New Medicare Rule: Depending on your employer’s health insurance instead of Medicare after age 65? Use this.
Because they have health insurance through their job, some people who wait to sign up for Medicare may have problems when the Inflation Reduction Act improves Medicare’s coverage of prescription drugs.
The issue is about fines given to people who sign up for Medicare after their initial eligibility dates.
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If you work at a job that offers health insurance after age 65 and meet certain standards, you can put off signing up for Medicare without being penalized. Plans that cover prescription drugs have to pay about the same amount as standard Medicare plans that cover prescription drugs.
Some workplace plans that were “creditable” because their benefits were at least as good as Part D’s before the changes may not be eligible anymore after January 1. This is because Part D will be changing. As of January 1, the most that can be paid out of pocket each year under Part D is $2,000, for example.
According to Kiplinger, if the yearly premium cap is not set at $2,000 or less, private plans might not be good enough to stand in for Part D and let beneficiaries put off signing up without being penalized.
If, at any point after your initial enrollment period, you go for 63 days or more without having Medicare drug coverage or other creditable prescription drug coverage, you will be assessed a monthly late enrollment penalty.
Medicare computes the penalty by calculating the number of complete, uncovered months you were without Part D or creditable coverage by 1% of the “national base beneficiary premium” ($34.70 in 2024). Your monthly Part D premium will always include the monthly penalty, which is rounded to the closest $.10.
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Insurance companies are required by law to inform customers who qualify for Medicare if their prescription medication coverage qualifies as creditable coverage. However, you should inquire as soon as possible to plan your coverage decisions when Part D changes if your insurer or employer hasn’t informed you.
