Many people question the need to enroll in a Part D plan, especially if they aren’t taking any prescriptions. Plus, sometimes you can fill your prescriptions at lower costs using discount drug problems. No matter if you have any prescriptions or not, you must enroll in a Part D plan as soon as you enroll in Medicare. The reason? To avoid penalties and other negative consequences later.
The late-enrollment penalty should be enough reason to enroll in Part D. Let’s take a closer look at how the penalty works.
You are penalized for not having Part D if you went without it (or other creditable coverage) for 63 days or longer. This doesn’t necessarily mean 63 days after your 65th birthday because it is possible to delay your Medicare enrollment without penalty. If you choose to do so, make sure the coverage you have in place is creditable for Medicare. As soon as that coverage lapses, you need to enroll in Part D within 63 days. Of course, you should try never to have a lapse in coverage at all.
The Part D penalty is calculated using the national base beneficiary amount and the number of full months you went without coverage. Since the national base beneficiary amount changes each year, so can your penalty amount. Here is an example using the base amount of $32.74 in 2023.
1% x $32.74 x 36 months = $11.79
The penalty is then rounded to the nearest $0.10, so in this case, the penalty would be $11.80. You will pay $11.80 per month on top of your Part D penalty when you finally enroll. (You won’t pay a penalty if you never enroll in prescription drug coverage.) You will also pay this penalty if you are enrolled in a Medicare Advantage plan that includes prescription drug coverage, also known as an MAPD plan.
The worst part about the Part D penalty is that it stays with you for life or as long as you’re enrolled in Part D or an MAPD. And since the national base beneficiary amount usually increases every year, you’ll pay a higher penalty as time goes on.
Another reason you should enroll in Medicare Part D - even if you’re not taking prescriptions - is that you can’t choose to enroll at any time. You can enroll in Part D during your Initial Enrollment Period (around your 65th birthday), when you lose other creditable coverage, or if you have a specific life-altering event that qualifies you for a Special Enrollment Period. If you didn’t enroll during your IEP and didn’t qualify for an SEP, you cannot enroll in a Part D or MAPD plan until the Annual Election Period, which runs from October 15 through December 7 every year. If you enroll during AEP, your coverage will not begin until January 1 of the upcoming year.
That might not sound like a bad thing until you think about the unknown. What happens if you have a heart attack in April? Get cancer in July? Those conditions - and a slew of others - are going to cause you to go on some very expensive prescriptions. Unfortunately, you won’t be able to get prescription coverage until January. That is not a situation you want to find yourself in.
If you have questions about enrolling in Medicare Part D or need help understanding your current plan, chat with one of the agents at Local Medicare Specialists!
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