Most people join a Medicare Part D Plan during their Initial Enrollment Period (IEP). IEP is a 7-month period that occurs when you first become eligible for Medicare. It starts three months before the month of your 65th birthday an ends three months after the month of your 65th birthday.
If you have Medicare due to a disability, your IEP for Medicare Part D starts 3 months before the 25th month of your disability and ends 3 months after your 25th month of disability.
For most people, their IEP is the best time to get Part D coverage. The one exception is if you have “credible coverage” through an employer health plan or retirement benefit. It’s best to call Medicare to make sure the coverage you have is credible.
If you don’t enroll in Part D when you are first eligible, and you don’t have credible coverage, Medicare will assess a late penalty on top of your Part D premium. It’s not a one-time penalty, either. You pay it for as long as you have coverage.
When Does Part D Coverage Begin?
If you join a plan during your IEP prior to the month of your 65th birthday, your prescription coverage starts on the first day of your birthday month. If you join during or after your birth month, your coverage starts on the first day of the next month. It works the same way if you have Medicare for a disability. The key month is the month you receive your 25 SSI payment.
When Is The Medicare Part D Plan Annual Election Period?
If you missed your IEP, or if you have a Part D Plan and want to change it, mark the Annual Election Period (AEP) on your calendar. Commonly called the Medicare Open Enrollment, AEP is the time of year when all Medicare beneficiaries can join, drop, or switch plans.
AEP is the same time each year. It starts on 15 October and ends promptly on 7 December. Be aware that coverage does not start immediately. Regardless of the day you join, your coverage begins on 1 January and continues for the entire year.
There are some rare cases where you may be eligible to enroll during a Special Enrollment Period (SEP). If you are eligible for a SEP, Medicare will send information to you in the mail with details and instructions.
There is one additional enrollment period that may apply to you. Each year from 1 January through 14 February 14, anyone enrolled in Medicare Advantage Plans with prescription drug coverage (an MA-PD plan) can join a Part D plan if they first cancel their MA-PD and return to Original Medicare. This is the Medicare Advantage Disenrollment Period.
Is Medicare Part D Mandatory?
Medicare Part D is not mandatory. However, unless you have other credible coverage, it is critical that you enroll as soon as you are first eligible. If you don’t, you may have to pay a late enrollment penalty in addition to your monthly Part D premium if you decide to enroll later. The late enrollment penalty also applies if you go without Medicare prescription drug coverage (or creditable coverage) for 63 or more days. The penalty adds 1 percent to your premium for every month that you didn’t have creditable coverage.
What If I Don’t Take Prescription Medications?
Prescription drug coverage is a smart choice for all seniors. Even though you may not take medications now, you never know when you will need them. If you don’t currently have prescriptions, choose one of the low-cost basic plans. You can always upgrade next year if your medical needs change. Also, don’t forget that enrolling in a Part D plan when you are first eligible will save you a lot of money down the road.