How to Avoid Penalties for Late Enrollment

People who are eligible for Medicare and who do not have "creditable" drug coverage (as good as a Part D plan) must join a plan with Part D prescription drug coverage by a certain date to avoid paying penalties on their premiums each month.

How do I know if I have creditable coverage?
Your employer-sponsored health plan, Medicare plan or other health insurance plan is required to send you a letter, telling you whether or not the plan you have is creditable.

By what date must I join a Part D plan?
If you became eligible for Medicare ON or AFTER February 1, 2006, you should join during your birthday month, or during the three months before or after your birthday month, to avoid penalties.

What is the penalty for joining late?
The penalty for joining late is 1% a month on your premium; Medicare could increase the penalty in the future. It doesn't sound like a lot, but beware: You will be charged this penalty on premiums for the rest of your life.  So, if you join 5 months late, you will pay an additional 5% or more on premiums every month, all year, from then on. This penalty applies no matter what plan or company you choose.