Part D late enrollment penalty

Gen­er­al­ly, if you did not sign up for Part D cov­er­age dur­ing your ini­tial enroll­ment peri­od, and you did­n’t have oth­er cred­itable drug cov­er­age (at least com­pa­ra­ble to Medicare’s stan­dard pre­scrip­tion drug cov­er­age) for at least 63 days in a row after your ini­tial enroll­ment peri­od, you may have to pay a late enroll­ment penal­ty. The late enroll­ment penal­ty is added to your month­ly Part D pre­mi­um. Your ini­tial enroll­ment peri­od is the 7‑month peri­od that starts 3 months before you turn age 65 (includ­ing the month you turn age 65) and ends 3 months after the month you turn 65.

 

What is the Medicare open enrollment period?

The Medicare open enroll­ment peri­od is the time dur­ing which peo­ple with Medicare can make new choic­es and pick plans that work best for them. Each year, Medicare plans typ­i­cal­ly change what they cost and cov­er. In addi­tion, your health-care needs may have changed over the past year. The open enroll­ment peri­od is your oppor­tu­ni­ty to switch Medicare health and pre­scrip­tion drug plans to bet­ter suit your needs.

 

When does the open enrollment period start?

The Medicare open enroll­ment peri­od begins on Octo­ber 15 and runs through Decem­ber 7. Any changes made dur­ing open enroll­ment are effec­tive as of Jan­u­ary 1, 2016.

Dur­ing the open enroll­ment peri­od, you can:

  • Join a Medicare Pre­scrip­tion Drug (Part D) Plan
  • Switch from one Part D plan to anoth­er Part D plan
  • Drop your Part D cov­er­age alto­geth­er
  • Switch from Orig­i­nal Medicare to a Medicare Advan­tage Plan
  • Switch from a Medicare Advan­tage Plan to Orig­i­nal Medicare
  • Change from one Medicare Advan­tage Plan to a dif­fer­ent Medicare Advan­tage Plan
  • Change from a Medicare Advan­tage Plan that offers pre­scrip­tion drug cov­er­age to a Medicare Advan­tage Plan that does­n’t offer pre­scrip­tion drug cov­er­age
  • Switch from a Medicare Advan­tage Plan that does­n’t offer pre­scrip­tion drug cov­er­age to a Medicare Advan­tage Plan that does offer pre­scrip­tion drug cov­er­age

 

What should you do?

Now is a good time to review your cur­rent Medicare plan. As part of the eval­u­a­tion, you may want to con­sid­er sev­er­al fac­tors. For instance, are you sat­is­fied with the cov­er­age and lev­el of care you’re receiv­ing with your cur­rent plan? Are your pre­mi­um costs or out-of-pock­et expens­es too high? Has your health changed, or do you antic­i­pate need­ing med­ical care or treat­ment? Open enroll­ment peri­od is the time to deter­mine whether your cur­rent plan will cov­er your treat­ment and what your poten­tial out-of-pock­et costs may be. If your cur­rent plan does­n’t meet your health-care needs or fit with­in your bud­get, you can switch to a plan that may work bet­ter for you.

 

What’s new in 2016?

The ini­tial deductible for Part D pre­scrip­tion drug plans increas­es by $40 to $360 in 2016. Also, most Part D plans have a tem­po­rary lim­it on what a par­tic­u­lar plan will cov­er for pre­scrip­tion drugs. In 2016, this gap in cov­er­age (also called the “donut hole”) begins after you and your drug plan have spent $3,310 on cov­ered drugs. It ends after you have spent $4,850 out-of-pock­et, after which cat­a­stroph­ic cov­er­age begins. How­ev­er, part of the Afford­able Care Act grad­u­al­ly clos­es this gap by reduc­ing your out-of-pock­et costs for pre­scrip­tions pur­chased in the cov­er­age gap. In 2016, you’ll pay 40% of the cost for brand-name drugs in the cov­er­age gap and 58% of the cost for gener­ic drugs in the cov­er­age gap. Each suc­ceed­ing year, out-of-pock­et pre­scrip­tion drug costs in the cov­er­age gap con­tin­ue to decrease until 2020, when you’ll pay 25% for cov­ered brand-name and gener­ic drugs in the gap.

 

Where can you get more information?

Deter­min­ing what cov­er­age you have now and com­par­ing it to oth­er Medicare plans can be con­fus­ing and com­pli­cat­ed. Pay atten­tion to notices you receive from Medicare and from your plan, and take advan­tage of help avail­able by call­ing 1–800-MEDICARE or by vis­it­ing the Medicare web­site, www.medicare.gov.