The new Medicare Part D prescription drug benefit is optional, but there are strong incentives for Medicare patients to enroll in this program. Some people with Medicare may be subjected to a late enrollment penalty if they do not sign up for Part D when first eligible. Here’s when your Medicare patients will be subjected to this penalty in 2006:
For patients who are eligible for Medicare before January 2006 - if they do not sign up for Part D by May 15, 2006, they will have to pay a higher premium
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For patients who are eligible for Medicare after January 2006 - if they do not sign up for Part D for 63 days or longer after the end of their initial enrollment period, they will have to pay a higher premium.
If your patients do not sign up for Medicare Part D, the premium will increase at least 1 percent of the base premium (just announced at $32.20 for 2006) per month for every month that they waited to enroll. In 2006, this rate will be $0.32 per month. So, if your patient delays enrolling for seven months, then the increase in premium is 7 times $0.32 or $2.24 per month on top of their base premium. The individual will have to pay this higher premium for their entire lifetime. This percentage may increase each year.
It is important that your Medicare patients know that they do not have to pay this late enrollment penalty if they are currently receiving retiree coverage at least as good as Medicare Part D (also known as creditable coverage). Your patients should be receiving notification from their retiree benefits coordinator this fall to indicate whether their current coverage is creditable. If they do not receive or cannot find this notice, Medicare patients should call their retiree benefits coordinator to make this determination.