Medicare Glossary

Creditable Coverage

Health or prescription drug coverage that is at least as good as Medicare's standard coverage. If you have creditable coverage when you turn 65, you may be able to delay enrolling in Medicare without facing a late enrollment penalty.

Late Enrollment Penalty

A higher premium added permanently to your Part B or Part D premium if you don't sign up for coverage when you are first eligible and don't have other qualifying coverage. The Part B penalty is 10% for each full 12-month period you were eligible but didn't enroll. The Part D penalty is 1% of the national base premium per month.

Also known as: LEP

Medicare Part D

Medicare prescription drug coverage. A voluntary program offered through private insurers to help pay for outpatient prescription drugs. Plans vary in which drugs they cover (formulary) and what you pay. You may owe a late enrollment penalty if you don't join when first eligible.

Also known as: Prescription drug coverage