Medicare Part D late penalty comes when you don’t enroll when first eligible and choose to do so later. The late enrollment penalty for Part D is a monthly fee. It goes into effect once you have been without drug coverage for 63 consecutive days. In this blog post, we will discuss Part D late penalty after 65, and how it may affect you.
How Do People Fall Into The Part D Penalty with Group Insurance?
The most common Part D late penalty is by having group insurance through their employer. If you are 65 or older, and your employer offers health insurance, you are not eligible for Medicare Part A and B. Therefore, you can’t enroll in a Medicare Prescription Drug Plan until you retire, lose your job-based coverage, or your employer stops offering health insurance. If not enrolled in Part D when you’re first eligible, you may have a late fee. This fee will be for the duration of your Part D coverage.
The following are some common questions we get regarding the Part D late penalty:
How Much is the Part D Late Penalty?
The penalty for Part D is a percentage of the “NBBP” (the monthly premium that all beneficiaries pay). A late enrollment penalty is calculated using the late enrollment multiplier. The multiplier is added to the national base beneficiary premium and your plan’s premiums if any. The late enrollment penalty can change each year.
How Do I Avoid the Part D Late Penalty?
To avoid the Part D late penalty is to enroll in a Medicare Prescription Drug Plan when you’re first eligible. You’re first eligible for Medicare at age 65, even if you’re not receiving Social Security benefits. If you’re already receiving benefits from Social Security, Railroad Retirement Board, or Office of Personnel Management, you’re automatically enrolled in Part A and Part B.
You have a seven-month initial enrollment period to sign up for Medicare Part D coverage. This period starts three months before and ends three months after the month you turn 65.
You can avoid the Part D late penalty by enrolling in a Medicare PDP during your (IEP) initial enrollment period, or during a (SEP) special enrollment period. A SEP is a time outside of the IEP when you can sign up for Part D coverage.
Why Do So Many People Who Sign Up After 65 get the Penalty?
The main reason people who sign up for Medicare Part D after 65 get the late enrollment penalty is that they had group insurance through an employer. If you’re covered by a group health plan, you’re not eligible for Medicare Part A and B, and you can’t enroll in a Medicare Prescription Drug Plan until you retire, lose your job-based coverage, or your employer stops offering health insurance.
If you’re in this situation, you can avoid the late enrollment penalty by enrolling in a Medicare Prescription Drug Plan during your initial enrollment period, or during a special enrollment period.
Will Medicare Waive a Penalty?
Yes, in some cases your Part D late enrollment penalty may be waived. If you can prove that you had “creditable coverage” (a drug plan with coverage at least as good as Medicare’s) for a continuous period of 63 days or more before enrolling in Medicare, you won’t have to pay the late enrollment penalty.
Creditable coverage includes health insurance from an employer or union, COBRA continuation coverage, certain retiree health plans, and other types of health coverage.
Will Qualifying for Extra Help Wave Part D Penalty?
The good news is if you qualify for extra help through the state. Any penalties that you have will go away. For as long as you qualify for the program.
Understanding how certain programs work and when to apply for them is where we can help. Give one of our experts a call and we discuss based on your monthly income what you qualify for. We look forward to speaking with you.
