Pharmacy Blog
Do you have reliable coverage for prescription drugs? It is anticipated that the medication coverage will pay at least as much as Medicare’s regular prescription drug coverage on average. It might be prescription drug coverage from the Department of Veterans Affairs, TRICARE, your past or present employment, or your union.
Even if you don’t use many prescription medications, you might want to enroll in a Medicare drug plan right away if you don’t have creditable coverage in order to avoid the Part D late enrollment penalty. This penalty is not applicable to those who receive Extra Help to cover the cost of their prescription drugs or who have and maintain creditable prescription drug coverage.
How can I tell if the coverage I have for prescription drugs is "creditable"?
If your prescription coverage qualifies as creditable coverage, your drug plan is required to notify you annually. They might send you a letter with this information or mention it in a newsletter or other communication. Save this information in case you need it to avoid paying the Part D late enrollment penalty if you decide to enroll in a Medicare prescription plan later. If you enroll in Part D later and have creditable prescription drug coverage when you first become eligible for Medicare, you can usually keep it without having to pay the late enrollment penalty.
The length of time you were without Part D or acceptable prescription drug coverage determines how much the late enrollment penalty will cost you. Generally speaking, this penalty will be assessed for the duration of your Medicare prescription coverage.
What is the Part D penalty amount?
The length of time you were without Part D or acceptable prescription drug coverage determines how much the late enrollment penalty will cost you.
Medicare determines the penalty by calculating the number of complete, uncovered months you were without Part D or creditable coverage by 1% of the “national base beneficiary premium” ($32.74 in 2020, $33.06 in 2021). Your monthly Part D premium is increased by the monthly premium, which is rounded to the closest $.10.
How can I stay away from the Part D late enrollment fine?
When you are first eligible, sign up for a Medicare prescription plan.
In the event that you have never had prescription medication coverage previously, you will not be subject to a Part D late enrollment penalty.
Avoid going without Medicare prescription drug coverage or other acceptable drug coverage for more than sixty-three days in a row.
Prescription medication coverage from a current or previous union or employer, TRICARE, Indian Health Service, Department of Veterans Affairs, CHAMPVA, or health insurance coverage are examples of creditable prescription drug coverage. If your drug coverage is creditable coverage, your prescription drug plan is required to notify you annually. They might send you a letter with this information or mention it in a newsletter or other communication. Save this information in case you need it to avoid paying the Part D late enrollment penalty if you decide to enroll in a Medicare prescription plan later.
Maintain documentation of your creditable drug coverage periods and inform your plan about them.
A Medicare drug plan will verify that you have creditable drug coverage for at least 63 days in a row when you enroll in the plan. The plan will send you a letter and a form inquiring about any previous prescription coverage you may have had if it determines you didn’t. Fill out the form and send it back to your drug plan by the deadline specified in the letter to avoid a Part D penalty. You could be required to pay a Medicare Part D late enrollment penalty if you fail to disclose to the plan your creditable medication coverage.