Medicare Part D: Understanding the Late Enrollment Penalty
If you’re enrolled in Medicare Part A and Part B, you’re eligible for Medicare Part D prescription drug coverage. However, if you don’t sign up for Part D when you’re first eligible, you’ll face a late enrollment penalty.
What is the Late Enrollment Penalty?
The late enrollment penalty is a monthly surcharge that’s added to your Part D premium. The penalty is based on the number of months you didn’t have creditable prescription drug coverage since you became eligible for Medicare.
The current penalty is 1% of the national average monthly premium for Part D coverage, which is $35. So, if you go without Part D coverage for 5 years, your penalty would be $21 per month for the rest of your life.
How to Avoid the Late Enrollment Penalty
The best way to avoid the late enrollment penalty is to sign up for Part D when you’re first eligible. You can do this during your Initial Enrollment Period (IEP), which begins 3 months before the month you turn 65 and ends 3 months after the month you turn 65.
If you miss your IEP, you can still sign up for Part D during the General Enrollment Period (GEP), which runs from January 1 to March 31 each year. However, you’ll have to pay the late enrollment penalty if you sign up during the GEP.
Exceptions to the Late Enrollment Penalty
There are a few exceptions to the late enrollment penalty. You won’t have to pay the penalty if you:
Have creditable prescription drug coverage from another source, such as an employer-sponsored plan or Medicaid.
Live in a nursing home or other institution that provides prescription drug coverage.
Have a low income and qualify for Extra Help with Medicare prescription drug costs.
How to Get Help
If you need help understanding the late enrollment penalty or signing up for Part D, you can contact the Social Security Administration at 1-800-772-1213. You can also get help from a licensed insurance agent.
Note: This blog post is not intended to be a substitute for professional advice. If you have questions about your Medicare coverage, please speak with a licensed insurance agent or contact the Social Security Administration.
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