How to avoid the Medicare Part D Penalty

Hello Toni:

I read your article about how ignoring Medicare rules is costing Americans millions and I believe I have made a mistake because I have not enrolled in a Medicare Part D prescription drug plan. I need your help!

I retired in August and had a telemarketing agent help me find a Medicare Supplement which began Sept. 1. No one told me that I had a specific amount of time to enroll in my Medicare Part D plan. Currently, my prescriptions are generic, and I use GoodRx to receive the discount.

When I enrolled on December 15 for a new Medicare Part D plan, I was denied because I did not apply on time.

I am 70 and my Part D will begin next year when I’m 71. Medicare informed me that the Part D penalty will be $0.3470 X 72 months since my Medicare Part A began 6 years ago at 65. I cannot believe that I must pay an extra $25 per month as a Part D “penalty.”

Please explain this ridiculous Medicare Part D rule and when I can begin my plan. Thank you.

--Samuel from Chattanooga, Tenn.

Samuel:

Because you missed the 2024 Medicare Annual Enrollment Period (AEP), you will have to wait until the next AEP, from Oct.15 to Dec. 7, to enroll in a Medicare Part D plan. Your effective date will be Jan. 1, 2025.

The good news is that you are currently taking generics and can use GoodRx (which is not what Medicare deems as a “creditable” prescription drug plan) until you enroll in Medicare Part D during that time. (Chapter 5 of the Toni Says Medicare Survival Guide Advanced edition, explains Medicare Part D, how to avoid Part D penalties, and the famous “Donut Hole.”)

Once you are past 65 and leaving creditable employer’s group coverage with a prescription drug plan, Medicare gives you only 63 days, not 90 days, not 8 months, but less than 63 days to enroll in Medicare Part D or a Medicare Advantage plan with prescription drug coverage.

Your Late Enrollment Period (LEP) did not begin from the day you left your company health plan, nor from your Medicare Part B start date. It began from the month your Medicare Part A began.

The LEP for Medicare Part D can be charged to you because:

1. You waited past 63 days without creditable prescription drug coverage upon leaving company benefits and you are older than 65 years and 90 days. Readers: Do not wait past 63 days to get Medicare Part D upon leaving company health insurance! (Samuel, this is your situation.)

2. Your company prescription drug benefits (not health insurance) were not “creditable” as Medicare declares.

3. You never enrolled in Medicare Part D at the time you enrolled in Medicare Part A and Part B when you turned 65, and now want to enroll.

Samuel, you were denied Medicare Part D prescription coverage because you met Medicare’s LEP and will receive the Part D penalty when you enroll during Medicare’s Annual Enrollment period -- a penalty which lasts a lifetime.

Americans retiring after 65 who are leaving their employer’s health plans and applying for Medicare Parts A and B must also prove they have “creditable coverage” when applying for a Medicare Part D prescription drug plan. This is a Medicare rule. Don’t delay your Part D enrollment.

- - -

Toni King is an author and columnist on Medicare and health insurance issues. She has spent nearly 30 years as a top sales leader in the field. If you have a Medicare question, email info@tonisays.com or call 832-519-8664. Toni’s books and her newsletter are available at www.tonisays.com. Toni’s new Confused about Medicare video series is now available for purchase at www.tonisays.com, as are Toni’s Medicare Survival Guide and discounted bundle package.