Understanding Medicare Part D – Prescriptions Drug Plans
Laying a Solid Foundation | Lesson 5

Enrollment Opportunities & Late Enrollment Penalty

Now that you’ve got a good grip on cost, let’s talk enrollment.

There is no underwriting with Medicare Part D plans.

So, instead, enrollments are restricted to specific time frames.

Understanding enrollment period opportunities is crucial to make sure you can identify sales opportunities.

It also helps you provide quality service by getting your clients enrolled within those designated time frames.

The first enrollment opportunity for a beneficiary would be during their Initial Enrollment Period.

This typically coincides with the same time frame that they are eligible to enroll in Original Medicare.

That Initial Enrollment Period, or IEP is a seven-month period that starts three months before the month of their 65th birthday, includes the month of their birthday, and extends three months out.

Beneficiaries that qualify for Medicare through Social Security disability or Railroad Retirement Board disability benefits, also qualify for a PDP Initial Enrollment Period which starts 3 months before their 25th month receiving Social Security or RailRoad Retirement Board benefits, the month of their 25th check, and extends three months after the month they receive their 25th check.

If a client misses their Initial Enrollment Period, they still have options, but risk experiencing coverage gaps for a limited time, and/or paying late enrollment penalties.

When a beneficiary goes 63 or more days in a row without Medicare drug coverage or other creditable prescription drug coverage after missing their IEP, they may have to pay a penalty for as long as they have Medicare coverage.

The cost of that penalty depends on how long they went without Part D or creditable prescription drug coverage.

It is calculated by multiplying one percent of the national base beneficiary premium, which changes from year-to-year, times the number of full, uncovered months the beneficiary did not have Part D or creditable coverage.

The second enrollment opportunity on our list is the Annual Enrollment Period, or AEP for short.

Each year, there is an opportunity to enroll, drop, or switch plans during AEP. It’s also the same time frame for enrolling, dropping, or switching Medicare Advantage plans.

The AEP begins on October 15 and runs through December 7. Any enrollments made during this time will be effective January 1, for the new plan year.

It’s important to get in touch with your current clients during AEP to make sure they’re still happy with their coverage and don’t need to make changes. As well as review their current list of medications and check on any formulary changes with the PDP’s new plan year benefits to make sure their current plan is the best fit.

Our third enrollment opportunity comes during the Medicare Advantage Open Enrollment Period, another yearly enrollment period that runs from January 1 through March 31. The MA OEP has a different set of rules than the Annual Enrollment Period, though.

Yes, according to its name, the MA OEP is primarily an opportunity for beneficiaries to switch out of a Medicare Advantage plan that they just enrolled in.

We’re mentioning it in reference to Medicare Part D because if a beneficiary switches out of a Medicare Advantage plan to go back to Original Medicare, they will use this same time frame to pick up prescription drug coverage with a Medicare Part D plan.

Our final opportunity to enroll in Medicare Part D is during one of many different Special Enrollment Periods, or SEPs.

These are special circumstances under which Medicare beneficiaries can make plan changes.

They’re important to be aware of, because if you have a potential client who missed their Initial Enrollment Period, you could help them use a Special Enrollment Period to avoid a late enrollment penalty.

As I just mentioned, Special Enrollment Periods are special circumstances, various qualifying life events that allow beneficiaries to enroll in or disenroll from their Medicare Advantage plan or prescription drug plan.

Some examples of qualifying events include, but are not limited to losing current health coverage, moving, losing income, or becoming institutionalized.

We’ll have the link to a full list of qualifying events on’s section on Special Enrollment Periods.

In addition to the list, they have info on how long the opportunities last, and the types of changes that can be made for each specific circumstance.

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