If you do not have drug coverage after you turn 65, you will start accruing a penalty…even if you aren’t taking any prescription drugs!
‼️If you have drug coverage through the VA, an employer, or union plan after you turned 65 that meets the Medicare minimums for drug coverage (ie. what they call creditable coverage) you can stop reading. You will not receive a penalty.
How do you know if your coverage is creditable? Your current plan should send you a notice every September.
For everyone else, keep reading…
Over the past 10 years, our family agency has seen many cases where people try to do this “Medicare thing” on their own. However, the rules and regulations regarding Medicare are very complex. You wouldn’t represent yourself in court without a lawyer, why attempt to learn the ins and outs of Medicare in a couple of weeks, when you could receive professional advice for no additional cost? 🤔
Last year, we met a lovely lady – let’s call her Jane. Jane was 78 at the time and currently not taking any medications. She was however been charged a monthly “Part D” penalty for the past 3 years. Huh? What? You may ask. Why is she paying more for being healthy?
Jane’s Story
When Jane turned 65 in 2006, her husband – a savvy businessman in his own right – took care of enrolling them both in a Medicare Plan. What he did not know, is that if even though Jane wasn’t taking any prescriptions, she would start accruing a “Part D Late Enrollment” Penalty for every year she did not have prescription drug coverage. The “Part D Late Enrollment” penalty takes effect as soon as as a person goes to enroll in a Medicare Plan with drug coverage.
This is exactly what happened to Jane 3 years ago when another agent enrolled her in a drug plan. Jane now finds herself paying extra money every month for something she genuinely did not know about. She tried to appeal this penalty, but her request was denied. What’s, even more, is that the “Part D Late Enrollment” Penalty is a lifetime penalty.
How much is this penalty you ask?
It is 1% of the national average cost of part D drug plans. In plain English, this is approximately 32 cents per month for each month a person didn’t have drug coverage. This doesn’t sound like much, but if you wait many years…this can add up!
For instance, if someone waits 11 years before they get drug coverage (like in Jane’s case), this adds up to approximately $31.50 per month in penalty. This is $378 per year that Jane wouldn’t have otherwise have to pay if she and her husband were advised of the correct information when Jane turned 65. It’s been 3 years now, and Jane has spent nearly $1,134 unnecessarily.
This is one of many reasons why we do what we do – we are here to help and protect our clients and community. We offer no-cost annual reviews to the community.
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BOTTOM LINE: Make sure you have some form of drug coverage after you turn 65 – no matter if you are taking prescription medications currently or not.
Note: It is possible to appeal the Part D Drug Penalty. We have seen it go either way for folks. Sometimes the appeal is approved, but often it is not.