How to Avoid Late Penalties When Enrolling in Medicare

Don't miss the Medicare open enrollment window. Open enrollment begins October 15th and ends December 7th.

Table of Contents

If you do not enroll in Medicare on time, you will be penalized 10% of the premium cost for each year you wait past the time you should enroll. The penalty is applied both to Part B (medical) and Part D (drug plan). More important than the penalty is that you may be without health insurance coverage because most private health insurance plans stop coverage at age 65.

As the open enrollment period for Medicare approaches (October 15th through December 7th) many people at or near 65 will have their mailboxes filled up with offers for Medicare Advantage and Medicare Supplement plans. It is a lot of information to go through and, often, one of the most important questions isn’t answered: “When should I enroll in Medicare?”

As is of often the case, the answer is “it depends.” There are three different enrollment periods that you need to be aware of, depending on your circumstances.

Initial Enrollment Period

If you are turning 65 and are not covered by a group employer plan with 20 or more participants—either through your own employment or your spouse’s—you should enroll the month you turn 65, or three months before or after you turn 65. Of these three periods, it is best to enroll three months before so that you can have Medicare start the month you turn 65.

If you are covered by a group employer plan, you can delay starting Part B (the part you pay for) and Part D (drug plan that you also pay for). You should ask your group plan if you should start Part A (hospitalization coverage that you do not pay for). You may be advised to go ahead and start Part A.

Special Enrollment Period

If you were covered by a group plan when you reached 65 and did not enroll because of that, you should enroll in Parts B and D (and A if not already started) any time before coverage ends, once you know what that date is. You have a grace period—where you aren’t penalized—of 8 months after group coverage ends for Part B. The grace period to avoid Part D penalties is 63 days. Often of more importance than the penalty is that you may be without coverage. To enroll during this period, you will need to have a letter from your group plan confirming that you had credible coverage up to the point you are enrolling.

General Enrollment Period

The general enrollment period is for people who messed up and missed either the initial or special enrollment periods. This period is from January 1st through March 31st. Unfortunately, if you are enrolling in the general enrollment period your coverage does not start until July 1st. This means you could potentially be without coverage for several months. For instance, if you turn 65 in December and don’t enroll in the initial enrollment period or the three months after you turned 65 you would not be able to enroll until the following January, with coverage starting the following July.

How to Enroll

To enroll in Medicare, your first step is to visit the Social Security website ( Once on the website, follow these three steps:

1: Click on the Menu button at the top of the page.


2: Go to Benefits and then click the link for Medicare.


3: Scroll down until you reach the blue button titled “Apply for Medicare Only.” Click the button and start the application process.


Once you have your Medicare card, you can start the process of applying for either a Medicare Supplement or Medicare Advantage, as well as the Part D drug plan.

If you would like to meet with a Medicare expert, fill out the form below and we will be in touch to schedule an appointment.

Subscribe to the Eagle's Nest Webcast

Every Thursday at 2 pm MST our advisors discuss current events, financial planning topics, and take questions from attendees. Sign-up below to get access to the webcast and to receive email notifications for each week’s talking points. 

Presidential 2020 Key Data Reference Guide

Request your complimentary copy. Digital and print versions available.

Subscribe to our Newsletter

The Presidential newsletter delivers our latest articles, podcasts, offers, classes, and events straight to your inbox. Fill out the form below to subscribe. 

2020 Key Data Guide

Fill out the form and you will receive a pdf copy. Select Yes for a print copy and we will send one in the mail.

The Presidential Newsletter

The Presidential newsletter delivers our latest articles, podcasts, offers, classes, and events straight to your inbox. Fill out the form to subscribe and we’ll do the rest!

Subscribe now