Medicare Part D provides prescription drug coverage for Medicare beneficiaries. It is an optional program that you can choose to enroll in when you become eligible for Medicare. However, you may decide to defer or delay enrollment in Medicare Part D for various reasons. This article will explore whether you can defer Medicare Part D, reasons to defer, how to defer, and what happens if you enroll late.
What is Medicare Part D?
Medicare Part D is the prescription drug coverage component of Medicare. It helps pay for prescription medications for people with Medicare. Part D plans are offered by private insurance companies that have been approved by Medicare.
Part D helps cover the costs of both brand-name and generic prescription drugs. It also offers negotiated discounts on drugs. This can help lower your prescription costs.
Who is Eligible for Medicare Part D?
You are eligible to enroll in a Medicare Part D plan if:
- You are enrolled in Medicare Part A and/or Part B
- You live in the plan’s service area
- You are a U.S. citizen or legal resident
Anyone who has Medicare can sign up for Part D during their initial enrollment period when they first become eligible for Medicare. You can also enroll, disenroll, or switch plans during the annual open enrollment period from October 15 to December 7 each year.
When Can You Enroll in Medicare Part D?
There are several enrollment periods for Medicare Part D:
Initial Enrollment Period: This is the 7-month period that starts 3 months before you turn 65, includes the month you turn 65, and ends 3 months after you turn 65.
Annual Open Enrollment Period: From October 15 to December 7 each year, you can enroll in a plan, switch plans, or drop Part D coverage. It starts in the year you first enroll in Medicare.
Special Enrollment Period: You can sign up outside the standard periods if you meet certain criteria, like losing other drug coverage.
Can You Defer or Delay Medicare Part D Enrollment?
Yes, you can defer or delay enrollment in Medicare Part D. Medicare Part D enrollment is optional. This means you can decide not to enroll when you are first eligible.
However, there are some important things to know about deferring Medicare Part D:
If you don’t enroll when you’re first eligible and don’t have other creditable drug coverage, you may have to pay a late enrollment penalty if you enroll later.
You can only enroll in Part D during the enrollment periods. Unless you qualify for a Special Enrollment Period, you can’t just enroll at any time.
It’s recommended to enroll in Part D when first eligible, even if you don’t take prescription medications right now. This prevents paying a penalty later if you need medications down the road.
Reasons to Defer Medicare Part D
There are a few reasons why someone may choose to defer or delay enrollment in a Medicare Part D plan:
You Have Other Creditable Prescription Drug Coverage
You may already have prescription drug coverage through another plan like an employer, union, TRICARE, VA benefits, or individual health plan. As long as this coverage is considered “creditable” by Medicare, you can defer Part D without penalty.
You Want to Avoid Premiums
Part D plans charge a monthly premium, so deferring would let you avoid another bill each month. However, it likely makes sense to pay the premium because the coverage could save you money on medications in the long-run.
You Don’t Currently Take Medications
If you aren’t taking any prescriptions right now, you may think Part D won’t benefit you. But again, it’s wise to enroll right away to avoid future penalties.
You Missed Your Initial Enrollment Period
If you didn’t enroll in Part D within your first eligible enrollment period, you can only enroll during the annual open enrollment or special enrollment periods.
How to Defer Medicare Part D
Deferring enrollment in Medicare Part D is easy – you simply don’t sign up for a plan during your initial enrollment period. To defer, don’t submit an application when you first become eligible.
However, it’s important to understand the implications if you do enroll late. You will likely pay a permanent late enrollment penalty unless you had creditable coverage in the interim.
Here are some key points about deferring Medicare Part D:
You don’t have to notify Medicare if you are deferring. Just don’t submit an application.
Make sure you don’t go 63 days or more without creditable prescription drug coverage.
Keep records of any creditable coverage you have to avoid penalties when you do enroll.
Only enroll during your eligible enrollment periods – you can’t enroll at anytime.
Enroll within 8 months of losing other creditable coverage to avoid the penalty.
What Happens if You Enroll Late?
In most cases, if you don’t enroll in a Medicare Part D plan when you’re first eligible and don’t maintain creditable prescription drug coverage, you’ll be subject to a late enrollment penalty if you sign up down the road. Here’s how it works:
You’ll owe a penalty for every month you delayed enrollment without other coverage.
The penalty is calculated as 1% of the national average premium for each uncovered month.
This penalty amount gets added to your monthly Part D premium permanently (or for as long as you have Part D coverage).
Your late enrollment penalty won’t decrease over time. The monthly penalty you pay may even increase annually.
So in the majority of cases, it really pays to enroll in Medicare Part D when you’re first eligible. The savings you get from drug coverage will likely outweigh the premium costs. And you’ll avoid paying expensive late enrollment penalties for the rest of your Medicare coverage.
Medicare Part D is optional prescription drug coverage you can enroll in when eligible for Medicare.
You can defer or delay enrollment in Part D, but penalties may apply if you enroll late without creditable drug coverage.
It’s wise for most people to enroll in Part D as soon as they are eligible to avoid lifetime late enrollment penalties.
To defer, simply don’t submit an application during your initial enrollment period.
Make sure you don’t go 63+ days without other creditable prescription coverage.
If you defer, enroll in Part D within 8 months if you lose your other drug coverage.
Overall, you can defer enrollment in Medicare Part D if you want to. But be aware of the late enrollment penalties that will result if you don’t maintain creditable drug coverage in the interim. For most Medicare beneficiaries, it is advisable to enroll in Part D when first eligible to gain prescription coverage and avoid potential penalties.
How to Delay Medicare Without Penalties [& Stay On Your Employer Plan]
Can I delay enrolling in Medicare Part D?
What happens if you opt out of Medicare Part D?
Is Medicare Part D mandatory?
Can you change Medicare Part D anytime of the year?