Steer Clear of Medicare Part D Penalties


Navigating the world of Medicare penalties can be a challenge. M3 Elevate, a division of M3 Insurance, partners with Medicare individuals to help guide them through precautionary measures to avoid penalties and ensure proper coverage.

When it comes to drug coverages for those who qualify for Medicare, it’s recommended that individuals 65+ have some form of drug coverage through Medicare Part D or employer coverage due to the high out-of-pocket drug costs. Check out a breakdown of different scenarios based on your current drug coverages to determine if Medicare Part D is right for you.

With the recent spike in questions around Medicare Part D penalties, M3 Elevate has pulled together key information on how to avoid Medicare Part D penalties and how penalties are calculated.

Ways to Avoid Medicare Part D Penalties

Enroll in Medicare drug coverage when you’re first eligible

Whether you are taking prescription drugs or not, you should consider enrolling in a Medicare drug plan or Medicare Advantage Plan that include drug coverage. This step will help you avoid potential penalties. There are a variety of options that can meet your needs, with little to no monthly premiums. M3 Elevate’s Medicare team can partner with you to determine these options.

The most efficient way to avoid penalties is to sign up for Medicare during your initial 7-month enrollment period. The only way to sign up for Medicare outside of the enrollment period is if you qualify for a special enrollment period (with documentation). In most cases, you can qualify for special enrollment if you have creditable health insurance coverage – including if you or your spouse still works for an employer who offers this coverage, a military health benefits program, or you or your spouse is an active-duty service member.

Additional reminder: Keeping records of your previous creditable prescription drug coverage and informing your Medicare plan is an essential step to avoiding penalties.

Enroll in Medicare drug coverage in the event you lose creditable coverage

What is creditable prescription drug coverage? Creditable prescription drug coverage includes coverage from a current or previous employer/union, TRICARE, Indian Health Service, Department of Veterans Affairs, or individual health insurance coverage. If you have non-Medicare drug coverage, your plan must tell you every year if your non-Medicare drug coverage qualifies as creditable coverage.

If you lose access to your creditable drug coverage, you have 63 days to enroll into Medicare drug coverage without penalties. M3 Elevate can provide guidance that can help you avoid preventable penalties and is filled with a team of experts who understand these deadlines.

Twice a month, M3 Elevate leads on Medicare Education Sessions. These events are complimentary and intended for educational purposes. Register for any one of these events, from now through September, and get your Medicare questions answered.

Register for the bi-monthly complimentary Medicare education sessions

*Sessions led by Virginia Van Haren and Jason Haglund

So, How Much is a Late Enrollment Penalty

The fee for a late enrollment penalty depends on how long you didn’t have access to creditable prescription drug coverage. These penalties typically last the entire length of your Medicare drug coverage.

  • As of 2022, the late enrollment penalty fee is calculated by multiplying 1% of the “national base beneficiary premium” ($33.37 in 2022) by the number uncovered months that you were eligible but didn’t enroll in Medicare drug coverage OR creditable prescription drug coverage.

The grand total is rounded to the nearest $.10 and added to your monthly premium bill. Note: The “national base beneficiary premium” and the penalty amount may increase each year. After you complete the enrollment process for Medicare drug coverage (Part D), your plan will inform you of any penalties and premium.

Key Takeaways

M3 Elevate has a team of Medicare experts who understand what it takes to avoid the complicated Medicare Part D penalties. Please share any questions you may have with our M3 Elevate team. In general, Medicare penalties last for as long as you have a Medicare drug plan. Be sure you know understand your Medicare enrollment timeline to avoid these permanent penalties.

  • Individuals who enroll in Medicare drug coverage when you are first eligible can prevent penalties
  • If an individual loses creditable coverage, they must enroll in Medicare drug coverage within 63 days in order to prevent penalties
  • Individuals must inform their Medicare plan about previous creditable prescription drug coverage to avoid paying a potential penalty for the remainder of your Medicare enrollment

*This information was pulled from to provide readers with action steps to avoid Medicare Part D penalties.

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