Medicare drug plan late enrollment penalties

Edna – Ohio: My mother is 84 years old and has never had a Medicare D drug plan. How much of a penalty will she have if she starts one this next year?

Phil Moeller: Wow! This penalty is the largest I’ve heard about. Medicare charges late-enrollment penalties to discourage healthy people aged 65 or older from simply not paying for Medicare until they think they need it.

It’s applied to the national average monthly premium for a Part D plan, which is about $30 a month. The penalty is 1 percent a month for each month she is late. If she is 19 years late, this would be 228 months late! By my rough math, her penalty would be nearly $70 a month and would be added to whatever premium she winds up paying for the Part D plan she selects. This is certainly a big percentage penalty but might be a bargain depending on the cost of her medications.

Malcolm – Cal.: I’m 79 and have Medicare Parts A and B and a Medicare supplement policy. I’ve never had a Part D drug plan. Is there a way to get Plan D without the huge penalty?

Phil Moeller: If you have a very low income, you might be able to qualify for Medicare’s Extra Help program to assist you with your drug expenses. In some cases, this assistance includes waiving Part D penalties. Otherwise, it will be difficult to avoid a big late-enrollment penalty, which could add 12 percent a year to your premium for each year you failed to enroll. I suggest you speak to a SHIP counselor at 1-800-434-0222 and see if there are any options for California residents that might help you out.