Did you know that once you are eligible for Medicare, you must carry “credible” coverage in order to avoid late enrollment penalties down the road for part D? Credible coverage is usually obtained through an employer, the VA, or through a Medicare-approved plan for prescription drug coverage.


I recently worked with an individual receiving SS disability. On the 25th month of receiving disability benefits, Social Security automatically enrolls you into Original Medicare, which is parts A & B. The individual did not receive anything from the Medicare office, including her ID card, so she continued to obtain health coverage (and a premium tax credit) through the Marketplace.


What’s wrong with that, you ask? For one, once you are eligible for Medicare, you are no longer able to receive a premium subsidy. Two, the prescription drug coverage provided by the Marketplace does not meet the minimum standard requirements for Medicare (aka non-credible coverage!)


I was able to contact Social Security and the Medicare office with the client. We took the time to sort through the issues and enroll into a proper Medicare policy. We were also able to terminate the independent coverage, preventing further penalties and paybacks from accruing.


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