Medicare Part D Late Enrollment

[Mack]

If you are late enrolling in Medicare Part D you will be assessed a penalty. Seems like you are penalized your whole life for being late, and Medicare is no exception! The penalty is added to your part D premium each month.

Being "late" enrolling in part D is defined as not enrolling when you are first eligible AND you didn't have other creditable drug coverage. The eligibility period is the period which begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.

 

[Bluestar100]

If you are late enrolling in Medicare Part D you will be assessed a penalty. Seems like you are penalized your whole life for being late, and Medicare is no exception! The penalty is added to your part D premium each month.

Being "late" enrolling in part D is defined as not enrolling when you are first eligible AND you didn't have other creditable drug coverage. The eligibility period is the period which begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.

I am 74 and just learned that I need to sign up for part D. In the last 9 years, I've been to my Dr. only three times, at which time I was prescribed antibiotics, twice for bronchitis. I take no medication on a regular basis. I understand that I will be penalized due to my failure to enroll, prior to now and I don't know what the future will hold in terms of my health and need for meds but at this point, part D is like paying for something that I don't use or need. Any advice on the plan I should choose?

 

[Mack]

Hi Bluestar100

Welcome to our Medicare Forum!

Yes you will be assessed a penalty for not enrolling in Part D when you first became eligible. You say it is like paying for something you don't use or need. However it is insurance. You pay for it in case the need arrises, just like Homeowner insurance or auto insurance. And then you hope you don't have to use it. The cost is very low for Part D, especially when you sign up at age 65.

If only the people who took regular medications purchased Part D then the cost would not be shared by everyone and would be much higher. So that is why they penalize those who don't enroll when they are first eligible.

Sorry, but that's the way the plan works, it is all about sharing the risks among millions to keep the cost low for all. Of course you have the option to continue to "self insure" which is what you are doing now.

If you are late enrolling in Medicare Part D you will be assessed a penalty. Seems like you are penalized your whole life for being late, and Medicare is no exception! The penalty is added to your part D premium each month.

Being "late" enrolling in part D is defined as not enrolling when you are first eligible AND you didn't have other creditable drug coverage. The eligibility period is the period which begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.

I am 74 and just learned that I need to sign up for part D. In the last 9 years, I've been to my Dr. only three times, at which time I was prescribed antibiotics, twice for bronchitis. I take no medication on a regular basis. I understand that I will be penalized due to my failure to enroll, prior to now and I don't know what the future will hold in terms of my health and need for meds but at this point, part D is like paying for something that I don't use or need. Any advice on the plan I should choose?

 

[Owned_by_GoldenRetrievers]

For those about to enroll in Medicare Part D...

... please be advised that the "Medicare & You" handbook (2014 version) does not say anything about the penalty for late enrollment in Part D until Section 6 page 87, and the details of the penalty are not given until page 94.

In Section 1 is a flowchart that says, "Step 2: Decide if you need to add drug coverage.” For many of us who do not currently use prescription drugs or require a daily regimen of prescription drugs, the answer is “No, not yet.”

In Section 4 (“Choose Your Health & Prescription Drug Coverage”), under “How can I get my Medicare coverage?” it states you must join a Medicare PDP if you want prescription drug coverage. It does not say that if you do not select a PDP when you are first eligible for Medicare that you will have to pay a penalty.

That doesn't happen until Section 6 (“Get Information about Prescription Drug Coverage”), a section I skipped because I did not need prescription drug coverage. Finally, on Page 87, it states that you will “likely pay a late enrollment penalty if you join a plan later” than when you were first eligible for Medicare. The details of the penalty are spelled out on Page 94.

The penalty is onerous. You are penalized 1% of the national base beneficiary premium ($32/month as of this writing) from the time you enrolled in Medicare Part B, and the penalty increases each year as the national base beneficiary premium increases, and the penalty goes on forever. Moreover, if you find out about the penalty in February, you must wait until October when the next open enrollment period begins. In the meantime, each month between February and October counts as another month you failed to enroll, so an extra 8% of $32 is added to your premium when/if you enroll in October.

On the other hand, the penalty for late enrollment in Medicare Part A and Part B, as stated in the "Medicare & You" handbook, is 10% for twice the number of years you could have had those parts, but failed to sign up. After that period of time the penalty ends.

Like others in this thread, I failed to understand that there would be a penalty and what the penalty would be. It has been 12 months since I signed up for Medicare Part B, so the penalty is 12%; but it will be another 8 months before the next enrollment period begins, so the penalty clock is still ticking to the tune of an additional 8%. My penalty starting out will be 20%, or $6.40/month, or $76.80/year.

Given that the penalty is never ending and ever increasing, I have indeed elected to become self-insured. The cheapest Part D plan in my area is $12.80/month or $153.60/year. With the penalty, the total premium is $19.20/month or $230.40/year. Chances are, based on what I've read in this forum and others, the drug I will need may not be included in the plan's formulary anyway. As a Costco member, I signed up for the Costco Prescription Drug Discount program which normally saves 15% per prescription regardless of any formulary.

I'll start drawing Social Security soon when I reach full retirement age and will transfer $20/month into a special personal account reserved for paying for prescription drugs. If I'm going to have to pay someone a penalty, I'd rather that someone be me.

In the meantime, I've e-mailed Marilyn Tavenner, administrator, Centers for Medicare and Medicaid Services, with suggestions on how to improve the "Medicare & You" handbook so others better understand the penalty situation for late enrollment in Part D.

 

[Mack]

If the Medicare & You handbook hides the penalty until the "back pages" then I totally agree with you that it should be made more plain about the penalty.

I have never read the "Medicare & You" handbook, I learned about Medicare totally online and signed up online, and it seemed pretty clear to me at Medicare.gov that there would be a penalty for not signing up with Part D when I first became Medicare eligible.

Good luck to you Owned by GoldenRetrievers with your self insurance plan! Let's hope you never develop a condition where you need an ultra expensive drug where the 15% off from Costco won't help that much.

I do not take any drugs either but I signed up anyway due to the future penalty. My wife does take several moderately expensive drugs on a regular basis and the insurance is a huge help. To me Part D is better than the drug insurance coverage I had prior to getting Medicare age. I also like that I can change Part D insurers each year without penalty and it is easy to do online. I have switched twice and the wife twice also. I switched for a lower premium and she switched because her total overall drug cost for the year (cost of drugs plus cost of insurance) would be lower.

The thing about having insurance is not just that they will cover most of the cost of the drugs it is that they have negotiated huge discounts from the drug companies. For example a drug might run $200 per month, but the insurance companies have negotiated it down to $80 for people who use their plan. So someone without insurance will pay $200 for the drug but the insurance company only pays $80 due to their contract. It doesn't seem fair that someone without insurance would have to pay much more for the drug than the insurance companies pay, but that's the way it is.