Part D Penalty Question

Oct 7, 2015

  1. SirLurkAlot
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    A potential client called me about getting Part D. They are 79 y.o. and have been on medicare since age 65 but never had Part D or creditable coverage. From what month and year do I begin to calculate the number of months for the 1% penalty? Is it January 2006, June 2006 or other? I seem to remember they extended enrollment the first year.
     
  2. TwoCents
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    Without charging you a research fee, the answer appears to be 5/15/2006.

    Supporting info:
    Chapter 3 of the Medicare Prescription Drug Benefit Manual
    At the beginning of the Part D program, there was an IEP for Part D for all current Medicare beneficiaries and individuals who became eligible for Medicare in January 2006 that began on November 15, 2005 and ended May 15, 2006.

    Chapter 4:
    10.1 - Determine the Period in Question
    The Part D plan sponsor shall determine, at the time of enrollment, whether a beneficiary who enrolls in Medicare drug plan will have or had a break in creditable prescription drug coverage for a continuous period of 63 days or more anytime after they were first eligible to enroll in a Medicare prescription drug plan. The Part D plan sponsor shall first determine the appropriate period in question: (1) following Part D/Retiree Drug Subsidy (RDS) disenrollment as described below; (2) the end of the Part D Initial Enrollment Period (IEP); or (3) end of the subsequent IEP.

    10.1.2 - End of the Part D Initial Enrollment Period
    For individuals who did not have prior Part D plan or RDS enrollment and are not in their subsequent IEP, the period in question begins on the day following the beneficiary’s Part D IEP and ends on the day before the beneficiary’s enrollment becomes effective with the Part D plan sponsor.
    Unless otherwise informed by CMS, a Part D plan sponsor shall assume that the last day of a beneficiary’s IEP is/was:
     May 15, 2006 for a beneficiary who was eligible for Medicare Part D in January 2006.
     
  3. TN_agent
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    I would not attempt to calculate it exactly yourself, I would just give a ballpark number.
     
  4. DS4
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    here ya go.........this is my own calculation sheet
     

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    DS4, Oct 7, 2015
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  5. SirLurkAlot
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    SirLurkAlot Expert

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    Thanks for responses! Plan on ball-parking but wanted to ballpark as close as possible. I had thought June 1 but researched and didn't find exact answer. May 15 would be odd given the first of month effectives but this is Part D and their is no shortage of screwed up rules\guidelines.

    ----------

    Wow! Thanks DS4!
     
  6. Justin Bilyj
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    Looking at this, how would this calculate the monthly penalty amount? I'm a little confused. If someone didn't have credible drug coverage for 14 years, what would the monthly penalty be? Gonna have to create my own excel calculator..
     
  7. plannerman
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    I saw a figure of .33 per month for the 2015 arp enrollees
     
  8. Justin Bilyj
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    Per month, so if this person didn't have drug coverage for 14 years what's their penalty amount they paying per month for a pdp? $55 plus the monthly premium?

    Found this calculator, was off by a couple of dollars..
     
  9. Bob_The_Insurance_Guy
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    My suggestion would be to call a PDP provider, like Humana or UHC and have them ballpark it for you.
     
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