Douglas, 65, is in excellent health and has a family history of longevity. He has decided to delay taking Social Security benefits until age 70 to maximize his monthly payments. He is eligible to sign up for Medicare at age 65. Should he sign up now or wait until he begins taking Social Security?

Douglas should sign up for Medicare Part A, even if the continues working. Part A comes at no cost to the insured and may provide supplemental insurance for expenses that an employment health care plan doesn’t cover.

Individuals must sign up for Medicare Part B, during the initial enrollment period (IEP) beginning on the date that one turns 65 and ending at the end of the third month thereafter, for those not covered on an employee plan.

A special enrollment period (SEP) extends that deadline, if the individual is covered by a health insurance plan of an employer for which the individual or  a spouse works. This extension ends up to eight months after employment or coverage ends, whichever comes first.

If Douglas fails to meet the deadline of IEP or SEP, whichever applies to him, he will not be able to sign up for Part B until the next enrollment period, which runs from Jan 1 to March 31. He will be liable for a 10% penalty for each full 12-month period he is not covered.

This penalty will be added to his premium for Part B for as long as he is enrolled. For example, if Douglas waited 5 years to sign up for Part B, his monthly premiums will be 50% higher than they would have been had he signed up on time.

Douglas will owe a late enrollment penalty for any continuous period of 63 days or more that he goes without drug cover either from Medicare, Part D, a Medicare Advantage Plan (Part C) or a credible prescription drug plan as defined by Medicare. The penalty is calculated by multiplying 1% of the of the "national base beneficiary premium" ($32.74 in 2020) times the number of full, uncovered months he didn't have Part D or creditable coverage. 

Sandra W. Reed is an attorney with Katten & Benson, an Elder Law firm handling probate of estates, wills, trusts and Medicaid planning in Fort Worth. She lives in beautiful Somervell County, near Chalk Mountain.