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Is Your Medicare Late Penalty a Mistake?

Copyright © 2014 AARP. All rights reserved.

Mistakes in Medicare coverage and penalties do happen. Government bureaucracies are certainly not immune to human error and computer glitches. Social Security has at times imposed late penalties that turned out to be wrong, and although officials rarely admit mistakes, they do make amends. (In one case, Social Security refunded more than $14,000 to a 91-year-old widow after incorrectly deducting grossly inflated Part B premiums from her Social Security benefits for years.)

If you think you’ve been charged a late penalty in error, follow these steps:

  1. Check your facts.

    Review your situation since becoming eligible for Medicare to ensure that the mistake isn’t yours. You should be able to judge whether you let your enrollment deadline slip past and became liable for a late penalty.

  2. Reply in good time.

    The letter you receive notifying you of the penalty comes with instructions on how to challenge the ruling. It also encloses a form you can use to request a reconsideration — an independent review of the decision. Normally, you have 60 days to complete the form and return it to the address provided.

  3. Collect your evidence.

    Get together any documents that support your case. These items may include records showing that you had acceptable employer insurance for all or part of the time frame in question, documents indicating (for Part D purposes) when you were outside the country or in prison, immigration records, and so on.

    If you’ve lost documents showing that you had employer coverage, try to get letters from the employer or the health plan itself confirming that you had such coverage and providing dates. Make copies of these documents to submit in evidence — don’t send originals.

  4. Get help if you need it.

    Your State Health Insurance Assistance Program (SHIP) provides free, personal help from trained counselors on all Medicare issues, including late penalties. For contact information, go to Appendix A.

You need to continue paying the penalties on top of the premiums while the case is being investigated. If the decision goes against you, the penalty will stand. But if it goes in your favor, the penalty will be removed and the excess charges you’ve already paid will be refunded to you. If the penalty is reduced rather than waived, you’ll be refunded the amounts you’ve overpaid.

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