It’s crucial to enroll in a Medicare Part D plan during Original Medicare or Medicare Advantage enrollment to avoid a late enrollment penalty. If you don’t take many medications or have low costs, it may seem like an unnecessary expense. However, waiting could lead to a Medicare Part D late enrollment penalty, resulting in higher monthly out-of-pocket expenses that increase over time. Don’t risk going without coverage if you become ill. This penalty leads to a permanent increase in Part D premiums and can also occur if one drops their plan and goes without coverage for too long. To avoid this penalty, enroll in Medicare Part D during initial enrollment.
When do I need To Pay the Part D Enrollment Fee?
To avoid a lifetime surcharge on Medicare Part D premiums, enroll during the initial enrollment period, which starts three months before your 65th birthday and ends three months after. You have seven months including your birthday month to enroll without penalty. After that, you must have prescription drug coverage for less than 63 days or face a penalty.
Medicare charges a penalty of 1% of the national base beneficiary premium ($32.74 in 2023) for every month without prescription drug coverage. The penalty is rounded to the nearest $0.10 and added to the monthly Part D premium. For example, if you were without coverage for all of 2022, your penalty for 2023 would be $3.90 per month because all uncovered months are calculated. The penalty continues as long as you have coverage and is recalculated annually.
What If I Have Creditable Coverage?
A creditable prescription drug plan is equivalent to Medicare Part D. If you have one, you don’t need to enroll in Part D during your initial enrollment period and avoid paying a penalty. Creditable coverage can come from an employer or labor union, or from government programs such as FEHB, Veterans Benefits, TRICARE, CHAMPVA, or Indian Health Service. You may also have creditable coverage from a spouse’s employer or from a COBRA plan.
You also won’t be penalized for late enrollment in Medicare Part D if you receive Extra Help, are outside the US, or are in prison and enroll within two months of returning/release. Furthermore, you will avoid a penalty fee if you delayed enrolling in Part A and Part B and enroll in Part D within two months of enrolling in either Part A or B. For people working for a company with 20 or more employees, they may delay enrolling in Part A and B to continue making contributions to a health savings account.
If you lose creditable prescription drug coverage through retirement, layoff, ending of spousal coverage, or ending of COBRA coverage, you have a two-month special enrollment period to sign up for Medicare Part D without penalty. The special enrollment period also applies if your employer’s coverage changes and is no longer creditable.
Can I File An Appeal To Part D Penalty?
You may file an appeal for a Part D late enrollment penalty (LEP) if you believe that the penalty was assessed in error, or if there are extenuating circumstances that caused you to delay enrolling in a Medicare Part D prescription drug plan. There are several circumstances under which an appeal may be filed, including:
- You were enrolled in a creditable prescription drug coverage plan: If you had creditable employer drug coverage, and you lost that coverage
- You were eligible for Medicare but unaware of your enrollment options: If you did not understand the rules for enrolling in Medicare Part D and did not enroll in a plan when you were first eligible
- You experienced a special enrollment period: If you experienced a special enrollment period due to a change in your circumstances (such as moving, losing employer-sponsored coverage, or becoming eligible for Medicare due to disability)
- You had a financial or personal hardship: If you were unable to enroll in a Medicare Part D plan due to financial or personal hardship
To file an appeal, you will need to submit a written request, explaining why you believe the penalty was assessed in error or why there were extenuating circumstances that prevented you from enrolling in a plan. You will also need to provide any supporting documentation, such as proof of creditable prescription drug coverage or evidence of financial hardship.
It is important to keep in mind that this is a time-sensitive process and there are strict deadlines for submitting an appeal. You will typically have 60 days from the date you receive the notice of the penalty to file an appeal.
It is also advisable to seek the assistance of a qualified Medicare expert like here at Temmen Insurance to help you navigate the appeals process and to ensure that your appeal is properly documented and presented to Medicare.
To conclude, it is best not to miss your Initial Enrollment Period because even if you don’t use any medications or a small portion of them, you can be subject to this fee if you don’t have creditable coverage.
If you have any additional questions about Medicare and are not sure which rules apply to your specific situation, you can contact Temmen Insurance. Our experienced agents will be happy to help you navigate the world of Medicare. Call us or text us today, client satisfaction is our main goal!