Medicare Part D Penalty

What is Medicare Part D Penalty?

This penalty is an additional amount that may be added to your monthly Part D premium. You may owe a late enrollment penalty if you go without Medicare Part D or other creditable drug coverage for any continuous period of 63 days or more in a row after the end of your Initial Enrollment Period for Part D coverage. Generally, your monthly Part D premium includes the late enrollment penalty as long as you have Medicare prescription drug coverage. The late enrollment penalty amount changes each year. The cost of the penalty depends on how long you went without Part D or other creditable drug coverage.

What is creditable drug coverage?

Creditable drug coverage is coverage that is expected to pay on average at least as much as Medicare’s standard drug coverage. Most employer plans that offer prescription drug coverage must send you a yearly notice. If you do not receive a separate written notice, your plan may provide this information in its benefits handbook. For more info, you should contact your HR department.

How much does the late enrollment penalty cost?

Medicare calculates the late enrollment penalty when you first join a Medicare drug plan. The late enrollment penalty amount typically is 1% of the national base beneficiary premium for each full, uncovered month that you did not have Part D or other creditable coverage. The national base beneficiary premium for 2021 is $33.06. Medicare rounds the monthly penalty to the nearest $0.10 and adds it to your monthly Part D premium.

What if you had prior drug coverage?

When you first join a Medicare drug plan, the plan will determine if you had a potential break in creditable coverage for 63 days or more in a row. If so, the Medicare drug plan will send you a notice asking for information about prior prescription drug coverage. It is very important that you complete this form and return it by the date on the form. You can also submit any proof of your prior drug coverage including the annual creditable notice from your employer's health plan. If you do not provide this information to the plan by the due date on the form, the plan will automatically determine the late enrollment penalty amount.

What if you wait one month after you were first eligible to enroll in a Medicare drug plan?

You must be without creditable coverage 63 days or more in a row any time after you were first eligible to enroll. Since you had only one month without Part D or other creditable coverage, you won't have to pay a penalty.

What if you do not agree with Medicare Part D penalty?

If you do not agree with the late enrollment penalty, you can ask Medicare to reconsider its decision. Accordingly, your drug plan will send information about how to request a reconsideration. You should first complete the reconsideration form and return it to the address or fax number listed on the form. Also, you should submit any proof that supports your case.

Need More Help?

Skyline Benefit is an independent Medicare broker in Orange County with the expertise in Medicare penalties. We can help you with applying Medicare and finding the best Medicare option for you. If you have any questions about your Medicare Part D penalty, give us a call at (714) 888-5116. You can also book a virtual appointment.