Part D Penalty Question

[Winter_123]

My understanding is that the penalty for late enrollment is based on the average annual part d premium .

Does anyone know what the average premium is or what the most recent figure is? Just looking for a general sizing here.

Thanks

 

[G.Gordon]

$31.98

I round up to 32 cents per month for those enrolling this year. Never had a drug plan, been on medicare before 1/1/2006... you've got from 6/1/2006 to 12/09 or 42 months of penalty = $13.44

 

[Winter_123]

$31.98

I round up to 32 cents per month for those enrolling this year. Never had a drug plan, been on medicare before 1/1/2006... you've got from 6/1/2006 to 12/09 or 42 months of penalty = $13.44

Very good. Thank you.
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$31.98

I round up to 32 cents per month for those enrolling this year. Never had a drug plan, been on medicare before 1/1/2006... you've got from 6/1/2006 to 12/09 or 42 months of penalty = $13.44

How does this penalty actually accrue to the customer?

Example: Client enrolls with say an AARP/UHC plan for 32.00 a month and checks off that they want it deducted from their social security.

How does the nitty gritty of the billing look there. Does their social security statement just show a payment for the regular part D premium and then a separate line for penalty or what? Or does it just show a jacked up premium to cover the penalty but the feds only transfer the regular premium amount over to the carrier?

How does that work. Or to ask it another way, when a client wants to see what they are paying for a penaly where do they look?

 

[DS4]

I don't think the cost of the penalty is broke down anywhere.
A word of caution. If someone has never had "Creditable Coverage" since 1.01.06., and, they enroll in a drug card 1.01.10, it takes Medicare many months to notify the Part D insurer to charge the penalty. For the first several months of the year, the Part D carrier will only charge the non penalty premium. Once Medicare wakes up and smells the coffee, the Part D carrier then advises the insured of the penalty. You as the agent then get an angry telephone call from the insured because they have forgotten about the penalty you discussed with them many months earlier. As me how I know.

 

[jdeasy]

I don't think the cost of the penalty is broke down anywhere.
A word of caution. If someone has never had "Creditable Coverage" since 1.01.06., and, they enroll in a drug card 1.01.10, it takes Medicare many months to notify the Part D insurer to charge the penalty. For the first several months of the year, the Part D carrier will only charge the non penalty premium. Once Medicare wakes up and smells the coffee, the Part D carrier then advises the insured of the penalty. You as the agent then get an angry telephone call from the insured because they have forgotten about the penalty you discussed with them many months earlier. As me how I know.

I'm sure that happens. I have a couple of clients that have never been charged the part D penalty that I told them about. One is almost 2 years into his. He never had a PDP of any kind until 1-1-08. He is 73 years old and has had A&B since he was 65. I told him about the penalty. He has been with 3 differnet companies since and not one has charged the penalty. I expect that one day he will get a notice of monies owed. I've discussed that with him as well. He says we will cross that bridge when we get to it. He is not a veteran, he never had RX thru an employer. I don't know how to explain it. It's just one of those CMS thangs.

 

[Russ]

I don't think the cost of the penalty is broke down anywhere.
A word of caution. If someone has never had "Creditable Coverage" since 1.01.06., and, they enroll in a drug card 1.01.10, it takes Medicare many months to notify the Part D insurer to charge the penalty. For the first several months of the year, the Part D carrier will only charge the non penalty premium. Once Medicare wakes up and smells the coffee, the Part D carrier then advises the insured of the penalty. You as the agent then get an angry telephone call from the insured because they have forgotten about the penalty you discussed with them many months earlier. As me how I know.

Assuming they never purchased a PDP plan, I don't think the penalty actually started adding up until after June of 2006 effective dates. They had until, I believe, May 15th of 2006, to purchase a plan.

I'm starting to jump into the....I'm not fooling with PDP's anymore...camp. It's not for the companies going up on the premiums, but being able to add deductibles and increasing co-pays to the plans EVERY year.

Unlike med-supps that don't decrease benefits, but can have rate increases, PDP's have gone up in premiums and decreased coverage almost every year since they started.

The plans need to be standardized...like med-supps. Now...you have all of the companies with different co-pays...or co-insurances...some with deductibles...some without. And if it's the best plan this year, it may be the worst next year. And they all have the dreaded donut hole.

Throw in the chump-change commission and the CMS rules and it's almost better to stay away from the market.

 

[G.Gordon]

Very good. Thank you.
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How does this penalty actually accrue to the customer?

Example: Client enrolls with say an AARP/UHC plan for 32.00 a month and checks off that they want it deducted from their social security.

How does the nitty gritty of the billing look there. Does their social security statement just show a payment for the regular part D premium and then a separate line for penalty or what? Or does it just show a jacked up premium to cover the penalty but the feds only transfer the regular premium amount over to the carrier?

How does that work. Or to ask it another way, when a client wants to see what they are paying for a penaly where do they look?

They will get a bill for the penalty from 1/1/2010 to "what ever month medicare catches it"... say 7/1/2010. With that bill from the PDP it will indicate that their new premium being held out of the SS check will be $xx.xx. If they are paying directly they will have a new coupon book in the mail.

 

[DS4]

Assuming they never purchased a PDP plan, I don't think the penalty actually started adding up until after June of 2006 effective dates. They had until, I believe, May 15th of 2006, to purchase a plan.

That is correct! I had the wrong date.
Thanks.

 

[Slade]

Is the initial dollar amount of the penalty fixed for life or will the penalty increase along with an increase of the average PDP premium over the insured's lifetime?

 

[jdeasy]

Is the initial dollar amount of the penalty fixed for life or will the penalty increase along with an increase of the average PDP premium over the insured's lifetime?

It stays the same.