Didn’t Sign Up for Part D Medicare – Double Ouch!
Category: Financial and taxes in retirement
November 24, 2015 — There are many classic examples of the kind of mistake made by your Topretirements.com editor. They include experts who don’t listen to their own advice: the cobbler with holes in his soles, the doctor who still smokes, the plumber with a leaky faucet – you get the picture. We’re sharing our mistake – the kind you would think someone who has a good grip on retirement matters wouldn’t make – so you don’t make the same one. Our mistake was not to sign up for Part D, prescription drug coverage, when we originally enrolled in Medicare. If you don’t currently have prescription drug coverage, consider yourself forewarned: you still have time to take corrective action during the current Medicare enrollment period, which ends December 7, if that is what you decide after reading this article.
2 very serious consequences
Failing to sign up for Part D insurance when you first become eligible can have two serious, even disastrous consequences:
1. You pay a penalty of 1% a month for every month you do not have “creditable” prescription drug coverage. In our case, it means a 30% penalty on our monthly premiums – forever!
2. Inability to get coverage immediately. There is an open enrollment period every year from Oct. 15 – Dec. 7 where you have the option to sign up for Part D insurance (or change your Part B or C plans). But let’s say you don’t take that option, and next February you are diagnosed with a serious medical condition that requires $25,000 worth of drugs, taken immediately, to treat it. Even if you register for Part D on Oct. 15 you are out of luck until January 1 – that’s the earliest your new plan can kick in. Although the odds are low of this (or something worse) happening – it is possible!
To Part D – Or Not
When you hit age 65 and sign up for Medicare you have many choices. Part A is the hospital component, Part B or C cover doctor and outpatient type claims, and then there is Part D – prescription drugs. Part C programs typically include prescription drug coverage, so you don’t need Part D if it is included there. In our case, at age 65 we signed up for Part A, Part B, and an commercially available Medigap policy from Anthem. When it came to Part D, we were like a lot of people we know – we don’t currently take any prescription drugs, and our insurance agent didn’t
Comments on "Didn’t Sign Up for Part D Medicare – Double Ouch!"
Marsha K says:
I have read this twice but still not sure... We will have an employment based secondary insurance policy which includes prescription drugs. Confirm, therefore, I will not have to sign up for Medicare Part D when I do turn 65. What if my employment policy eliminates prescription coverage in the future? Will I be penalized?
Kgk says:
marsha, just check and see if your former employer has creditable insurance (most likely yes) then you will be fine.
Karen says:
This is my 5th year without part D. If one has less than $24,,000 income per year, than there are several programs that will provide free or low cost medications for those of us on Medicare. I choose not to buy a drug plan because I have allergies to many drugs. Also many drug stores have prescription saving plans that provide similar savings to part D plans. If I need expensive drugs for cancer, I would probably go the clinical trial route. With my allergy problems, I won't handle the cancer drugs anyway.
Bob J says:
I have a question similar to Marsha's. My wife is 66 and not employed. She did sign up for Medicare part A but not C or D because she is fully covered on my employers policy. (I still work). She has MS and takes very expensive prescription medications. When I retire and we need part D coverage, will she be penalized?
elaine says:
Marsha, my part B is through one of my former employers and they do cover Part D and I was told by them not to sign up for part D when I "became of age". the material for this open period lists the prescription coverage. since I am covered, I should not have a problem...even if they drop coverage. It is meant for those who have had no coverage. The penalty is meant for those who do not pay until they need coverage...trying to game the system. Unfortunately, it is those "non scammers" who get caught with an innocent mistake.
Karen, if allergic to many drugs, you probably not be choosen for a clinical trial. Have you tried to get into a clinical trial involving drugs and been successful? The drug store route may work best for you.