Opting out of Medicare Part D is not a bad decision if you have other creditable coverage through another form of insurance. For example, if you receive Federal Employee benefits you will likely have excellent drug coverage through their plan and you can use this to cover the bulk of your prescription drugs. In addition, if you were to lose these benefits in the future and decide to add Part D at a later date you will not pay an Enrollment Penalty as long as you sign up within 63 days after your previous coverage ends.
Opting Out of Part D for Valid Reasons
You may also opt out of Part D during anytime that you are institutionalized. The time you spend in an institution will not be held against you and you can add another Part D Plan in the future without penalty. You may also opt out and switch plans if you move or are living out of the country. Keep all forms of documentation related to the reason that you are opting out of the plan. You may need these in the future to avoid paying the Late Enrollment Penalty.
Opting out of Part D for no "valid" Reason
You may also opt out of Part D for no reason other than you don't take prescription drugs and you don't think you ever will. Some people are extremely healthy well into old age. In the future if you do decide you need prescription drug coverage you can sign up for it and pay the Late Enrollment Penalty for as long as you have the plan.