This will depend on whether your Medigap policy is considered “creditable prescription drug coverage.” (This means that the Medigap policy is expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage.) If it isn’t creditable coverage, and you join a Medicare Prescription Drug Plan now, you will probably pay a higher premium than if you had joined when you were first eligible. However, it’s quite possible that a Medicare Prescription Drug Plan could still be a better value. Also, you should consider that your prescription drug needs could increase as you get older. Each month that you wait to join a Medicare Prescription Drug Plan will make your late-enrollment penalty that much higher.
If your Medigap policy is creditable coverage and you decide to join a Medicare Prescription Drug Plan, you won’t have to pay a late-enrollment penalty as long as you don’t drop your Medigap policy before you join the Medicare Prescription Drug Plan. You can only join a Medicare Prescription Drug Plan from November 15–December 31 each year, unless you lose your Medigap policy (for example, if it isn’t guaranteed renewable and your company cancels it). In that case, you can join a Medicare Prescription Drug Plan at the time you lose your Medigap policy.
