Within the alphabet soup that is Medicare, there are important deadlines of which to be aware. If you are late to enroll you may be forced to pay a Medicare Part D penalty.
Medicare Part D is the prescription drug benefit of Medicare. Like all of Medicare, there are specific and limited times that you can enroll in the program. It is important to understand these enrollment periods, so you can avoid late enrollment penalties.
When can you enroll in Medicare Part D?
The Initial Enrollment Periods for Medicare include:
- You’re newly eligible for Medicare because you turn 65. You get a 7-month period to pick your plans, which starts 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.
- You’re newly eligible for Medicare because you’re disabled and under 65.
- You’re already eligible for Medicare because of a disability, and you turn 65.
- You HAVE Medicare Part A coverage, and you get Medicare Part B for the first time by enrolling during the Part B General Enrollment Period (January 1–March 31).
You may owe a late enrollment penalty if at any time after your Initial Enrollment Period is over, there’s a period of 63 or more days in a row when you don’t have Part D or other creditable prescription drug coverage. Creditable prescription drug coverage is coverage (for example, from an employer or union) that’s expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage.
The late enrollment penalty is an amount that’s added to your Part D premium each month. If you have a penalty, you may have to pay it each month for as long as you have Medicare drug coverage! The Part D late enrollment penalty is calculated as 1% of the national base beneficiary premium for each full, uncovered month that you didn’t have Part D or creditable coverage.
For example, if there was a period of 14 months that you did not have Part D or creditable prescription drug coverage, this is how the penalty is calculated:
14 months x 1% = .14
.14 x $35.63 (2017 base beneficiary premium) = $4.98
$4.98 rounded to the nearest $.10 = $5
$5.00 would be added to your monthly Part D premium for as long as you have Medicare Part D (which is usually for the rest of your life). So each year you would be paying an additional $60 in Part D penalties. Over 20 years that would be $1,200 in completely avoidable penalties.
For more information on the Part D Late Enrollment Penalty, visit www.medicare.gov/Pubs/pdf/11219-Understanding-Medicare-Part-C-D.pdf or https://www.cms.gov/Outreach-and-Education/Outreach/Partnerships/downloads/11222-P.pdf