Medicare Part D Penalty Explained

A lot of folks have questions about the Medicare Part D penalty. Things seem to change so much, many people are confused and scared they might make a mistake. A common question we get is “how can I avoid a plan D late enrollment penalty.” This video will illustrate that a Part D penalty can be easily avoided.

There is a 7 month window when you first start Medicare that you need to be aware of. 3 months prior to starting Medicare, the month starting Medicare, and the 3 months after your Medicare start month is when you typically should enroll in a Part D plan. If you enroll during this window, you will avoid the penalty.

In some cases, for example you deferred Part B and had drug coverage through work (credible coverage) you would not get a penalty after this window of time. In general, if outside of this window, you would be susceptible to the Part D late enrollment penalty. This would cause your overall Part D cost to increase.

The Part D penalty is not the only Medicare penalty you need to be aware of, but for the sake of time, we focus only on the Part D penalty in this video. If enrolling during the 7 month window you are all set, and have no worries. You would only pay the normal Medicare Part D premium your plan charges. If you don’t enroll during the 7 month window, then eventually if or when you enroll into a Part D plan down the road, you would be assessed a Medicare Part D penalty.

Sometimes if a person doesn’t take any medications, they may decide not to enroll into a drug plan. Just keep in mind if circumstances change, and you need drug coverage, cost could add up. The late enrollment penalty is calculated using the national base premium, which is $35.02 for Medicare Part D 2018. 1% of the base average is added each month you go without Part D coverage.

If you receive a penalty for Medicare Part D prescription drug coverage, you would pay that penalty for the remainder of your life. The penalty would begin being applied once you sign up for Part D. Even if you find what you feel is the best Medicare drug plan at a low price, the penalty would still be added, which may cause your total monthly cost to be higher than normal.

More information can be found about the Medicare Part D Penalty by visiting Medicare.