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Do you really need Medicare Part D if you're not taking any medications? Not necessarily. BUT, many folks don't realize that there is a Part D penalty that Medicare beneficiaries are subject to for every month that they go without credible Part D coverage. It’s called the Part D late enrollment penalty.
The late enrollment penalty amount typically is 1% of the Part D national base beneficiary premium for each full, uncovered month that the person didn’t have Part D or creditable coverage. Medicare, not the drug company determines the penalty. And Medicare bases this off of the average Part D premium for that year. The national base beneficiary premium for 2019 is $33.19. The monthly penalty is rounded to the nearest $0.10 and added to the monthly Part D premium.
So, let’s say in our example this person has been without credible Part D drug coverage for 30 months. 1% of $33.19 is $.33. $.33 x 30 months = $9.90. This person has now accumulated a $9.90 Part D late enrollment penalty, and a penalty is going to be tacked on to their Part D premium for the rest of the time they have a Part D plan. Let’s say they sign up for a Part D drug plan that is $20/month. The total premium will now be $29.90/month with the late enrollment penalty added on. The Part D penalty can change annually and Medicare determines the premium based off of the national base beneficiary premium for that year.
In general, if you have had a break in credible prescription drug coverage of 63 days or more after the end of your initial enrollment period for Medicare, you will face a Part D penalty.
Even if you are taking no medications you can always simply sign up for the least expensive Part D plan in your area to avoid the penalty. In many areas Part D drug plans begin at $10-$15/month.
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