ArcaMax

Hello Toni:

When I turned 65 in May 2024, I continued to work full-time with a health savings account (HSA) as my employer benefits and use GoodRX to cover prescriptions. My employer’s human resources manager advised me to enroll in Medicare Part A when I turned 65, which was not correct information because I could not fund my HSA from the time I enrolled in Medicare Part A. When I retire at 70 is when I will enroll in Medicare Part B.

Now I am experiencing a Medicare issue and need guidance, Toni. In July, I applied on medicare.gov for a Medicare Part D plan to begin Aug. 1 because I am now taking an expensive blood pressure prescription that GoodRX does not cover and costs over $650 a month out of pocket.

I just received a notice from Medicare saying they do not have a record of me having prescription drug coverage that “met Medicare’s minimum standards” from 5/1/2024 to 7/31/2025, and I will receive a Part D late enrollment penalty. What does this mean?

Thank you in advance,

Don from Charlotte, N. C.

Don:

I do not have good news for you. You have a Medicare Part D prescription drug penalty problem because you did not enroll in a Medicare Part D plan at the right time, when your Part A began, May 1, 2024. Unfortunately, prescription discount programs such as GoodRx, Single Care, AmazonRX or store prescription memberships such as Walmart, Kroger, etc., are not considered “creditable” coverage, which is why you will be receiving Medicare’s late enrollment penalty (LEP).

The Medicare & You handbook states: “Creditable prescription drug coverage could include drug coverage from a current or former employer or union, TRICARE, Indian Health Service, the Department of Veterans Affairs, or individual health insurance coverage.” If you go 63 days or more in a row without Medicare drug coverage or other creditable prescription drug coverage, you may have to pay a penalty if you sign up for Medicare drug coverage later.

So, Americans with “creditable” coverage can apply for a Medicare Part D plan at a later date without paying a penalty. (Chapter 5 of the Medicare Survival Guide Advanced edition explains Medicare Part D and how to avoid Part D penalties).

The late enrollment penalty when applying for Medicare Part D can be applied if:

—You are older than 65, retiring and leaving employer benefits and waited more than 63 days without creditable prescription drug coverage to enroll in Part D. (Filing Medicare forms with Social Security does not inform Medicare that you had creditable prescription drug coverage. Do not wait to enroll in a Part D plan.)

—Your prescription drug benefit is not creditable as Medicare defines it.

—You never enrolled in Medicare Part D when first eligible for Medicare.

Medicare calculates the Part D penalty by multiplying 1% of the "national base beneficiary premium" ($36.78 in 2025) by the number of full uncovered months you didn't have either Part D or creditable coverage and rounding to the nearest 10 cents. That amount is added to your monthly Part D premium.

Your late enrollment period does not begin from the day you lose or leave your company health plan, but from the month your Medicare Part A started. So, Don, your 14 months without creditable coverage will cost you an extra $5.15 per month plus the Part D premium for 2025. The national base amount can change each year, so your penalty will change but it will never go away.

Remember, with Medicare, what you don’t know WILL hurt you! Please enroll in Medicare Part D whether you are taking prescriptions or not.

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Toni King is an author and columnist on Medicare, Social Security and long-term care issues. She has spent nearly 30 years as a top sales leader in the field. If you have a Medicare question, email info@tonisays.com or call 832-519-8664. Sign up for the Toni Says newsletter at www.tonisays.com to keep up to date on Medicare changes.

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Copyright 2025 Toni King, Distributed by Counterpoint Media