Skip to main content

Advanced Search

Advanced Search

Current Filters

Filter your query

Publication Types



Newsletter Article


From the CQ Newsroom: Grassley Bill Would Waive Penalty for Late Enrollment in Drug Benefit

MAY 16, 2006 -- One day after the deadline for seniors to sign up for a Medicare prescription drug plan without incurring a late fee, key senators backed legislation to waive the penalty for those enrolling later this year.

Finance Chairman Charles E. Grassley, R-Iowa—one of the architects of the 2003 Medicare law (PL 108-173)—introduced a bill Tuesday, saying he hoped to get a unanimous consent agreement and move it through the Senate.

The draft bill would waive the penalty charged to seniors who enroll in a drug plan during the next open enrollment period, which begins in mid-November. It also would authorize $18 million for outreach efforts to help seniors learn about the benefit and be ready to sign up this fall.

Under the 2003 law, seniors who are eligible for Medicare but signed up for a plan this year after May 15 would be charged an additional 1 percent of their premiums for each month they delay enrolling. If the penalty is not waived, that would mean seniors who sign up during the next enrollment period would have to pay a lifetime surcharge of 7 percent.

Grassley, joined by bill cosponsors Mike DeWine, R-Ohio, Max Baucus, D-Mont., and Bill Nelson, D-Fla., at a news conference Tuesday, said he had not endorsed a waiver of the penalty fee earlier because he wanted to encourage people to avoid procrastinating and get drug coverage as soon as possible.
He acknowledged that seniors who rushed to sign up by the May 15 deadline might be upset at the reprieve for latecomers. "Seniors could legitimately see this as unfair," he said. "But on the other hand, we are dealing with a brand new program and we want to give people the opportunity to get acquainted with it."

The Bush administration has backed a firm May 15 deadline, but Centers for Medicare and Medicaid Services Administrator Mark B. McClellan has said the decision will ultimately be up to Congress. On May 9, the administration announced that low-income seniors would not be charged a penalty if they sign up after the deadline this year.
The bill is expected to cost about $1.7 billion, which would be offset by funds provided in the 2003 law intended to entice preferred provider organizations to offer Medicare coverage in under-served regions.

The senators said they expect broad backing for their bill. A similar measure by Nelson won 49 votes on the Senate floor when he tried to attach it as an amendment to the fiscal 2007 budget resolution (S Con Res 83). Now, with Grassley's support, the proposal is expected to face little resistance.
In the House, Nancy L. Johnson, R-Conn., chairwoman of the Energy and Commerce Subcommittee on Health, said she will introduce a bill this week that would waive the late penalty for seniors signing up later this year.

Publication Details