Part D Options When You Don't Take Prescription Drugs

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I often get calls from beneficiaries wondering if they have to buy a Part D (drug) plan...especially, if they don’t take any medications.

While it’s not required by Medicare, there can be consequences for not buying a Part D drug plan when you’re first eligible for Medicare. Join me in this video to see what options are available if you don’t need (or want) a Medicare drug plan.

Option # -- if you don’t take any prescription drugs is to not buy a Part D plan right now, but wait until you actually need one.

Now, that seems like a common sense approach..and perfectly logical, however, there are some things to keep in mind if you choose this option.

At some point, you will probably need a part d plan, and when this happens,you can’t just buy it and have it start right away. Because, Once you’re out of your enrollment period, you have to wait until the Annual Election Period (10/15-12/7) to enroll and then wait until January 1 for the plan to start.

You may also be hit with a Medicare Part d late enrollment penalty. Now, this isn’t a one time fee. It’s a monthly add on penalty...so, just like it sounds, it’s added to your Part D premium every month for as long as you have a Part D plan.

Now, there are some individuals that are not subject to the late enrollment penalty. And, that includes anyone who is eligible for Extra Help also know as Low-Income Subsidy and anyone who had “creditable coverage”. This is drug coverage through your job, spouse’s job, retiree coverage or VA...and, what’s important is that your current coverage is as good or better than Medicare’s...this is the only way it’s considered Creditable Coverage.

Now, keep in mind that you can’t just tell Medicare you had creditable coverage….you actually have to have proof...and it must be submitted to the Part D company within 30 days of their request.

Let's say you don’t fall into these two categories and you decided not to get a Part D plan when you were first eligible, so you know a penalty is coming your way. And for example sake, Let’s also say that you went 40 months without coverage and now you’re signing up for a Part D plan.

Your penalty is calculated by multiplying 1% of the “national base beneficiary premium” which just means it takes all the Part D premiums and comes up with the average...(so, in 2017 the average Part D premium is $35.63). So, 1% of 35.63 is .36 multiplied by the 40 months you went without coverage. Your Part D penalty is $14.40. Remember, this is a monthly add on penalty to your Part D premium and it will stay with you for as long as you have a Part D plan.

And, it’s important to note that Medicare recalculates this penalty every year with the new base beneficiary premium. And as it increases, so will your Part D penalty.

The second option is to buy a Part D plan when you're first eligible. Since you don't take any medications, it’s not necessary to pay a high premium for a plan. The point is just to have a plan in place to avoid a penalty when you do decide to buy a plan.

Now, with that said, Part D plans are not a one size fits all. Some Part D plans cover certain drugs better than others. So, if your doctor has mentioned the possibility of you taking a particular medication in the near future, you might want to take that into consideration when choosing a plan. But, for most people a low premium plan is the best option. And, in this video I'll provide the steps you need to find the lowest monthly premium Medicare Part D plan.