Don’t fall into the Medicare enrollment trap 

I spend most of my days researching, studying, writing and talking about Medicare. And I’m here to spill some beans.   

The fall Medicare Open Enrollment Period, also called the Annual Enrollment Period or AEP, lasts from Oct. 15 to Dec. 7 each year. During open enrollment, the 65.7 million people who are enrolled in Medicare — or a staggering 20 percent of the U.S. population — can make changes to their coverage effective for the 2024 plan year, including changes to their Medicare prescription drug coverage.  

Quick primer: Original Medicare (Medicare Part A and Part B) is the publicly funded portion of Medicare and does not provide any coverage of the prescription medications you fill at a pharmacy and take yourself. This type of Medicare drug coverage is available through a Medicare Part D plan or a Medicare Advantage (Part C) plan that includes prescription drug benefits.  

Now about those beans. 

Medicare rules can snag unwitting beneficiaries, especially the late-enrollment penalty concerning Medicare drug coverage.  

If you’re eligible for Medicare and don’t have creditable drug coverage, which means drug coverage that is at least as good as Medicare drug coverage, you will be hit with a 1 percent late enrollment penalty for every month you were eligible for Medicare drug coverage but didn’t enroll. 

10 months without creditable drug coverage? You could be hit with a 10 percent increase on your Medicare drug plan premiums if you do eventually sign up for a Medicare drug plan. And you’ll continue to pay that 10 percent penalty every single month, every single year that you have Medicare drug coverage.  

Here’s how people fall into the trap: They aren’t taking any prescription medications at the time they become eligible for Medicare, so they don’t bother to enroll in drug coverage. Three years go by, and suddenly they’re prescribed some medication — and a 36 percent increase in their premiums along with it, if they didn’t have other creditable drug coverage during that time. 

And that’s why some people fall into the trap: They just don’t know. 

A recent Medicare literacy study found that 80 percent of beneficiaries were unaware of this late enrollment penalty for Medicare prescription drug coverage. A 2020 House bill that was signed into law initially contained mandated communications from the government about late enrollment penalties to incoming Medicare beneficiaries. But that provision was scrapped from the final version of the bill. 

Nearly 9 out of 10 U.S. adults ages 65 and over take at least one prescription medication. But 22 percent of Medicare beneficiaries, or more than 14 million seniors, are not enrolled in drug coverage and potentially face the late enrollment penalty.  

If you’re on Medicare, you can consider enrolling in drug coverage through a standalone Medicare Part D plan or a Medicare Advantage plan that includes Part D benefits during the 2023 fall Medicare open enrollment period. You may not be taking any prescriptions now, but chances are you will in the future. 

At the very least, have a conversation with a licensed insurance agent or a representative from your State Health Insurance Assistance Program (SHIP) about Medicare drug coverage and the late enrollment penalty.  

Because awareness is the only prescription you can’t afford to go without.  

Christian Worstell is a licensed insurance agent and a senior Medicare and health insurance writer with HelpAdvisor.com.