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Medicare’s Lifelong Late Enrollment Penalties- How to avoid them and how to appeal them

One issue that affects a large amount of Medicare beneficiaries is Late Enrollment Penalties.  Medicare can penalize someone for not having creditable coverage for prescriptions (Part D of Medicare) or for not having medical coverage (Part B of Medicare).  This article will focus on prescription Late Enrollment Penalties since it is much more common to be penalized for not having prescription coverage. Anyone who works past age 65 and stays on their employer’s or a spouse’s insurance has to prove that they had insurance during the period they were eligible for Medicare but on the employer plan.  

 

If you had a gap in insurance of more than 63 days or your insurance was not considered creditable coverage then the government adds a Late Enrollment Penalty on top of what you already pay for Medicare.   This penalty will stay with you the rest of your life.

 

When someone who has delayed Medicare decides to retire (or their spouse with the benefits retires), they have to apply for Medicare Part B and D.  The CMS L564 is needed to process the Part B application with Social Security, and that proves you had creditable health insurance coverage.  Individuals have many options for their Prescription Drug plan, but whichever plan they choose will mail them a number of letters including Summary of Benefits, ID Cards, and marketing literature.  Along with all this other mail is an attestation form to prove that you had prescription drug coverage.  If you do not respond to the letter or your response is somehow lost or not accepted then you are penalized every month going forward for the rest of your life.

 

Unfortunately, that has cost many Medicare beneficiaries thousands of dollars in penalties that they should not have received in the first place.

 

Avoid a Late Enrollment Penalty

 

Even if you don’t take any medications you still want to enroll in a Medicare Prescription plan, either through an insurance carrier’s Part D or included in a Medicare Advantage plan.

 

After losing insurance through an employer, you have up to 63 days to apply for a prescription drug plan.  The plan will begin the month after you submit the application.  If you don’t apply for a prescription drug plan during this window, you can apply for a plan annually between Oct. 15th to Dec 7th with a Jan 1st effective date.

How is it Calculated


Medicare takes the number of months you have not had creditable prescription coverage and multiples that by 10% of the average Prescription Drug plan monthly premium.  

For Example: if you had 12 months without creditable coverage and the average prescription drug plan premium is $36 per month.  You multiply 12 x .36 to equal $4.32.  In this scenario, the Medicare beneficiary will get a $4.32 penalty, which will be added to their prescription drug plan or Medicare Advantage plan's monthly premium.

The average monthly Medicare Part D premium varies every year so this penalty fluctuates annually.  

Appealing a Medicare Late Enrollment Penalty

You have the right to appeal if you believe you've been unfairly assessed a late enrollment penalty. Here's how:

1. Gather your documentation: Collect any evidence that supports your case. This might include proof of prior creditable coverage, such as letters from previous insurers or employers, or documentation of any special circumstances that prevented you from enrolling on time.
2. Complete a Request for Reconsideration form: You can submit the appeal to C2C Innovative Solutions Inc, a company hired by Medicare to process the appeal requests.

Click Here for the paper application

Here’s the website to appeal online- https://www.c2cinc.com//appellant-signup

3. Submit your appeal: Mail or fax the completed form and your supporting documentation to the address provided on the form. Be sure to do this within 60 days of the date on the letter stating you have to pay the penalty.

Fax- (833) 946-1912

Standard Mail:

C2C Innovative Solutions, Inc.

Part D LEP Reconsiderations 

P.O. Box 44165

Jacksonville, FL 32231-4165

4. Wait for a decision: Medicare's contractor will review your appeal and typically make a decision within 90 days. You'll receive a letter explaining their decision.

Tips for a Successful Appeal

  • Be clear and concise: Explain why you believe the penalty is incorrect and provide specific dates and details.
  • Provide all relevant documentation: The more evidence you have, the stronger your case will be.
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