Creditable Coverage

by David Bynon, last updated

What is Medicare Creditable Coverage?

Creditable coverage refers to health insurance or prescription drug benefits that meet Medicare’s minimum qualifications necessary to avoid a penalty.

Individual or group health plans and student health plans can provide creditable coverage. There are also several government-sponsored and government-provided plans. Creditable coverage can be used to determine if policyholders must pay a Medicare penalty for late enrollment or, in certain cases, coverage and costs related to pre-existing conditions.

Prescription drug coverage (for example, from an employer or union) that is expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage. People with this kind of coverage when they become eligible for Medicare can generally keep that coverage without paying a penalty if they decide to enroll in Medicare prescription drug coverage later.


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