. While some people are automatically enrolled into Medicare, many are not. That can result in these costly penalties.

Law Apparently Fails To Educate All Turning 65

Among the many helpful provisions, the initially proposed version of the BENES Act directed the federal government to provide advance notice to individuals approaching Medicare eligibility (typically age 65).

However, it appears that this provision was omitted in the final bill that was signed into law.

“This could especially impact those who delay taking Social Security,” explains Jesse Slome, director of the American Association for Medicare Supplement Insurance.  “They may be waiting until age 66 or even age 70 and forget that they have to sign up for Medicare at age 65.”

Slome notes that some incorrectly think they can sign up for Medicare when they sign up for Social Security. “But that’s not the case,” he adds.

The Medicare insurance expert suggests that those turning age 64 start learning about Medicare and the process of enrolling.

What Medicare Expects When You Become Eligible

People eligible for Medicare (‘beneficiaries’) have a 7-month initial enrollment period to sign-up for Medicare Parts A & B.

Individuals who enroll in Part B after this initial enrollment period and/or reenroll after a termination of coverage may be subject to a late-enrollment penalty.

The penalty is equal to a 10% surcharge for each 12 months of delay in enrollment and/or reenrollment.

TIP: Under some situations, some beneficiaries may be exempt from the late-enrollment penalty. These situations may include working individuals (and their spouses) who have group coverage through their current employment. Also included can be international volunteers.

The Medicare Late Enrollment Penalty

The American Association for Medicare Supplement Insurance (AAMSI) applauds the new rules. But we caution individuals that despite good intentions, they are still complicated.

“Medicare is an enormously complex institution,” states Jesse Slome, director of the organization. “Making the right choices at the right time is important because while many things can be changed in the future, that is not true about everything. Some choices are not reversible.”

AAMSI encourages people who are approaching Medicare eligibility to research their Medicare coverage options and enrollment deadlines.

“Medicare is a national program but choices are local,” Slome adds. “The different plans available in your city or town may not be available on the other side of your state.”  For that reason, the Association strongly suggests consumers seek out a local Medicare insurance agent or broker.


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About the Author

Jesse Slome

Jesse Slome
Medicare Insurance Expert
Director, American Association for Medicare Supplement Insurance

Jesse Slome is a leading Medicare insurance expert and the founder and director of the American Association for Medicare Supplement Insurance (AAMSI). Since 1998 AAMSI has served to educate consumers and support insurance professionals who offer Medicare insurance plans.