Unintended Part D “Gotcha” Could “Getcha” If You Enroll after Age 65Posted by Medicare Made Clear
Meet Mike. He’s enrolling in Medicare after retiring at age 68.
Mike sensibly signed up for just premium-free Medicare Part A (hospital insurance) when he first became eligible at age 65. He didn’t need full Medicare coverage yet – or the costs that come with it – because he was still working and had employer health coverage.
Mike’s plan benefits manager at work confirmed that Mike would qualify for a Medicare Special Enrollment Period when he retired and his employer coverage ended. He could make additional Medicare coverage decisions then.
Fast forward 3 years to Mike’s retirement at age 68 and the start of his 8-month Special Enrollment Period. Mike has to complete his Medicare enrollment during this time or else he could face late enrollment penalties.
Mike enrolls in Medicare Part B (medical insurance) right away and then sets about shopping for a Part D prescription drug plan. He does some comparisons, chooses a plan and enrolls about 5 months after retiring – well within the 8-month time frame.
Mike is shocked to hear that he will be charged a Part D late enrollment penalty and that he will have to pay it every month for as long as he has Part D.
Mike isn’t a real person but his story is not uncommon. What happened?
Medicare Part D has its own enrollment rules.
Medicare offers qualified individuals who work past age 65 an 8-month Special Enrollment Period for Part B – and for Part A if not already enrolled – but Part D has its own rules. This is a detail you need to pay attention to if, like Mike, you’re enrolling in a Part D plan or a Medicare Advantage plan (Part C) that includes drug coverage after your Initial Enrollment Period ends.
Rather than 8 months, Mike actually had 2 months to secure drug coverage after retiring. The short timeframe is due to a Medicare rule that says you can’t go more than 63 days without Part D or creditable drug coverage after you are enrolled in Part A and/or Part B.
Mike’s employer plan satisfied the creditable coverage requirement. He would have avoided the late enrollment penalty if he had joined a Part D plan and had active coverage within the 63-day timeframe.
Plan ahead and avoid the Part D late enrollment penalty.
There’s a lot to think about when planning for retirement. Timing your Medicare Part D enrollment is just one consideration – but it’s one that can have a long-lasting effect. The Part D late enrollment penalty is 1% of the national average premium for each month you’re late. It’s added to your monthly premium payment for as long as you have Part D.
- Make sure you have creditable drug coverage if you plan to delay Part D enrollment past your Initial Enrollment Period.
- Plan to have active Part D drug coverage, through either a Part D plan or a Medicare Advantage plan, within 63 days of retiring or losing your employer or other creditable coverage.
Employer and union health plans are required to provide a notice of creditable drug coverage each fall to plan members who are working and eligible for Medicare. Ask your plan administrator for a copy if you did not get a notice in the mail. Keep the document with your important papers. You may need it if you decide to enroll in a Part D plan when you retire.
The bottom line
Don’t be like Mike. Learn the details of Part D enrollment timing and plan accordingly.
For more information, explore MedicareMadeClear.com or 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.Tags: Medicare Part D, medicare part d enrollment