Dear Marci,
I enrolled in Medicare about three years ago when I turned 65, but I just enrolled in a Part D plan. I recently found out that my plan is going to charge me a late enrollment penalty. What is this penalty, and what can I do about it?
-Sharon (Nashville, TN)
Dear Sharon,
For each month you delayed enrollment in Medicare Part D, you will have to pay a Part D late enrollment penalty (LEP), unless you:
- Had creditable coverage, meaning coverage that is as good as or better than the basic Part D benefit
- Qualify for the Extra Help program
- Prove that you received inadequate information about whether your drug coverage was creditable
To learn how the penalty is calculated, click here. In most cases, you will have to pay that penalty every month for as long as you have Medicare. There are some exceptions:
- If you receive Extra Help, your penalty will be permanently erased
- If you are under 65 and have Medicare, your LEP will end when you turn 65
- If you qualify for a state pharmaceutical assistance program (SPAP), it may pay your penalty for you. To find out if your state has an SPAP, how it works, and how you can apply, contact your local State Health Insurance Assistance Program (SHIP) by calling 877-839-2675 or visiting www.shiptacenter.org.
If you do not have an appeal form from your plan, you can also use this form.
Unfortunately, being unaware of the requirement to have prescription drug coverage is unlikely to be a successful basis for your appeal. However, the following are good reasons to appeal and may result in the elimination or reduction of your penalty:
- You have Extra Help
- You had creditable drug coverage during some or all of the time period in question
- Call your former plan and ask for a letter proving that you were enrolled in creditable drug coverage. Make sure to attach this letter to your appeal form. Your employer or union may also be able to confirm the fact that you had creditable drug coverage.
- You had non-creditable drug coverage, but your or your spouse’s employer or insurer told you it was creditable or didn’t inform you that it was not creditable
- You were ineligible for Medicare prescription drug coverage (e.g., if you were living outside the U.S. or you were incarcerated).
- You could not enroll into drug coverage because of a serious medical emergency.
The appeal deadline is 60 days from the date you received the letter informing you about the penalty. If you miss this deadline, you can write a letter explaining why you had a good cause, or a good reason--like serious illness--that prevented you from appealing on time. Attach this letter to your appeal. Once your appeal is submitted, you can expect a determination from MAXIMUS within 90 days. In the meantime, pay the LEP to your plan along with your premium. If your appeal is successful, your plan has to pay you back for the LEP payments you made while your appeal was pending.
-Marci
