Medicare Part B Fairness Act Would Relieve Part B Penalties

Medicare Part B Fairness Act Would Relieve Part B Penalties

Earlier this year, Representatives Katie Hill (D-CA-25) and Brian Babin (R-TX-36) introduced the Medicare Part B Fairness Act (H.R. 1788). This bill would limit the amount and duration of the Medicare Part B late enrollment penalty and expand the Special Enrollment Period to people with other forms of pre-Medicare insurance (such as COBRA and retiree insurance) outside of employer-sponsored group health plans. These simple but significant changes would increase the economic security for many Medicare beneficiaries.

 

The Medicare Part B late enrollment penalty (LEP) is intended to encourage people to enroll in Medicare. Yet, too often people making honest mistakes or just not knowing the consequences of not enrolling, are then stuck with a hefty lifetime Part B penalty — and all because they didn’t enroll in Medicare Part B when first eligible.

 

In the past, when most people started receiving Social Security benefits at the same time they were eligible for Medicare, this wasn’t as big of a problem. This is because if someone starts receiving Social Security benefits at age 65 when they’re also eligible for Medicare, they are automatically enrolled in Medicare Parts A and B. Yet, more and more people are working later and/or getting their Social Security benefits at age 67 or later. This means they are not automatically enrolled in Medicare Part B at age 65 and may not even know they are “supposed to enroll” at 65, or that they will accrue a lifetime penalty if they do not.

 

Currently, the Medicare Part B penalty is 10% of the Part B premium for every 12 months a person has been eligible for Medicare but not enrolled. And that extra payment is paid for the rest of that person’s life.

 

As of 2017, over 700.000 people are paying the Medicare Part B late enrollment penalty, with the average penalty being a 31% increase in their Part B premium cost. That means paying $182.75/month for Medicare Part B instead of $135.50/month in 2019. This new legislation would limit the penalty amount to no more than 15% of the current premium and limit the penalty duration to twice the period of delayed enrollment.

 

Please join us in support this legislation, H.R. 1788. You can read the bill here.

Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.