Lee Kilburn is a 77-year-old pediatrician who's in pretty good financial health. He decided to forgo Social Security and save the government, whose finances aren t the best, some money.

I was working full time and I didn't have any illnesses so I just thought I would wait and help out the government. That turned out to be an error! explained Kilburn.

Lee should have signed up for Medicare at 65 but waited until he was 70 after his kids suggested it. When he got his bill it included a penalty and he didn't know why.

I called them and they said they didn't know anything either, about the penalty and why it increased. They cited some governmental act and they said we just send the money onto the government. I said, well I've called the government before and I've never gotten an explanation, said Kilburn.

So the good doc called me. Turns out, Uncle Sam is charging him a late enrollment penalty for his Medicare coverage.

This is really kind of insulting. It's like getting slapped every month like I'm bad boy and what reason could they possibly have for increasing it from $10 to $45 which is like a 350% increase, questioned Kilburn.

The penalty will last the rest of his life. It went up 35 bucks this year and could go up again. There's no getting out of probation, ever.

Kirk Larson of the Social Security Administration said the penalty is how the government tries to encourage people to get coverage if they ve not signed up by age 65.

For every 12 month continuous period that you don't have insurance you will pay a 10% penalty on top of the monthly premium for the rest of your life, said Larson.

Because it's a percentage of your premium the penalty grows.

Most times you get a penalty and you pay it. You know, like I'm late on my taxes and they say, we're slapping on another $300. This is like a penalty that's for life and adjustable for life and increased for life for a reason I can't understand, said Kilburn.

Bottom line - Social Security says it's trying to get people to sign up before there's an urgent need. So weigh your options and understand no good deed will ever go unpunished.

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