Medicare calculates the Part D penalty by multiplying 1% of the “national base beneficiary premium” (which is $33.19 in 2019) times the number of full, uncovered months you didn’t have Part D or creditable coverage (another drug plan that has at least the benefits offered by Part D). The national base beneficiary premium may increase each year, so the amount of your penalty may also increase each year.
The Part D penalty is permanent unless you qualify for Extra Help. The penalty is added to your monthly base premium for your prescription drug or Medicare Advantage plan.
Avoid the Part D penalty by making sure you have a Stand-Alone Part D drug plan, or a Medicare Advantage plan with prescription drug coverage, or another plan, such as an employee medical plan or an employee retirement plan that includes creditable prescription drug coverage, in force from the month when you reach age 65.
- All 2019 Medicare Advantage plans in Contra Costa County have creditable prescription drug coverage.
- All 2019 Stand-Alone Prescription Drug Plans in Contra Costa County provide creditable coverage.
- Veteran’s Administration prescription drug coverage is creditable.
- Employer, Union, Retiree and COBRA plans may or may not have creditable coverage for prescription drugs. Check with your plan or your HR department.
- Drug store prescription discount cards are not creditable coverage.
You can meet with a HICAP counselor to review your current prescription drug coverage and help you determine if it is creditable coverage and what steps you can take.