'Struggling to survive': Pennsylvania retiree slapped with lifetime penalty for delaying Medicare sign-up when she was 'too poor to afford insurance' — how you can avoid this costly mistake

Bethan Moorcraft
'Struggling to survive': Pennsylvania retiree slapped with lifetime penalty for delaying Medicare sign-up when she was 'too poor to afford insurance' — how you can avoid this costly mistake
'Struggling to survive': Pennsylvania retiree slapped with lifetime penalty for delaying Medicare sign-up when she was 'too poor to afford insurance' — how you can avoid this costly mistake

When it comes to Medicare, one seemingly minor misstep can saddle you with a lifetime of misery. Marian Leonard learned this the hard way.

When she turned 65, Leonard signed up for Social Security benefits but she delayed her enrollment into Medicare because, at the time, she simply didn’t have the cash to cover the premiums.

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She had just returned to the U.S. from a four-year stint in Germany and she and her husband were both living off their savings and her monthly Social Security benefit of $1,200, while they worked on a fixer-upper house in Pennsylvania.

They weren’t poor but they were cash strapped — to the point where they were “struggling to survive,” she told Reuters.

Leonard signed up for Medicare four years later and was shocked to learn her premiums will forever be bumped up by 40% because of her late enrollment. Now, she claims she’s being “penalized for having been too poor to afford Medicare.”

Here’s what happened — and how you can avoid this costly mistake, even with a tight budget.

Medicare enrollment

People commonly sign up for Medicare Part A (hospital insurance) and Part B (medical insurance) when they’re first eligible. This initial enrollment period typically starts three months before you turn 65 and ends three months after you turn 65.

There are risks to signing up later, such as having a gap in health care coverage or having to pay a late enrollment penalty — but in some cases, it can make sense to sign up later.

You may consider delaying your enrollment into Medicare if you have other health care insurance coverage that is similar in value — for instance, through your employer or your spouse’s employer if you continue to work beyond the average retirement age.

But if you do this without meeting Medicare’s strict guidelines, you may suffer the same fate as Leonard and be slapped with a late enrollment penalty, which will be added to your monthly premium for as long as you hold that coverage. For many, that’s a lifetime penalty.

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Late enrollment penalties

The late enrollment penalties for Medicare Part A , Part B and Part D (prescription drug) coverage all differ. Typically, they go up the longer you wait to sign up.

In Leonard’s case, she opted to forego Medicare Part B in 2019 because she did not feel she could afford the $135.50 monthly premium at that time.

If you delay your enrollment for Part B coverage — and you do not qualify for a special enrollment period — you’ll have to pay an extra 10% for each year you could have signed up, but didn’t.

Leonard enrolled into Medicare in 2023 after her husband passed away, according to Reuters, and she started collecting a Social Security survivor benefit, which allowed her to afford the extra expense.

However, that four-year delay left her burdened with a lifetime 40% late enrollment penalty.

In 2024, the standard Part B monthly premium is $174.70. With a 40%, or $70.60, surcharge slapped on top of that, Leonard has to pay $245.30 per month for coverage — or almost $850 more this year than someone who signed up for Medicare on time.

“In what world does it make sense to penalize somebody who is already struggling to survive for no other reason than they were too poor to afford insurance sooner?” she aked.

Help is available

If covering your Medicare premiums is an insurmountable financial hurdle, you may be able to get help through a Medicare Savings Program (MSP, administered by Medicaid.

MSPs are federally-funded programs run by each individual state, which are intended to help people with little income or resources pay for their Medicare premiums, deductibles, copayments and coinsurance.

According to the National Council on Aging, enrollment in MSPs puts thousands of dollars back into the wallets of older American and adults with disabilities each year.

In addition, if you enroll into an MSP, you will automatically qualify for the Medicare Part D Low-Income Subsidy, also known as the Extra Help program, which helps cover the cost of prescription drugs — to an annual value of around $5,300, per Social Security Administration estimates.

Why didn’t Leonard take advantage of an MSP? She had a small retirement nest egg as well as her Social Security benefits, meaning she likely did not hit the low income qualifications, per Reuters — despite feeling “too poor” to sign up for Medicare in 2019.

This unfortunate case serves as a reminder for older Americans approaching retirement not to delay Medicare enrollment once you’ve finished working as you’ll only have to pay more down the line.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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