Show #343 Airing Sunday, 5/28/06
So you threw up your hands in disgust and failed to sign up for Medicare Part D before the May 15 th deadline passed. Well, you’re not alone. Millions of Americans decided to let the deadline go by without joining.
What was your excuse? Maybe the program was just too confusing. Or you already have drug coverage through some other plan. Or you’re healthy and don’t use expensive medications.
Now, if you already have coverage, or you’re healthy, you may have made the right decision. After all, if you don’t need the Part D coverage, why pay for it?
The problem is: You may need the coverage in the future. If you get sick in two or three years, or your existing coverage disappears, you could wind up paying thousands of dollars for your medications.
If that happens, you can sign up for Part D coverage in the future. But, and here’s the big but, most folks will pay a penalty. And the longer you wait to sign up, the bigger the penalty. The penalty is cruel, because it grows and grows. It’s 1% of the national average premium for every month past May 15 that you delay. So let’s take a couple of examples.
Say you sign up in November of this year, the next time you’re allowed to enroll, to start the plan in January. That’s a seven-month delay, a seven-month penalty. It means your penalty will be 7% of the average premium of $32.20. That’s $2.24 a month, or $27 for the year. That’s not so bad. But the penalty lasts forever, and the amount grows each year as the average premiums grow. After 10 years, your penalties may total $300 or more.
Now let’s say you wait three more years to sign up, until November 2009. Forty-three months late. That a 43% penalty. If the average monthly premium at that time is $50, you’ll be paying a $260 per year penalty on top of your monthly Part D premium. And again, that will be growing year after year. In 10 years, your delay may cost you $3,000 or more! Just for waiting to sign up for Part D.
So what’s my message? Just because the deadline passed, don’t just forget about Part D. Between now and November 15 th, take another look.
When you consider those steep penalties, it might be worthwhile to invest in Part D, even if you’re healthy. Check out these websites:
If you made a mistake, don’t make the mistake worse. You can still sign up in November. You may think the D in Part “D” stands for dumb. But maybe it means: “D-lay” might be “D-sastrous.”
