PRESCRIPTION FOR SAVINGS

Joining Medicare drug plan now may avoid penalties later

It’s an idea that’s easy to swallow.

When considering a Medicare plan, experts say individuals should think hard about opting into a prescription drug plan — known as Part D — even if they aren’t currently taking pills on a regular basis.

The reason: Late enrollment penalties that can accrue over time if you suddenly need prescription coverage that will make you wish you signed up for it in the first place.

“The penalty can add up, so it is definitely in a person’s interest to avoid it,” said Jonathan Oberlander, a professor of social medicine and health policy and management at University of North Carolina-Chapel Hill and author of the “The Political Life of Medicare.”

The rules regarding the late enrollment penalty are complicated: You pay 1% of the national average Part D premium in any given year, multiplied by the number of months you’ve been without drug coverage since enrolling in the Standard Medicare plan, known as Part A and Part B.

For example, if the national average is $40 a month, and you had gone 10 years without coverage, you would more than double your premium for prescriptions — possibly for the rest of your time on Medicare.

Here’s how it works: Your penalty would be 120 (10 years) times 40 cents (1% of $40), adding $48 every month to your regular Part D premiums for that year. You would then continue to pay penalties every year that you remain in the program. If the national average premium goes up or down in any given year, the amount of your penalty will change accordingly.

The simplest way to avoid those fees is to sign up for Part D from the outset, or to subscribe to an allinclusive Part C plan, also known as a Medicare Advantage plan.

Medicare is available to individuals 65 and up, and the open enrollment period for 2022 begins on Oct. 15 and runs through Dec. 7.

Participants in Medicare plans should have already received their Annual Notice of Change letter, which breaks down adjustments to their plan that could affect their coverage and how much they pay. Now is the time to study that document to see if those changes warrant a switch from one provider to another.

And it’s also a good time to strongly consider a prescription drug plan even if you don’t require a prescription right now, as it could ultimately save you money in the long run.

To make changes to your plan, go online to Medicare.gov or speak to a representative by calling (800) 633-4227.