Your Online Resource for Medicare Insurance: Guiding you along the maze of Medicare

Part D Procrastination Equals a Penalty

If time is money, then procrastination also has a price. It now seems that even doing nothing may have a high cost when it comes to the Medicare Part D program.  

Did you know that if you do not enroll in Medicare Part B and a prescription drug plan (Medicare Part D) within six months of becoming eligible for Medicare, you will pay a penalty on that coverage for the rest of your life? These penalties are based on the length of time you did not enroll when you were eligible to do and you may have to pay a higher premium because of a late enrollment penalty.

Choosing to go without creditable drug coverage for a continuous period of 63 days or more you will receive an LEP letter, a reconsideration notice, and a reconsideration request form. The reconsideration notice provides you with an explanation of your right to ask Medicare to review (or reconsider) your late enrollment penalty. Creditable drug coverage is coverage that meets Medicare's minimum standards.

If you receive a late enrollment penalty

  • The amount will be billed or deducted with your drug plan premium.
  • You will be charged a penalty for as long as you continue to have Medicare prescription drug coverage.
  • It will change on an annual basis.

However, if you are retired and have comparable drug coverage through your former employer—referred to as “creditable” coverage in Medicare's lingo—you won't have to pay a penalty if you opt out of Part D now and then decide to take the coverage later.  Keep in mind that there are deadlines for enrollment after your employer coverage ends that you would have to meet.

Every year, your former employer is supposed to send you a letter that tells you whether your drug coverage is creditable.

Hold on to those letters!

You may need them to prove that you had such coverage if you decide to apply for Part D at a later date. Also, is the letter from your former employer current? It's a good idea to touch base with whoever handles your employer plan to make sure the drug coverage will remain “creditable” when you turn 65 in January. And if you don't get a letter next year, find out why.

Related Articles on Medicare Penalty