How to avoid a Medicare Part D late-enrollment penalty

Dear Toni: I retired in April and had a telemarketing agent help me find a Medicare supplement, which began May 1. No one told me that I had a specific amount of time to enroll in my Medicare Part D plan. I have a serious health issue with Crohn’s disease and should have enrolled at that time for Medicare Part D.

When I enrolled this September for a new Medicare Part D plan, I was denied because I did not apply on time. I take Stelara, which is more than $2,000 a month that I now must pay on my own.

I am 70 years old and was informed that the penalty for not enrolling in a Medicare Part D prescription drug plan will be $0.3337 times 60 months, since my Medicare Part A began five years ago at 65. I cannot believe that I must pay an extra $20 per month as a Part D “penalty.”

Please explain this ridiculous Medicare Part D rule and when I can begin my plan. I have not purchased my Stelara since I left my employer’s health plan. — Sydney from Atlanta

Dear Sydney: First, the good news: You can enroll in your Medicare Part D plan that covers your expensive Stelara and other prescriptions that you are currently taking during Medicare’s annual enrollment period, from Oct. 15 through Dec. 7. Your effective date will be Jan. 1, and you can purchase your Stelara on New Year’s Day if your pharmacy is open.

The bad news: You were denied Medicare Part D prescription coverage because you met Medicare’s LEP (late enrollment penalty) rule and will receive a Part D penalty when you enroll during Medicare’s annual enrollment period … a penalty that lasts a lifetime.

Once you are past 65 and leaving a creditable employer’s group coverage with a prescription drug plan, Medicare gives you only 63 days to enroll in Medicare Part D or a Medicare Advantage plan with prescription drug coverage. What’s worse is that your LEP did not begin from the day you left your company health plan, nor from your Medicare Part B start date, but from the month your Medicare Part A began.

The LEP penalty for Medicare Part D can be because:

1. You waited past 63 days without creditable prescription drug coverage upon leaving company benefits and you are older than 65 years, 90 days.

2. Your company prescription drug benefits (not health insurance) were not “creditable” as Medicare defines it.

3. You never enrolled in Medicare Part D at the time you enrolled in Medicare Parts A and B when you turned 65 and now want to enroll.

Americans retiring after 65 who are leaving employer’s health plans and applying for Medicare Parts A and B must also prove they have “creditable” coverage when applying for a Medicare Part D prescription drug plan. This is a Medicare rule.

Readers: Do not wait past 63 days to get Medicare Part D upon leaving company health insurance!

Toni King is an author and columnist on Medicare and health insurance issues. For a Medicare checkup, email info@tonisays.com or call 832-519-8664.