/ Ask Terry Questions / Medicare Part D — The Penalty!

Medicare Part D — The Penalty!

By Terry Savage on October 31, 2018 | Insurance

Re. Article on Medicare in SD Union Tribune on Sunday 28 Oct

I enrolled in Medicare Part B effective Sept. 2018 and was not planning to get Part D in 2019. My 2 generic meds cost $6/month at Walmart vs. a Part D Premium of $60/mo. When I checked w Medicare I was informed that the penalty for not getting Part D was a couple of $s/month at most.
Should I enroll in Part D?
Also, you mention a deductible for Part D of approx $415. Does this mean that if I enroll in Part D, I will have to pay the monthly premium (+ a tax by Medicare for high earnings) and also pay for my meds up to $415? So what’s the point of having this plan?

Thank you.

Terry Says

No to the deductible. There must have been some confusion in the editing of that column, and I will re-post. Thanks to all of you who commented on that, my sharp-eyed readers!

And as for not having Part D, I have also heard from numerous readers who get their meds through prescription drug cards more cheaply than they can on the Part D plans, when you consider the monthly premium and the costs of the drugs even when they are covered.

Most mentioned that if they need a 3-month supply and can get it via mail order the costs are less expensive than the Part D coverage requires them to pay!

I’m trying to figure out how to do some sort of “survey” as to the number of people who have figured this out! Are you willing to post — without names — how much you are saving by NOT having Part D.

And there IS one thing I would like to point out. The penalties add up over the years, based on the number of months you have gone without signing up for Part D since first eligible. If you ever DO need recurring prescription drugs and have to sign up late, the whole thing could become VERY costly. Here are the specifics of the Part D penalty:

The penalty amount is set by Medicare, and is: 1% of the “National Base Beneficiary Premium” ($32.02 for 2018), times the number of full months you didn’t have creditable Part D coverage (rounded to the nearest 10 cents). That amount is added to the Part D premium amount as determined by your insurance provider.

Note: That “national base beneficiary premium” also rises every year. So the penalty amount will increase over the years.

Insurance is all about paying something now, in exchange for peace of mind that you’ll have basic, and then catastrophic coverage in the future. You decide how risky it is to pay about $30/month even if you don’t take any prescription drugs now — but might need coverage in the future!

money

ASK TERRY

a personal
finance question