Is Medicare Part D mandatory?
Medicare coverage is not mandatory. However, you must be careful about your Medicare enrollment decisions and your timing, because Medicare may apply a Part D Late Enrollment Penalty (LEP) to your premium if you wait too long to enroll in Part A, B or D after you first become eligible. For example:
- Part A (hospital coverage): Many people automatically qualify for premium-free Medicare Part A coverage, but not everyone. If you don’t qualify, and don’t enroll when you first become eligible, you could be subject to the Part A LEP, which is added to your Medicare Part A premium.
- Part B (medical coverage): For each 12-month period you delay enrollment in Part B after your initial eligibility, you could pay a Part B LEP, unless you have other qualifying health insurance, such as employer or union coverage.
- Part D (prescription drug coverage): If you wait to enroll 63 days or more past your Initial Enrollment Period (IEP), and do not have other ‘creditable’ coverage’ (coverage as good as Medicare standard drug coverage), you may be assessed the Part D Late Enrollment Penalty (LEP) based on the length of your delay. The penalty is added to your monthly Part D premium for as long as you have Medicare Part D. The LEP is calculated by multiplying 1% of the National Base Beneficiary Premium ($35.63 in 2017) -times the number of full, uncovered months you did not have Part D or creditable coverage. The resulting amount is rounded to the nearest $0.10 and added to your monthly Part D premium.
For example, if you went without coverage for 14 months, your LEP equals 1% for each month (14%) multiplied by $35.63 = $4.99. When rounded to the nearest $0.10, the LEP for 2017 = $5.00. The LEP changes each year and is added to your monthly Part D plan premium for as long as you have Medicare Part D.
Return to the Medicare FAQ section to view more answers to other commonly asked questions about Medicare prescription drug coverage.