Medicare Penalty Info for you

Dudewho

Dudewho

Member
Location
NORTH CAROLINA
If you don't enroll in Part B when it is availible to you and do not have "creditable coverage", that is coverage that is considered by Medicare to be equal to Medicare, than you pay %10 per year more for Part B for every year you didn't have it.

If you do not take Part D when it is availible to you, (when are first Part A OR Part B eligible), you pay a Part D penalty if you don't have "creditable part D coverage".
The Part D penalty is %1 per month of the average part D plan cost.
If the average part D plan is $30.00 a month than the penalty would be 30 cents a month for every month you didn't have it.

Example-
You don't take part D coverage in Jan. of 2016 and now intend to take it in Jan. of 2017. You have found a Part D plan that is $28.00 per month and it will fit your needs.

You pay a penalty for not having a Part D plan coverage of $.30 x 12 months=$3.60

$28.00 Part D plan premium
$ 3.60 Penalty will be add to the cost of the plan MONTHLY
$31.60 Will be your MONTHLY PART D Cost
 

Kitties said:
I'm over 8 years away from MC but is it really this complicated?
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It's not really complicated. But the deadlines are firm ones, so when you get your letter telling you to sign up, DO IT. You can't sign up early, you have to wait until you get the sign-up letter. At that point you have a bit less than 30 days, counting from the date of the letter, to go on-line and sign up.

Whether you are working or not, if you have insurance you should STILL sign up on-line. Most insurers want to become the secondary insurer and have Medicare take over as primary. Make sure you know what your policy covers so that you can skip Part D if you don't need it.

One thing Dudewho did not mention: Congress re-sets the premiums for Medicare every year. They usually rise every year, too. Any penalty you pay for not signing up when you should, is carried over proportionately to the new year's premium.

IOW, if you forget to sign up in your first eligible yr and are charged the 10% penalty for signing up in your second yr, I believe that 10% penalty is still assessed on the new second yr's premium.
 
Dennis K said:
Good info. Only 18 months away and starting to look at all of this to avoid any surprises.
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A year and a half in advance? Way too early even to start thinking about it.

Medicare is not complicated but those who try to do research also tend to overthink what is a pretty easy subject. I tell my clients that if they give me 90 seconds they'll understand Medicare more than all of their friends. (Those same friends tend to recommend the wrong supplement almost all of the time).

When I speak with people more than 3 months away from qualifying I ask them to call me about 60 days before their start date. It takes very little time to make the right decision. Seek out an insurance agent who specializes in Medicare plans. Not the guy on the corner that sells you auto insurance.

Rick
 
How does one find an agent that specializes in Medicare plans? Hubby turned 65 this year and we were literally buried in marketing mail for plans. Fortunately he is still working and only had to sign up for part A.
 
JayBird said:
How does one find an agent that specializes in Medicare plans? Hubby turned 65 this year and we were literally buried in marketing mail for plans. Fortunately he is still working and only had to sign up for part A.
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That's a very good question since most agents don't specialize in Medicare. And while it's really not rocket surgery I see too many people with plans that clearly are too expensive, and that's the fault of the agent "defaulting" to the one or two companies he/she represents. Or worse, the Medicare beneficiary just called one or two companies they have heard of.

I'm happy to help and can provide prices in all states, although I am only licensed in about a dozen or so. If nothing else, you will avoid wasting a lot of time learning about options.

Rick
 
JayBird said:
What about the online programs that show you options. Any good?
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You're asking an insurance agent if there is a program that will replace professional advice? While you certainly can do all this on your own since it costs nothing to work with a professional why wouldn't you?

Rick
 
Thanks for your post Dudewho. Very timely for me, as I turn 65 tomorrow and am officially on Medicare. I am still debating the financial practicality of taking a part D plan, as I am currently not taking any prescription medication. And as was mentioned, it all could change.
 
deesierra said:
Thanks for your post Dudewho. Very timely for me, as I turn 65 tomorrow and am officially on Medicare. I am still debating the financial practicality of taking a part D plan, as I am currently not taking any prescription medication. And as was mentioned, it all could change.
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Dee you may not be taking any medication now, but if you don't sign up to a drug plan you will pay a penalty later!!! Make sure you get a Part D plan NOW!!
 
