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Ask Esther your Medicare questions.

Ask Esther your Medicare questions.Q: I recently switched from my employer group plan to a Medicare plan with prescription coverage. I received a letter from the insurance company notifying me that I owed a part D penalty. Why do I get the penalty, and what should I do?

A: If you receive a letter indicating that you have a Medicare Part D enrollment penalty, it typically means that you didn’t sign up for Medicare Part D when you were first eligible, or you went without creditable prescription drug coverage for 63 days or more. For more info, visit about Part D Penalty.

However, in this case, I see that you have had employer coverage since you turned 65, and your prescription coverage was creditable at that time, and there was no gap in coverage. This simply tells us that the insurance company doesn’t have that information, and you need to submit a response explaining that you had prescription coverage before you switched to Medicare. Therefore, the penalty should be waived.

Here’s what you can do:

  1. Review the Letter: Carefully read the letter to understand the specifics of the penalty, including the amount and the effective dates.
  2. Normally, the penalty reconsideration request form is also included in the letter. Fill out this form with your basic information such as name and member ID#. Then select the option that says you have an employer coverage/creditable coverage and that’s why the penalty should be waived. Enter the start and end date of the plan, including the type of coverage.
  3. Mail it to the address instructed in the form as soon as possible, usually within 60 days from the date on the letter. It’s a good idea to record the mailing date and keep a copy of the form you sent for future needs.

This should take care of the penalty. The key here is to explain that you have creditable coverage during the time they deem that you don’t have coverage and to submit your response within the time limit. If they don’t receive your response within the time limit, they may deny your request, and it’ll be much harder to submit another request in the future.

If you indeed had a gap in prescription coverage in the past for 63 days or more, you need to pay the penalty. But if you have Extra Help financial assistance, it will help you pay your penalty.


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Ask Esther is a column where we share some real situations our clients face in their Medicare journey. For privacy, we don’t disclose the client’s real name and other personal information. The answer provided here is for general guidelines only because every case may be different and should be approached uniquely based on the client’s needs and situation. If you have any questions about Medicare, feel free to contact us or schedule an appointment.

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