Medicare Drug Coverage: What Is Late Enrollment Penalty And How Can You Avoid It?
Have questions about your Medicare options?
When getting a Medicare prescription drug plan, there are two options that you can go through. One way is through the Medicare part D plan, and the other is through Medicare Advantage. However, you must take note of the designated enrollment period to join the drug plan. Failure to do so will grant you a “Late Enrollment Penalty.”
What exactly is the Late Enrollment Penalty (LEP)?
The LEP is an additional amount that you will permanently pay together with your drug plan premium. You’ll receive this penalty if you haven’t enrolled in Medicare drug coverage for 63 days after the Initial Enrollment Period. This also applies if you are not registered in a creditable prescription drug coverage and not only exclusive to Medicare drug coverage.
How much is the Late Enrollment Penalty?
Two factors affect the amount of the LEP. One factor is the number of whole months without drug coverage. Meanwhile, the other is the “national base beneficiary premium” of the current year since it can change every year.
The first step is to determine 1% of the national base premium ($33.06 in 2021). The next step is to multiply the answer by the number of months without coverage. Lastly, round up the answer to the nearest $0.10. This amount will be added to the monthly premium for as long as the client has Medicare drug coverage.
How to avoid the Late Enrollment Penalty?
Aside from being one of our top priorities in life, health care is also expensive. To maintain excellent health, we should also be wary of our finances. This is why we cannot afford to spend money in unnecessary ways, such as paying the LEP. Here are ways to avoid being subject to the late enrollment penalty.
Conclusion
When it comes to your health and finances, you should always be aware. These are vital aspects of your life that you should never neglect. Always make sure that you have great control and protection of these things.
At The Medicare Space, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (866) 717-8683 or Click Here to request a free quote.
The LEP is an additional amount that you will permanently pay together with your drug plan premium. You’ll receive this penalty if you haven’t enrolled in Medicare drug coverage for 63 days after the Initial Enrollment Period. This also applies if you are not registered in a creditable prescription drug coverage and not only exclusive to Medicare drug coverage.
How much is the Late Enrollment Penalty?
Two factors affect the amount of the LEP. One factor is the number of whole months without drug coverage. Meanwhile, the other is the “national base beneficiary premium” of the current year since it can change every year.
The first step is to determine 1% of the national base premium ($33.06 in 2021). The next step is to multiply the answer by the number of months without coverage. Lastly, round up the answer to the nearest $0.10. This amount will be added to the monthly premium for as long as the client has Medicare drug coverage.
How to avoid the Late Enrollment Penalty?
Aside from being one of our top priorities in life, health care is also expensive. To maintain excellent health, we should also be wary of our finances. This is why we cannot afford to spend money in unnecessary ways, such as paying the LEP. Here are ways to avoid being subject to the late enrollment penalty.
- Enroll immediately in a Medicare drug plan when first eligible
You should already consider joining a Medicare drug plan when you’re eligible, even if you’re not taking any medication. Just make sure to find a plan that suits your situation, most preferably if it’s less expensive. - Enroll immediately in a Medicare drug plan after losing creditable drug coverage
If you lost your creditable drug coverage, immediately enroll in a Medicare drug plan before the 63-day mark. Also, make sure to check if your drug coverage is “creditable prescription drug coverage.” If your drug coverage is not part of this, the 63-day period is already in play, so better watch out. - Keep records that are proof of your creditable drug coverage enrollment
It would help if you informed your Medicare plan of your previous enrollment in creditable prescription drug coverage. You will have to show them evidence of your registration, or else you would be subject to the LEP.
Conclusion
When it comes to your health and finances, you should always be aware. These are vital aspects of your life that you should never neglect. Always make sure that you have great control and protection of these things.
At The Medicare Space, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (866) 717-8683 or Click Here to request a free quote.
