Medicare Part D Late Penalty

When Do I Have To Pay A Late Penalty For My Medicare Part D Prescription Drug Plan?

One of the worst surprises for someone on Medicare are unexpected costs. The prescription drug benefit is voluntary, but if you don’t enroll when you first become eligible, you may have to pay a hefty late enrollment penalty if you choose to sign up at a later date.

You are charged an extra 1% of Medicare’s national average drug insurance premium for each month that you did not have prescription drug coverage as good as Medicare’s but could have.

If you have other coverage, the person who administers your benefits will tell you whether your coverage is creditable, meaning comparable to Medicare’s coverage. The 1% percentage will grow until you enroll in a drug plan.

Here is An Example: Anne turns 65 in February 2010. She has through May 2010 (three months after she turns 65) to enroll in a plan without penalty. Although she has no other drug coverage, Anne chooses not to enroll in a prescription drug plan.

In August 2010, she becomes ill and decides that getting drug coverage now would be a good idea, but she can’t enroll until the next ‘enrollment’ opportunity, which is November 15 through December 31 of 2010. Her coverage will start on January 1st 2011.

She is now seven months ‘late’ in enrolling (from June through December), and must pay an extra 7 percent in monthly premiums as long as she has Medicare prescription drug coverage.

You can see that it really is a good idea to get your Medicare Part D Prescription drug plan at the same time when you first enroll in Medicare!