Medicare drug plan late enrollment penalties

Edna – Ohio: My mother is 84 years old and has never had a Medicare D drug plan. How much of a penalty will she have if she starts one this next year?

Phil Moeller: Wow! This penalty is the largest I’ve heard about. Medicare charges late-enrollment penalties to discourage healthy people aged 65 or older from simply not paying for Medicare until they think they need it.

It’s applied to the national average monthly premium for a Part D plan, which is about $30 a month. The penalty is 1 percent a month for each month she is late. If she is 19 years late, this would be 228 months late! By my rough math, her penalty would be nearly $70 a month and would be added to whatever premium she winds up paying for the Part D plan she selects. This is certainly a big percentage penalty but might be a bargain depending on the cost of her medications.