Posts Tagged ‘medicare part d’

What’s the Medicare Part D late enrollment penalty?

Monday, January 20th, 2014

The late enrollment penalty is an amount added to your Medicare Part D premium. You may owe a late enrollment penalty if, at any time after your initial enrollment period is over, there’s a period of 63 or more days in a row when you don’t have Part D or other Prescription drug coverage (for example, from an employer or union) expected to pay, on average, at least as much as standard prescription drug coverage. People who have this kind of coverage when they become eligible for Medicare can generally keep that coverage without paying a penalty, if they decide to enroll in Medicare prescription drug coverage later.
How much is the Part D penalty?
The cost of the late enrollment penalty depends on how long you went without creditable prescription drug coverage.

The late enrollment penalty is calculated by multiplying 1% of the “national base beneficiary premium” ($32.42 in 2014) times the number of full, uncovered months you were eligible but didn’t join a Medicare Prescription Drug Plan and went without other creditable prescription drug coverage. The final amount is rounded to the nearest $.10 and added to your monthly premium.

The national base beneficiary premium may increase each year, so the penalty amount may also increase each year.

Your plan will tell you if you owe a penalty

After you join a Medicare drug plan, the plan will tell you if you owe a penalty, and what your premium will be. You may have to pay this penalty for as long as you have a Medicare drug plan.

3 ways to avoid the late enrollment penalty

1. Join a Medicare Prescription Drug Plan when you’re first eligible.

You won’t have to pay a penalty, even if you’ve never had prescription drug coverage before.

2. Don’t go 63 days or more in a row without a Medicare drug plan or other creditable coverage.

Prescription drug coverage (for example, from an employer or union) thatexpected to pay, on average, at least as much as Medicares standard prescription drug coverage. People who have this kind of coverage when they become eligible for Medicare can generally keep that coverage without paying a penalty, if they decide to enroll in Medicare prescription drug coverage later. Creditable prescription drug coverage could include drug coverage from a current or former employer or unionTRICAREIndian Health Service, the Department of Veterans Affairs, or health insurance coverage. Your plan must tell you each year if your drug coverage is creditable coverage. They may send you this information in a letter, or draw your attention to it in a newsletter or other piece of correspondence. Keep this information because you may need it if you join a Medicare drug plan later.

3. Tell your plan about any drug coverage you had if they ask about it.

When you join a Medicare drug plan, the plan will send you a letter if it believes you went 63 or more days in a row without other creditable prescription drug coverage. The letter will include a form asking about any drug coverage you had. Complete the form and return it to your drug plan by the deadline in the letter. If you don’t tell the plan about your creditable drug coverage, you may have to pay a penalty.

 

Source:  http://www.medicare.gov/
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