You are turning 65. But– like 40 percent of other 65-year-olds– you have not yet claimed your Social Security benefits. For many older adults, that choice makes good financial sense. Except for one problem: You may find yourself getting hit with big penalties for failing to enroll in Medicare.  Why? Because you probably didn’t know you had to.

Congress could easily fix this. But for some reason, it hasn’t. And it helps explain why in 2018, about 760,000 seniors, or 1.4 percent of older adults, were needlessly paying penalties for waiting too long to sign up for Medicare Part B. Most didn’t enroll on time because the government never told them they had to, or how to do it. Those who claim Social Security benefits get notice. Those who don’t, don’t.

This week, a House committee held a hearing on a way to fix the problem. A bipartisan bill called the Beneficiary Enrollment Notification and Eligibility Simplification (BENES) Act would go a long way in that direction. Except it has been awaiting congressional action for years.

There are several layers to the problem. Here is a nice explanation from Fred Riccardi, president of the Medicare Rights Center.

To start, Congress years ago decoupled the eligibility age for Medicare (generally 65) from the full benefit age for Social Security— now 66 and scheduled to rise to 67 for those born in 1960 or later. Besides, Americans are working and living longer, and thus many are deferring their Social Security benefits.

Back in the day

Back in the day, it all worked relatively seamlessly. You claimed Social Security benefits as you approached your 65th birthday and got a notice from the government that it was time to enroll in Medicare. You signed up, your Part B premiums were deducted from your Social Security benefits, and life went on.

Now, the world of retirement has changed. But the enrollment system for Medicare still presumes that people sign up for Medicare and Social Security at the same time, even though 4 in 10 no longer do.

Unless you are paying close attention, you probably don’t know that if you fail to enroll in Part B (as well as Part D drug benefits) at age 65, you must pay a penalty of 10 percent for each year you defer. Wait two years, and you owe a 20 percent premium penalty, and so on. (You should enroll in Medicare Part A at age 65 as well, but there is no premium penalty for failing to do so since you pay no premiums for this hospital insurance).

Coverage gaps

Here’s another problem: If you miss your initial sign-up period, you have to wait until the next open enrollment window. And that can leave you with no insurance for months.

Then, there are all the complexities that come with combining insurance.

Generally, if you still are working and getting health insurance through your employer, you can defer Part B enrollment without paying that penalty. But, if you have COBRA or retiree health coverage from your work, it may be designed as secondary payer to Medicare. And if you don’t have Medicare, you effectively may have no insurance coverage at all.

The point is, it is all very complicated. If you are getting Social Security, you get a notice and a Welcome to Medicare handbook explaining it all, and reminding you about what you need to do. If you are not claiming Social Security benefits you get…silence.

This is not a new problem and lawmakers have known about it for years. I wrote about it in 2015. And again in 2017. And Congress has yet to enact an easy fix. So, here we go again.

Telling people their rights

The BENES Act would require the federal government to notify people about their Medicare rights and responsibilities starting at age 60, as part of their annual Social Security statement.

It also would eliminate coverage gaps as people transition from commercial insurance to Medicare, and at least begin the process of coordinating enrollment periods for Part B, Part D, and Part C Medicare Advantage managed care plans.

As the age of full Social Security benefit eligibility continues to get delayed and more older adults keep working, it increasingly will be important to better tie Medicare enrollment with turning 65, rather than linking it to claiming Social Security benefits.

Enrolling in Medicare still will be far too complicated. But by passing BENES, Congress could address some easily-fixable, and completely unnecessary challenges. What are lawmakers waiting for?