Enrolling in Medicare can be stressful and confusing, but delay signing up and it can also set you back a bundle. Late enrollment penalties can hike a monthly premium by 10 percent or more - for the rest of your life.
More than 750,000 Medicare beneficiaries have made that mistake, boosting their Part B premiums, on average, by 30 percent, or an extra $440 a year. The problem is getting worse, too. With more people working past their 65th birthday and still getting health care coverage through their employers, they may not ask about Medicare until they miss their deadline.
Now a bipartisan bill introduced in Congress last month aims to reduce the number of seniors who get caught in that expensive trap - by simply telling people when to sign up.
More than 10,000 baby boomers turn 65 every day and become eligible for the federal insurance program that covers both seniors and the disabled, according to the Medicare Rights Center, a nonprofit national advocacy group. Most retirees, when they sign up for Social Security, are automatically enrolled in Medicare Part A, which pays for inpatient hospital care and rehab in a skilled nursing facility or nursing home.
Medicare Part B isn't an automatic thing, however. Though optional, this is the plan that covers medical services that people need more often, such as doctor visits, outpatient hospital services, x-rays, lab tests and mental health care.
Most boomers celebrating their 65th birthdays this year will pay about $122 a month for Part B coverage if they enroll three months before or after their birthday. It's up to each person to enroll within their window of eligibility or risk hefty surcharges, significant gaps in coverage and lack of access to health services.
But even if you have coverage from current work, beware -- if that work is for an employer with fewer than 20 employees, it will become secondary to Medicare, causing gaps in coverage and access problems. Once the coverage from current work, or the work, ends, time is ticking again to enroll or face premium increases and gaps in coverage.
"It's costly to your health and your finances," said Deane Beebe, of the Medicare Rights Center. "Most people don't realize they have a problem until they see a doctor."
And the problem is getting more common, Beebe said, because people are working longer and the age for receiving Social Security benefits has climbed to 66 and no longer syncs up with Medicare eligibility.
The proposed bill, called the Beneficiary Enrollment Notification and Eligibility Simplication (BENES) Act, would twice alert people nearing retirement age by mail with a detailed notice explaining the Part B rules.
Right now, there is no notice.
Reps. Patrick Meehan (R-PA) and Raul Ruiz (D-CA) and Sens. Bob Casey (D-PA) and Chuck Schumer (D-NY) have sponsored the legislation in their respective houses.
"I've had seniors contact my office and say they simply had no idea of existing deadlines - or that they faced penalties down the road for missing them," Meehan said. "This commonsense legislation will fix that, and it will help Medicare more effectively serve Pennsylvania's seniors."
The bill would also streamline the enrollment process and protect people who unintentionally delay signing up or receive incorrect information about Part B from a federal employee.