Ken N Tx said:
Dee you may not be taking any medication now, but if you don't sign up to a drug plan you will pay a penalty later!!! Make sure you get a Part D plan NOW!!
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I know you pay a penalty for delaying because I got hit with it. In general I shy away from drugs but I found out I got penalized to the point it was like price gouging by the pharmacies for not having a drug plan when I did need something to the point I was charged $100+ for something I had gotten a few years early without insurance for $20. But I'm not sure the price penalty for the Part D insurance premium is punitive or more in line with making up what you didn't pay for the years you didn't have it... sort of like how much you get taking SS at 62 versus 66 on a monthly basis versus the cumulative amount after you reach 80 or so.

I guess what I'm getting at is if I had of known of GoodRX and it works as advertised, I might have just tried using it instead of getting Plan D because on the surface it looks pretty good for folks that don't use a lot of prescription drugs. There is no fee, it has some kind of discount pricing arrangement, it does price comparisons for you, and the is no charge for using it... as I understand it. So the cumulative cost might be comparable?
 
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deesierra said:
Thanks for your post Dudewho. Very timely for me, as I turn 65 tomorrow and am officially on Medicare. I am still debating the financial practicality of taking a part D plan, as I am currently not taking any prescription medication. And as was mentioned, it all could change.
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DO NOT take that chance. You could end up with a huge financial hit if drug prices keep going up, or even if they don't, for that matter. IMHO it is penny wise and pound foolish not to have the part D -- you'll wind up with a fat penalty if you need it later on, and you probably will. Hardly any of us get out of life without taking at least one prescription as we get older.
 
dpwspringer said:
I know you pay a penalty for delaying because I got hit with it. In general I shy away from drugs but I found out I got penalized to the point it was like price gauging by the pharmacies for not having a drug plan when I did need something to the point I was charged $100+ for something I had gotten a few years early without insurance for $20. But I'm not sure the price penalty for the Part D insurance premium is punitive or more in line with making up what you didn't pay for the years you didn't have it... sort of like how much you get taking SS at 62 versus 66 on a monthly basis versus the cumulative amount after you reach 80 or so.

I guess what I'm getting at is if I had of known of GoodRX and it works as advertised, I might have just tried using it instead of getting Plan D because on the surface it looks pretty good for folks that don't use a lot of prescription drugs. There is no fee, it has some kind of discount pricing arrangement, it does price comparisons for you, and the is no charge for using it... as I understand it. So the cumulative cost might be comparable?
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Not worth taking the chance, IMHO.
 
JayBird said:
How does one find an agent that specializes in Medicare plans? Hubby turned 65 this year and we were literally buried in marketing mail for plans. Fortunately he is still working and only had to sign up for part A.
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We just went on the Medicare.gov site and got all the info we needed. It did take some reading, but it's not really difficult. The hardest thing for my husband was to decide what insurance on Part B (or is that Part C, I always forget?) he wanted. I signed up for Part A only because I'm still working and am covered under my employer's insurance. Medicare became the primary for any major things. Since I haven't had any major issues, I haven't needed to use it.

It has worked very very well for my husband for the past few years. He pays $153 per month. If Medicare is repealed, which is looking increasingly likely given the president-elect's cabinet choices, it could get very expensive to have to same coverage once Medicare is repealed.
 
BlondieBoomer said:
We just went on the Medicare.gov site and got all the info we needed. It did take some reading, but it's not really difficult. The hardest thing for my husband was to decide what insurance on Part B (or is that Part C, I always forget?) he wanted. I signed up for Part A only because I'm still working and am covered under my employer's insurance. Medicare became the primary for any major things. Since I haven't had any major issues, I haven't needed to use it.

It has worked very very well for my husband for the past few years. He pays $153 per month. If Medicare is repealed, which is looking increasingly likely given the president-elect's cabinet choices, it could get very expensive to have to same coverage once Medicare is repealed.
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Well, not quite. Without Part B (and you don't need that since you have group coverage), Medicare will come into play for charges billed by the hospital for inpatient services (Part A). Everything else is Part B and without that how can Medicare be primary?

As far as your husband having to decide what insurance on Part B, that also isn't correct. Supplements pay both Part A and Part B charges.

This is EXACTLY why people should work with a professional. There is no cost to do this.

Rick
 

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