CREDITABLE INSURANCE COVERAGE vs NOT CREDATABLE
This is a HOT Topic for senior citizen who are eligible for Medicare benefits and it is extremely time-sensitive. If you or anyone you know is getting close to turning 65 – please read this and share with them.
There seems to be a lot of confusion about this subject and we would like to fix it.
Why is this important?
Medicare beneficiaries (65 or older) have an opportunity to receive subsidized (READ: cheaper than usual) prescription drug coverage through the Medicare’s Part D (Drug) Program and the best time to sign up at the cheapest rate is during a short 6 month window (3 months BEFORE turning 65 to 3 months AFTER). Once you are out of this timeframe, the cost starts going up. Medicare adds a 1% permanent penalty to the premium if you did not enroll within 63 days of the eligibility period. So, you don’t want to miss it.
But what if you happen to have a current insurance coverage, that you want to keep instead of getting Medicare D? This is when you must figure out if you current coverage is Creditable or Not Creditable:
Creditable coverage means that the insurance policy’s prescription drug coverage is at least as good as the current Medicare Part D program. So, someone with a creditable plan can choose to maintain that coverage instead of enrolling in the Medicare plan and AVOID THE LATE ENROLLMENT PENALTY by GETTING A CREDIT for their existing coverage. ACA compliant health plans (employer, group, etc.) are all Creditable. .
Not Creditable coverage is when the plan’s drug coverage does not meet the requirement. Short-Term insurance is an example of a NOT CREDITABLE COVERAGE. If you have such a Not-Creditable plan and you do not get the Medicare Part D during your “window”, you will get the penalty attached to your Medicare Part D cost for life.
KEY FACT TO REMEMBER:
You have 6 months to sign up for Medicare Part D coverage for the best possible cost. The window opens 3 Months before you turn 65 years old and closes 3 months after.