The Medicare Part D late enrollment penalty is a one-time tax imposed on your monthly prescription drug premium if you go more than 63 days without having creditable prescription drug coverage. This penalty applies to all Medicare beneficiaries who did not participate in a Medicare Part D plan during their first enrollment period, or who did not have creditable prescription drug coverage while Medicare eligible, whether through an employer or elsewhere. The penalty is indefinite and will apply for the duration of your enrollment in a Medicare prescription medication plan.
The penalty amount you pay is determined by a number of criteria, including the length of time you went without creditable prescription drug coverage and the national base benefit premium at the time of enrollment. Here's how Medicare calculates the Part D penalty for someone who went 48 months without creditable prescription drug coverage.
The penalty is then rounded to the nearest $0.10, resulting in a monthly penalty of $15.90 in addition to the monthly premium for this individual. Just for the penalty, that's an extra $190 every year. As you can see, the Part D penalty is really inconvenient! Fortunately, there are ways to avoid it, which we'll explain in the next section.
.48 (48% Penalty) x 33.06 (2021 Base Premium) = $15.86/ month
When you initially become eligible for Medicare, enroll in drug coverage.
During your Initial, you will have the first opportunity to enroll in Medicare prescription coverage (IEP). This is a seven-month enrollment period that begins three months before and concludes three months after your 65th birthday. A Special Enrollment Period may be available to those who are still working while Medicare-eligible or who have unique special circumstances.
If you require financial support, enroll in the Extra Help Program.
Medicare Extra Help is a federal program that assists people with limited income and resources with their prescription drug costs under Medicare. There is no late enrollment penalty for those enrolled in the Extra Help program.
If you lose other creditable coverage, enroll in Medicare medication coverage.
All Medicare recipients must have creditable prescription drug coverage. This means that your current prescription drug coverage must match or exceed the benefits offered by a Medicare prescription drug plan. The majority of people receive adequate coverage through their employer's group health plan. If you retire or quit your employment, you must enroll in drug coverage within 63 days of the termination of your previous coverage to avoid paying a penalty.
Even if you don't take prescription medications, enroll in a low-cost drug plan.
New beneficiaries frequently make the mistake of not enrolling in a prescription drug plan when they first become eligible because they do not believe they require it. What they don't account for, however, is the permanent late enrollment penalty as well as coverage gaps in the event of a future health crisis. Rather than risk being exposed and facing a significant penalty in the future, enroll in a low-cost Part D plan. This will protect you from future late enrollment penalties and give you peace of mind if you ever require prescription coverage.
Medicare is covered only by home health care services prescribed by a physician and delivered by qualified nurses, although patients must meet strict eligibility criteria.
What is the easiest way to apply for Medicare? Well, you are in the right place! Most people were automatically enrolled and became eligible for Social Security when they turn to 65. We didn't need to apply for Medicare until President Reagan signed the legislation which raises the retirement age in 1983 and begins in 2003.
While eye care is a common need as we age, Medicare coverage is extremely restricted for most vision services. It is normally based on whether you encounter any medical problems that can impair your eyesight.
Many people believe that Medicare is free because, for much of their working life, you have paid into Medicare by taxes, but that assumption is not right.
Often, Medicare premiums come as a shock to new Medicare recipients. You may have noticed that the federal government has been deducting taxes for years from your paychecks. And yes, these deductions go into paying your future payments for Medicare Part A as well as your income checks from Social Security.