Q: Mr. H in Chattanooga asks: "What are the constraints and fiscal penalties for not signing up for prescription coverage [or signing up in a succeeding year, or years later] when you start the mandatory Part A coverage?"
A: Thank you Mr. H for this important question regarding the complexities associated with Medicare prescription coverage, also known as Medicare Part D.
To help simplify the matter, we will separate our reply into sections covering enrollment, penalties, exceptions and appeal rights for the program.
• Enrollment periods. You are eligible for Medicare on the first day of the month in which you turn 65. For example, if your birthday is Feb. 24, you become eligible for Medicare on Feb. 1. Your initial Part D enrollment window is Nov. 1 [three months before your birthday] through April 30 [three months after your birthday].
Except for that initial enrollment period, the only time you can join a Part D prescription drug plan is during the Open Enrollment Period from Nov. 15 to Dec. 31 each year.
For people who receive Medicare because of disability, the initial enrollment window begins three months before and extends three months after your 25th monthly cash disability payment -- or after you have been on disability for two years.
• The penalty. If you miss your first enrollment deadline, you will pay an additional 1 percent per month for every month you wait before enrolling.
For example, if the deadline for enrolling is April 30, and you do not sign up for a Part D prescription drug plan until November, you will pay a six-month penalty or 6 percent extra on your monthly premium.
If that premium were normally $30 a month, you would pay $31.80 a month -- for the rest of your life. In addition to the money penalty, you will not be able to get coverage until the annual Open Enrollment Period, so if you miss an April 30 deadline, you would be unable to have Part D drug coverage until Jan. 1 of the following year.
Note: If you qualify for Extra Help through Social Security, you will not be subject to the penalty.
• Penalty exception. If you already have prescription drug coverage -- a current or former employer's plan, a union plan, and military retirees or veterans benefits are all good examples -- when you become eligible for Medicare, you can choose to stay in that plan without risking a penalty as long as the drug program is considered "creditable coverage."
The administrator of the plan is required to provide you with written notice each year certifying that the plan is creditable. If you lose your creditable prescription drug coverage through no fault of your own, you have 63 days to sign up for Part D coverage without penalty. Alternatively, you can choose to switch from a creditable program to Part D coverage without penalty during the Open Enrollment Period at the end of each year.
• Appeal. You will be notified of a late enrollment penalty [LEP] by mail if your Medicare drug plan determines that you had a continuous period of 63 days or more without creditable drug coverage [coverage that met Medicare's minimum standards].
When you receive the notification, you should also receive an LEP reconsideration notice and a reconsideration request form. The reconsideration notice provides you with an explanation of your right to ask Medicare to have an independent review entity reconsider your LEP.
Note: You have 60 calendar days from the date listed on the LEP letter to request reconsideration.
Once the independent review entity receives your request, he will review your case. The reviewer may request a copy of your case file from your Medicare drug plan to help with the decision. The reviewer then will notify you and your Medicare drug plan of the final reconsideration decision. The final reconsideration decision cannot be appealed.
Submit questions to local Social Security Director Martin Coffey by writing to Business Editor Dave Flessner, Chattanooga Times Free Press, P.O. Box 1447, Chattanooga, TN 37401-1447, or by emailing him at dflessner@timesfreepress.com.