What's the Medicare Part D Late Enrollment Penalty?

The Medicare Enrollment Period Period will be here in less than ninety days. Take a moment now to consider the impact of the late enrollment period and specifically the penalty on your prescription drugs. 

The late enrollment penalty is an amount added to your Medicare Part D premium. 

You may owe a late enrollment penalty if, at any time after your initial enrollment period is over, there's a period of 63 or more days in a row when you don't have Part D or other creditable prescription drug coverage. 

You must learn how to avoid the late enrollment penalty. Please note, if you get Extra Help, you don't pay the late enrollment penalty.

How much is the Part D penalty?

The cost of the late enrollment penalty depends on how long you went without creditable prescription drug coverage. The late enrollment penalty is calculated by multiplying 1% of the "national base beneficiary premium" times the number of full, uncovered months you were eligible but didn't join a Medicare Prescription Drug Plan and went without other creditable prescription drug coverage. 

The final amount is rounded to the nearest $.10 and added to your monthly premium. The national base beneficiary premium may increase each year, so the penalty amount may also increase each year.

How will you know if you owe a penalty?

Your plan will tell you if you owe a penalty. After you join a Medicare drug plan, the plan will tell you if you owe a penalty, and what your premium will be. You may have to pay this penalty for as long as you have a Medicare drug plan. If you had to pay a Part D late enrollment penalty before you turned 65, the penalty will be waived once you reach 65.


Do you have any Medicare questions or comments, leave them below.

Medicare Most Frequently Asked Questions - Part 2

When Can I Sign Up for Medicare?

You can sign up for Medicare as soon as you become eligible, regardless of what month it is. But each year, you have the option of making changes to your Medicare Advantage and prescription drug plan (or Medicare Part D) during open enrollment. Open enrollment ran from October 15 to December 7 and has been so for several years. 

During that period, you could have switched from original Medicare to a Medicare Advantage Plan, or vice versa. You could have also switched from one Medicare Advantage plan to another, or from one Medicare part D prescription drug plan to another, or dropped your Medicare Part D coverage altogether.

There is also the Medicare Advantage disenrollment period in which you are currently in. This period runs from January 1 to February 14 each year. During this time, Medicare Advantage enrollees can switch back to Original Medicare and then sign up for Medicare part D as well. Again, if you are newly eligible for Medicare, you can enroll the year around.

Are There  Other Times I Enroll in Medicare?

There are also special circumstances where Special Enrollment Periods are available. According to Medicare.gov, if you are covered under a group health plan from a current employment, you can sign up for Part A and/or B during the Special Enrollment Period as long as you or your spouse are working and are covered by a group health plan through your employer.  Additionally, there is an eight month period where you can sign up for Part A and/or B the month after employment ends or group health plan insurance ends

If you have any additional Medicare questions or comments, leave them below.

11 Most Important Financial Terms You Need to Know in Business

Cost-Volume-Profit diagram, showing Break-Even Point as point where Contribution equals Fixed Costs. 

When you're asking for capital to start or expand your business, it's important to know the key financial terms the financiers use and what these terms actually mean.

I've included a brief summary of these financial terms to help you in your efforts:

1. Financial Statements: Used as a reference for Profit & Loss Statement (which shows revenues and expenses and your income or loss) and the Balance Sheet (which reflects your assets, liabilities, and owner's equity).

Additional financial reports such as Cash Flow, Break Even Analysis, Sources and Uses of Working Capital, and Financial Ratios Analysis are also often included.

2. Debt or Equity Capital: Describes what kind of capital you are seeking. Debt is usually in the form of a loan, promissory note, mortgage or other legal instrument. Equity is an ownership position in the business.

3. Rate of Return (Yield): The primary purpose of investing your money or getting other people's money is to earn a return on capital. This number indicates what profit or interest investors or lenders receive for investing. Prior to approaching any source for funds, you should know what kind of yields they are seeking.

4. Cash Flow: This is the life blood of a company. Cash flow is the generation of funds available to pay expenses and returns to investors or lenders. Cash flow reflects the timing and amount of inflow and outflow of funds.

5. Working Capital: Usually, this figure represents total assets that will be converted to cash within a year minus liabilities that must be paid within a year.

6. Collateral: This is property accepted as a secondary source of repayment of a loan or other obligation.

7. Break Even Analysis: A method of assessing a company's profit potential downside risk. Expenses should be separated into variable costs (i.e. labor, materials, commissions) and fixed costs (i.e. rent, utilities, salaries, insurance, etc.). With these costs and estimated revenues per unit, you can determine how much product/service must be sold to cover costs.

At this volume, your company incurs neither a profit nor loss.The break even analysis is an important tool to illustrate the effects of product price changes, cost increases or a reduction in demand on the company's profitability.

8. Margin: The difference between revenues received and expenses incurred and commonly expressed as a percentage or dollar amount. Gross margin is the difference between total sales revenue and total costs of goods sold. Net margin is the difference between total sales revenue and all costs associated with producing goods, including administration, taxes, and other overhead expenses.

9. Leverage: The ability to borrow a larger amount of money than a company has invested in property or assets.

10. Fixed Cost: A cost that remains unchanged even with variations in output.

11. Variable Cost: The cost of production that vary directly in proportion to the number of units produced.


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