Part D Prescription Late Enrollment Penalty:

Enroll in a Part D plan or a Medicare Advantage plan that includes drug coverage when you’re first eligible.

If you already have “creditable coverage” (like from an employer or VA benefits), you won’t be penalized as long as that coverage is in place.

(NOTE: If you currently have a Medicare Part D Late Enrollment Penalty (LEP) and later qualify for the Low-Income Subsidy (Extra Help), the penalty will be eliminated as long as your Extra Help status remains active.)

Part B (Medical Insurance) Late Enrollment Penalty:

Sign up for Part B during your Initial Enrollment Period (around your 65th birthday) unless you have employer or union coverage.

If you delay without other qualifying coverage, your premium may go up 10% for each 12-month period you were eligible but not enrolled.

Part A Premium Penalty (for those who don’t qualify for free Part A):

Most people get Part A with no premium. If you don’t, it’s best to enroll when you’re first eligible.

Waiting can add a 10% penalty to your premium, charged for twice the number of years you delayed.

👉 The best way to avoid all penalties: Enroll on time when you’re first eligible, or make sure you have other creditable coverage and keep records of it.

The LEP is a permanent extra charge added to the monthly Part D premium if someone goes 63 days or longer without creditable drug coverage after becoming eligible for Medicare. The penalty amount increases the longer you wait, and it remains for as long as you have Part D coverage, even if you switch plans.

Examples of Creditable Prescription Drug Coverage:

➤ Employer or union health plans with prescription drug coverage that is at least as good as Medicare Part D

➤ Coverage from the Veterans Administration (VA)

➤ TRICARE or CHAMPVA military health benefits

➤ Federal Employee Health Benefits (FEHB) Program

➤ Some retiree health plans and certain government-sponsored programs

The fee is calculated by multiplying 1% of the national base beneficiary premium by the number of uncovered months, so the penalty never goes away each year as long as you keep Part D.

Estimated Penalty Example:
Suppose you waited 10 months after becoming eligible for Medicare before enrolling in Part D, and you had no creditable drug coverage during this time. The penalty would be:

10 months × 1% × $36.78 = $3.68 (rounded to $3.70)

Extra Help, also known as the Low-Income Subsidy (LIS), is a federal program that helps people with limited income and resources pay for Medicare Part D prescription drug costs, including premiums, deductibles, and copayments. If you qualify, you may pay much less for your prescriptions, sometimes as little as $0 for some drugs.

Qualifications:

Income: Up to approximately $23,475 per year for individuals or $31,725 for married couples living together.

Resources: Assets (such as savings, investments, and cash) must be below about $17,600 for individuals or $35,130 for married couples.

How to apply:

Apply directly online at the Social Security Administration: 👉Extra Help Application

You can also call Social Security at 1-800-772-1213 or apply in person at your local SSA office.

You’ll need to provide information about your income, savings, and the value of investments (your house and car do not count toward resource limits).

Medicaid is a joint federal and state program that helps cover medical costs for people with limited income and resources. In many states, Medicaid can also help with Medicare expenses, including premiums, deductibles, and coinsurance. Each state runs its own Medicaid program with its own eligibility rules.

How to apply:

Visit your state’s Medicaid office website or use healthcare.gov to find your state-specific application.

You may apply online, by phone, by mail, or in person at your local Department of Social Services office.

When applying, be prepared to provide details about your income, resources, household size, and citizenship status.

Original Medicare (Parts A & B) covers many hospital and medical services, but it does not cover everything. Common services and items not included are:

➤ Prescription drugs (you’ll need a Part D or Medicare Advantage plan for this).

➤ Routine dental care (cleanings, fillings, dentures).

➤ Vision care (eye exams, glasses, contacts).

➤ Hearing care (hearing aids and exams).

➤ Long-term care (like nursing home stays or custodial care).

➤ Routine foot care (unless related to diabetes or a medical condition).

➤ Cosmetic surgery (unless medically necessary).

➤ Foreign Travel: Except for limited emergency or urgent care in certain circumstances.

👉 That’s why many people choose to add a Medicare Advantage plan, a Medicare Supplement (Medigap), or other coverage to fill in the gaps.

Choosing between a Medicare Supplement (Medigap) plan and a Medicare Advantage plan depends on your budget, lifestyle, and healthcare needs:

Medicare Supplement (Medigap):

➤ Works with Original Medicare (Parts A & B).

➤ Helps pay out-of-pocket costs like deductibles, copays, and coinsurance.

➤ Allows you to see any doctor or hospital that accepts Medicare (nationwide coverage).

➤ Typically has a higher monthly premium, but lower costs when you use care.

➤ Does not include prescription drug coverage, (you’ll need a separate Part D plan.)

Medicare Advantage (Part C):

➤ An all-in-one alternative offered by private insurance companies.

➤ Covers everything Original Medicare does, plus often includes prescriptions, dental, vision, hearing benefits, and more.

➤ Usually has a $0 or low monthly premium, but you may pay copays as you go.

➤ Most plans use a wide provider network, which may limit doctors or hospitals you can see.

➤ Benefits and costs vary by plan and location.

Key takeaway:

➤ If you want flexibility and don’t mind paying a higher premium for fewer bills later, Medigap may be a good fit.

➤ If you prefer lower monthly costs and extra benefits, and you’re comfortable with provider networks, Medicare Advantage may work better.