Medicare Part D (Prescription Part) … and the temptation to postpone enrollment.

by Michael on October 26, 2019

in Uncategorized

Is it okay to put off enrolling in a Part D plan when a person enters Medicare? Well, the simply answer is “you can”, but what are the ramifications of doing so?

According to the Medicare Web Site: “Medicare calculates the penalty by multiplying 1% of the “national base beneficiary premium” ($33.19 in 2019 and $32.74 in 2020) times the number of full, uncovered months you didn’t have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium.”

What does this mean for you? Here is one example: Suppose you entered Medicare in 2019 and choose to not buy a Part D Plan. Later, you decide you need one. I am going to use the age 70 for this example. So that is 60 months without coverage. If you take the “national base beneficiary premium” amount of 33.19 and times that by 1%, this is 33 cents. If you times that by the 60 months (without coverage) this translates to $19.80, per month, which is the increase in premium a person will pay for life. CMS administers this. The numbers shown can change [based on when a person actually enrolls and other factors] but this is a realistic example of what happens in the real world.

So is it just the additional premium of $237 per year (19.80 per month) that a person needs to be concerned with? No. It actually is not even the greatest concern.

When a person enrolls in Medicare they are allowed to join a Part D plan, no matter the month. But to enroll later, the enrollment must wait until a January (in almost all cases). How does a person pay for a prescription or prescriptions, after a medical situation presents, until then? In most cases with cash. And the difference between a “cash price” and an “insured price” can be astronomical.

I do not think it’s an exaggeration to say that thousands of dollars are at risk, and not just “at risk”, it happens fairly often. Just to illustrate this further, even Medi-Cal (Medicaid) will usually purchase a Part D plan for their members as opposed to them paying for the drugs themselves.

In short, unless you have a prescription coverage elsewhere, I highly advise you to purchase Part D coverage when enrolling in Mediare. The cost is low and must be measured against a huge risk if you decide to forego or postpone coverage.

Even if you postpone other insurances that are needed, please do not postpone this insurance.

Call me for more information about this or Medicare Supplement plans. You will be glad you did.

Michael Myers

CA License 0561502

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