When someone turns 65, is not working, and did not activate their Part A (hospital) or Part B (medical) coverage, Medicare allows for an election period during January 1st to March 31st to request enrollment onto these coverages by contacting Social Security (the administrative arm for Medicare). The effective date for Part A and/or Part B will be 7/1 of that year.
There will not be a penalty for late enrollment onto Part A; however, if you have not been on a prescription drug plan since turning 65 that is deemed comparable to a Medicare drug coverage, then there will be a penalty of 1% per month based on the national average which you will pay in perpetuity.
There will, however, be a penalty for late enrollment onto Part B for someone who turned 65 and was not covered by an employer plan. Your monthly premium for Part B may go up 10% for each full 12-month period that you could have had Part B, but didn’t sign up for it.
Selection of insurance coverage available to a beneficiary by having Part A and Part B must be selected with an effective date of 7/1 of that year.