If you have recieved a letter telling you that you owe a late enrollment penalty you may be wondering exactly what this is and why you owe it. Since we are almost at the AEP or Annual Enrollment Period, Nov. 15th thru Dec. 31st this should be a concern for anyone who is even considering NOT joining a Part D plan.
People who don’t enroll in a Part D Prescription Drug Plan when they are first eligible to do so may be subject to a late enrollment penalty or LEP if they decide to enroll later on. The LEP is a “lifetime” penalty. That is to say that the penalty amount will be added to their base monthly premium for as long as they remain enrolled in a Medicare Drug Plan.
The penalty is 1% of the average national monthly premium for each full month the person was eligible to enroll, but did not do so. The penalty calculation is started May 16th of 2006 or three months after the beneficiary first becomes eligible for Medicare.
Those people who have creditable prescription drug coverage instead of Part D are exempt from this penalty as long as they enroll in a Part D plan within 63 days of losing their creditable coverage.
The penalty, as we have said before, is meant to be “ENCOURAGEMENT” for you to join a Part D plan. No one knows the future and even if you are not taking prescription drugs NOW, you may need them unexpectedly. That is why it is important to get the coverage. You can choose a Part D plan that is inexpensive, just in case you need it.
We can help you find the Part D plan in your state with the lowest Premium.
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