Don't skip drug coverage: the Part D late penalty

Prescription coverage through Medicare is called a drug plan (Part D). If you do not sign up when first allowed and do not have other qualifying drug coverage, Medicare can add a late penalty to your monthly cost later. Qualifying coverage means it is expected to pay at least as much as Medicare drug coverage. The official term is creditable drug coverage.

The penalty applies if you go 63 or more days in a row without a drug plan (Part D) or other qualifying coverage after your sign-up time ends. A gap of less than 63 days does not trigger it. A longer gap does, even if you do not take any prescriptions.

The penalty grows with each full month you went without qualifying coverage. It is added to your monthly drug-plan cost for as long as you have Part D, usually for life. A long gap now can mean an extra amount to pay each month for years.

Have drug coverage when your time to sign up ends. This can be a drug plan (Part D) or other coverage that your insurance plan confirms qualifies. If you receive a letter asking whether you had coverage, answer it. That is your chance to show why you should not have to pay the penalty.