Medicare’s Sneaky Equation

This is a question we get quite frequently:

“If I don’t take any prescriptions, why do I need to sign up for Part D?”

In a perfect world, there would be no need for Rx coverage if you didn’t need an Rx!

In the world of Medicare though, delaying Part D can cost you.

Remember how you can be penalized for delaying Part B?  You can be penalized for delaying Part D too!

Medicare has a sneaky little equation they like to use when deciding how much to penalize you:

1% for every month you delay Part D x the national average of a Part D plan = your penalty.

Let’s do the math.

Let’s say you delay enrolling in Part D for 3 years:

3 years = 36 months
36% x $59.00 (the national average in 2024) = $21.24 / month penalty

The sad news?  This penalty never goes away!

You would be stuck paying an extra $21.24 every month for the rest of your life.

The good news?  Even if you currently don’t take any prescriptions, you can avoid this penalty by enrolling in the cheapest Part D plan available.  Some only cost $10 a month.

By having some form of drug coverage in place, you are also protecting yourself.  Let’s say you get prescribed something temporarily, or worst-case scenario, a costly cancer-related drug.  Without coverage, you would be on the hook for the full cost of these prescriptions.  That’s a lot of financial exposure!

As my dad has said, “I cannot stress enough that the downside of waiting to enroll [in a Part D plan] is far too costly.  Buying even the lowest priced plan now, when you sign up for Medicare, preserves your participation in Part D benefits without penalties later.” (from The Nuts and Bolts of Medicare)

Do yourself (and your pocketbook!) a favor: enroll in a Part D plan when you enroll in Medicare A and B!

Posted in Medicare.

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