Part D Late-Enrollment Penalty

I got a call yesterday from a client who signed up for a Medicare Advantage plan three years ago.  He has had Part D as part of his Medicare Advantage plan for the last three years, but he just got a letter saying he must pay a premium from now on for his $0 premium Advantage plan.

It turns out that Jim did not sign up for Part D when he turned 65 and two years went by before he enrolled in Part D through a Medicare Advantage plan. Three years ago, I don’t think the Medicare Advantage plans enforced the late-enrollment penalty, but it looks like Medicare has been auditing the plans and finding people who had not been assessed a penalty.

Jim will have to pay around $7 per month for his Part D late-enrollment penalty.  He’s okay paying the penalty because his Medicare Advantage plan has no co-pay for the expensive drugs he takes to control his blood sugar.  Drugs like Byetta, Avandia, Januvia, Tradjenta, Metformin, Glumetza, Janumet, and Actoplus have a $0 co-pay on his plan.  Jim is in a plan for people with Diabetes and he gets two drugs each month for $0 this year. Last year he paid $45 per month for each prescription refill. The full retail cost of many anti-diabetic drugs can be $200 or more.

I have met with a number of people turning 65 (including a doctor) who decided not to enroll in a Part D plan because they took only one or two cheap generic drugs.  I told them about the late-enrollment penalty they would face if their prescription needs should change in the future. Diabetes is one of those illnesses that sneak up on people – and the drugs to treat it are expensive.

Luckily for Jim, his penalty is only around $7.  Last year I enrolled a woman in a plan for people with Diabetes and her late-enrollment penalty was $27.  I think she had gone 7 years without Part D.

Part D is voluntary, but there is a price to pay later on for not enrolling when you are first eligible.  If a person gets a Medicare supplement, they need to buy a “stand-alone” Part D plan and pay from $12 to $34 (or higher) per month. If a person enrolls in a Medicare Advantage plan, Part D is usually included at no additional charge – and most Advantage plans in Arizona have $0 premium.

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