How to avoid the Medicare Part D late enrollment penalty

At ApexHealth, we want you to get the most out of Medicare. Once you enroll in Medicare Part A and/or Medicare Part B, you’re eligible to enroll in Medicare Part D. Part D helps provide prescription drug benefits — we go over the basics in a previous blog post. One thing to remember is that waiting too long to get Medicare Part D coverage may cost you a monthly late enrollment penalty on top of your monthly premium. Generally, you will have to pay this penalty for as long as you have Part D.

Why might you owe a Medicare Part D late enrollment penalty?

When you become eligible for Medicare, you’re likely going to have to choose coverage for prescription drugs. You may be able to delay Part D enrollment if you have what’s called “creditable coverage” – a prescription medication plan that meets or exceeds Medicare’s Part D standards. (We’ll touch on that more a little later!)

Just remember you may owe a late enrollment penalty if at any time after your Initial Enrollment Period (IEP) is over, there’s a period of 63 or more days in a row when you don’t have Medicare drug coverage or other creditable prescription drug coverage. No one wants to pay a late enrollment penalty, especially when it can be avoided! Here’s how to avoid it.

1. Enroll in a Part D plan when you’re first eligible for Medicare  

Generally, you are first eligible to enroll in Medicare three months before you turn 65, kicking off your seven-month window to enroll known as your Initial Enrollment Period (IEP), which includes the three months before, the month of and three months after your 65th birthday. Even if you don’t take prescription drugs now, take this time to make sure you’re covered!

Just remember Original Medicare (Parts A and B) and Medigap plans do not include prescription drug coverage. This means that you can get coverage in one of two ways:

  1. A standalone Part D plan (PDP plan) – offered by private health insurance companies
  2. A Medicare Advantage plan with Part D coverage (MAPD plan) – also offered by private health insurance companies, which includes all the same coverage you get under Medicare Part A and B, and can include additional benefits such as dental, vision and hearing

You must have Medicare Parts A and/or B to join a separate Medicare drug plan or a Medicare Advantage plan.

2. Enroll in a Part D plan if you lose creditable coverage

If you already have sufficient medication coverage through another plan, you may be able to hold off. According to the Centers for Medicare and Medicaid Services (CMS), creditable coverage could include drug coverage from a current or former employer or union, TRICARE, Indian Health Service, Department of Veterans Affairs or individual health insurance coverage. You don’t need to figure this information out on your own. Your plan must tell you each year if your non-Medicare drug coverage is creditable coverage, and if you are unsure, ask your employer or union’s benefits department.

If your employer-based creditable coverage comes to an end, or you choose to drop this creditable coverage after your IEP ends, you can still avoid the late enrollment penalty. Your Special Enrollment Period (SEP) lasts for two full months after the month your creditable coverage ends. Remember, if you go 63 days or more in a row without Medicare drug coverage or other creditable prescription drug coverage, you may have to pay a penalty if you sign up for Medicare drug coverage later.

3. Keep records showing when you had creditable drug coverage

If you have employer-based creditable coverage, remember, your plan must contact you each year to report if your prescription drug coverage is creditable. This information may be sent to you in a letter or included in a newsletter from the plan. Keeping records of this information will come in handy later when you enroll in a Medicare Part D plan because it can prove you had creditable coverage in the past.

ApexHealth is a Medicare Advantage plan that’s with you every step of the way! Medicare may seem confusing, but it doesn’t have to be. If you are getting ready to turn 65 and you have any questions, we’re happy to answer them. Give us a call at (844) 279-0508 (TTY: 711). Our hours of operation are Monday through Friday 8 a.m. – 8 p.m. (local time) from Apr. 1 through Sept. 30 and seven days a week 8 a.m. – 8 p.m. (local time) from Oct. 1 through Mar. 31.


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