Open Enrollment for 2012 begins tomorrow, October 15,
and ends on Wednesday, December 7, 2011.
Day 2: The Medicare Part D Myth Buster–Why you should enroll when you first become eligible
If you’ve ever watched the show Mythbusters on the Discovery Channel, you know the hosts Adam Savage and Jamie Hyneman set out to prove–or bust–some of the craziest myths out there. Would a bull do damage in a china shop? Nope, in fact they’ll daintily and nimbly walk among the aisles of breakables. Can you teach an old dog new tricks? You sure can!
So here’s a big myth about Medicare Part D prescription plans that I’m going to dispel for you: “If I don’t use many drugs, or no drugs at all, it’s not worth it for me to enroll in a Medicare Part D plan and pay a monthly premium.”
Busted. That’s like saying you’re not going to get auto insurance because you’ve never had an accident before.
Unless you have creditable prescription drug coverage through another plan (such as from your former employer or union, TRICARE, or Department of Veterans Affairs), it pays to enroll in a plan and pay the monthly premium.
Here are 3 reasons why you should enroll in a Part D plan when you first become eligible:
1. You can’t put a price on peace of mind
2. You can’t sign up for a plan mid-year
3. You will pay a late-enrollment penalty if you change your mind later
Although you may not use many or even any drugs right now, you never know what your drugs needs are going to be down the road. Sure, you may luck out and never have to take drugs for a chronic condition (such as asthma or diabetes), but what if you were in an accident or had a bad case of the flu and had to take a lot of drugs? Without Part D, you’ll be out of luck (or money). Do you really want to worry about that on top of everything else?
Still not convinced? Let’s say you become eligible for Medicare in February but decide not to join a plan because you don’t take any drugs. In June, you’re diagnosed with Lyme disease, so your doctor prescribes several expensive medications. A few months later you experience some complications and have to take a few more drugs. Some of these new-fangled drugs cost hundreds of dollars for people without insurance–why chance it?
The dreaded late-enrollment penalty
Are you starting to think twice about delaying enrollment now? If not, the late-enrollment penalty should be the deciding factor.
If you don’t enroll in a Part D plan when you first became eligible, or you go for 63 continuous days or more without creditable prescription drug coverage,* you will more than likely have to pay a monthly penalty if you join a Part D plan later.
If you must pay a late enrollment penalty:
• The penalty amount will be added to your premium invoice each month.
• You will be charged a penalty for as long as you have Part D coverage—it follows you everywhere, even if you switch plans.
• The penalty amount will change each year, based on the national base plan premium.
How to determine the amount of the penalty that you will pay:
• Count the number of full months you delayed joining a Part D plan after you were first eligible to enroll or the number of full months in which you did not have creditable prescription drug coverage for more than 63 days.
• The penalty is 1% for every month that you delayed or didn’t have creditable coverage.
• Multiply the penalty percentage (1% x number of months) and the national base plan premium (for 2012, the average is $31.08). Then round to the nearest 10 cents.
• For example, if you go 10 months without prescription drug coverage, you will have to pay an extra $3.11 each month in 2012 (1% x 10 x $31.08 rounded up).
In this example above, an extra $3.11 a month doesn’t really sound like much, but do you really want to pay more than everyone else for the same thing?
Tomorrow, the first day of Open Enrollment, I’ll review eligibility windows for enrollment and go over again how to avoid the late-enrollment penalty.
*Creditable prescription drug coverage is coverage that is at least as good as Medicare’s standard prescription drug coverage.