How Can I Delay Medicare Prescription Drug Coverage without Paying a Penalty?
If you’re new to Medicare, you might hear a lot about Medicare Part D penalties If you don’t sign up for prescription drug coverage when you first become eligible for Medicare, you might have to pay a late enrollment penalty, right?
But not all people need Medicare Part D prescription drug coverage when they first become eligible for Medicare. In some cases, you might not have to pay a penalty if you decide to wait to sign up for a Part D plan right away after all.
Creditable coverage = No penalty.
The easiest way to avoid paying a late enrollment penalty is to join a Medicare prescription drug plan when you’re first eligible. (For most people on Medicare, that’s when they turn 65.) But what if you already have a prescription drug plan and don’t want to drop it? Or what if you want to look at options other than Medicare drug plans? In either case, you should get to know the term “creditable prescription drug coverage.”
Creditable prescription drug coverage is prescription drug coverage that Medicare considers as good as a Medicare-approved Part D plan. This means it will pay, on average, at least as much as Medicare’s standard prescription drug coverage. Creditable prescription drug coverage can include coverage you might have from an employer, union or other source. If you have this kind of coverage when you become eligible for Medicare, you can generally keep that coverage without paying a penalty if you decide to enroll in a Medicare prescription drug plan later.
Make sure to check with a benefits administrator who works with your current prescription drug plan. He or she should be able to tell you whether or not the plan coverage is considered creditable prescription drug coverage by Medicare.
No penalty? Know your coverage/dates.
So now you know you may not have to sign up for prescription drug coverage when you’re first eligible for Medicare, if you have creditable prescription drug coverage. Remember: If you don’t sign up for Medicare, if you go 63 days or more in a row without creditable prescription drug coverage you may owe a late enrollment penalty. The cost of your penalty depends on how long you went without creditable prescription drug coverage.
When you first join a Medicare drug plan, the plan may send you a letter asking if you have creditable prescription drug coverage—or if you’ve gone longer than 63 days without it. Complete the form and return it by the deadline in the letter. If you don’t tell your Medicare plan about your creditable prescription drug coverage when you join, you may have to pay a penalty.
Please note: Your plan must tell you each year if your prescription drug coverage is creditable coverage. They may send you this information in a letter or include it in a newsletter from the plan. Keep this information, because you may need it if you join a Medicare drug plan later.
What happens if you lose your creditable prescription drug coverage?
In certain limited circumstances, you may be able to join, drop or switch to another Medicare drug plan at times other than during the Open Enrollment Period. For example, you may be able to switch at other times if you permanently move out of your drug plan’s service area or lose creditable prescription drug coverage.
For more information, contact the Medicare helpline 24 hours a day, seven days a week at 1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048. If you have questions about Medicare Made Clear call 1-877-619-5582, TTY 711, 8 a.m. - 8 p.m. local time, seven days a week.
Medicare Prescription Drug Coverage – Part D – MedicareMadeClear.com
Your Guide to Medicare Prescription Drug Coverage – Medicare.gov
Medicare & You – Medicare.gov
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