In 1966 Medicare was enacted and the system had been designed to be self sustaining. Like any insurance policy it relied on a large number of people to participate in order to be viable . As long as someone worked and paid into the system for a minimum of 10 years their part “A”, hospitalization was paid and they would have hospital medical insurance.
The part “B”, out patent care was designed to have a monthly premium and is an 80/20 type of insurance where you pay 20% after a deductible. It was assumed that everyone would go on social security at age 65 and at the time it was a pretty good assumption. To insure that everyone would sign up for medicare and pay the monthly premium the system was set up so that when you reached age 65 and were drawing social security you were automatically enrolled. Provision were made for those who had other such as VA or coverage through a pension plan or group insurance to opt out. Unless you had one of these they expected you to start paying the monthly part “B” premium. In order to prevent people from opting out just to save the monthly premium they set up a penalty system that would impose a 10% per year penalty if you decided to wait to get coverage and the penalty is permanent, that is it stays with you for life.
Now fast forward to 2012, people are working past age 65 and taking their social security later, as a matter of fact they are being encouraged by the government to take it later and as a result a large and growing number of folks are missing there opportunity to sign up for there Medicare when they are supposed to. Because of the baby boomers coming to age 65 there are10,000 every day turning 65. A very large number of these folks do not have medical insurance or will loose there insurance if they are self insured since most private health insurance stops at age 65. These folks don't know that they need to sign up for medicare. There window to sign up is fairly narrow. You have the 3 months prior to the month of your 65 birthday, the month of and 3 months after. If you miss this window you must wait until Jan, Feb or March of the following year and it will not take effect until July of that year. You will also pay a 10% per year penalty for the rest of your life.
Please if you are turning 65 or know someone who is turning 65 let them know. It is easy to do, just go to SSA.gov and sign up.