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What Is Creditable Drug Coverage?

What is Creditable Drug Coverage?

Medicare late enrollment penalties can sneak up on you if you don’t know the rules.

The late enrollment penalty for Medicare Part D prescription drug coverage is an additional 1% of the premium amount for each month you’re late. You pay the penalty for as long as you have Part D.

Now here’s the good news: you can avoid paying the Part D penalty when enrolling late if you can prove that you had creditable drug coverage within the previous 63 days.

Medicare defines “creditable” drug coverage as coverage that is at least as good as what Medicare Part D plans are required to provide. Insurance companies must deliver a notification of creditable coverage to plan members each year, usually in the fall.

Many group employer, union, and retiree health plans provide creditable coverage. So if you’re transitioning from this type of plan to Medicare, you may qualify for a Special Enrollment Period (SEP). If you do, then you can enroll in a Medicare Part D plan without penalty. Medicare may ask to see a creditable coverage notification from your previous plan when you enroll. The plan can provide one if you don’t have a copy in your files.

Don’t let Medicare enrollment catch you by surprise. You may enroll when you turn 65 or possibly delay enrollment until later. Either way, you can call the shots better when you know the rules.

For more information, call us at 941-405-3900.

This Post Has One Comment
  1. […] Similar to Medicare Part A and Part B, if you do not enroll in a Medicare Part D (prescription drug coverage) plan when you are first eligible you will be required to pay a late penalty when you join.  Typically, you are considered late if you go a continuous period of 63 days or more after your initial enrollment period without creditable prescription drug coverage. […]

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