MEDICARE PART D – Prescription Drug Plans

As a Medicare recipient you have the option of enrolling in Medicare Part D to get help with your prescription drug costs. Some refer to Medicare Part D as “prescription drug coverage.” You may even hear Medicare Part D simply referred to as a “drug plan.”

Medicare Part D coverage is available through private insurance companies. These companies are contracted by Medicare. This means that costs and availability may be different between plans and companies. Location also plays a factor in plan offerings.

Eligibility and Enrollment

If you are enrolled in Medicare Part A and/or Part B, you’re eligible for Medicare prescription drug coverage. Eligibility to enroll in some plans will depend on location.

If you’re eligible for Medicare Part D, you can enroll in a stand-alone Medicare Prescription Drug Plan or Medicare Advantage Prescription Drug plan. This enrollment opportunity occurs during certain times:

  • Initial Enrollment Period for Part D:This is the period when you are first eligible for Medicare prescription drug coverage. This time frame normally starts three months before you turn 65, including your birthday month, and ending three months after your birth month (for a total of seven months). There are times that a person becomes eligible for Medicare through disability.
  • Annual Election Period (October 15 to December 7): This is your yearly opportunity to make any change to your Medicare Part D coverage. It is always a good practice to review your prescription drug coverage during this time. A change may be in order if your current plan decides to no longer cover your medications. Another reason to change coverage could be if your pharmacy will no longer accept your plan in the new year.
  • Medicare Advantage Open Enrollment Period (January 1 to March 31): If you are enrolled in Medicare Part C (Advantage Plan) and change your mind, you can use this period to disenroll. Then, you can return to Original Medicare. When you disenroll from your Advantage plan, you may then enroll in a Medicare Part D plan.
  • Special Election Period: You may also make coverage changes if you qualify for a Special Election Period (SEP). An example of a situation that could qualify you is a move. If you moved to an area that doesn’t recognize your plan, then you would have the opportunity to change plans.

Late-enrollment penalty

Medicare Part D is optional. This is coverage you don’t have to get it. However, if you don’t sign up and enroll when you’re first eligible, you could possibly find yourself paying a higher premium if you decide to enroll at a later date.

If you’re not taking prescription medications, it is still better to sign up for Medicare Part D when you’re first eligible. As mentioned, you’re eligible for Medicare Part D once you have Medicare Part A and/or Part B.

If you don’t enroll in Medicare Part D, make sure you have other coverage that is considered creditable. Creditable coverage would be an insurance that is as good as the standard coverage available through the Medicare prescription drug benefit. You could have to pay a late enrollment penalty if decide you want a drug plan at a later date. This penalty would be added to whatever you monthly premium would be. This penalty is not a onetime assessed fee, but is monthly for life. We highly recommend that you sign up for a “drug plan” when you are first eligible.

Prescription Drug Coverage

Each prescription drug plan has its own formulary of medications that the plan covers. All plans must cover certain categories of medications. The difference is that drugs covered in each category will vary from plan to plan. This is why it is important to check the formulary list before deciding on a plan. Our training and experience allows us to educate you and assist you in making the best decision when to comes to your drug coverage.

Prescription Costs

Each prescription drug plan sets their own premiums and other out-of-pocket costs. Costs and premiums for the same plan may differ by location. Medicare Part D drug plans charge a monthly premium. These monthly premiums are as low as $15 monthly and as high as $80 monthly. Just because a plan has higher premiums doesn’t necessarily make it a better plan offering better coverage. As stated earlier, our training and experience allows us to assist you in choosing a plan that best fits your needs.

Summing It All Up

  • Medicare Part D offers prescription drug benefits to Medicare recipients. Many insurance companies offer Part D programs. These are purchased through insurance agents in each state. Each company creates its own formulary of which drugs it will cover and the cost.
  • Because many states offer multiple Part D options, new plan enrollees find it difficult to choose which plan is right for them. Choosing a reputable, knowledgeable insurance agent (like us) to assist in that choice can make choosing the right plan for your needs less confusing.
  • Participation in the program is voluntary. However, seniors who do not enroll when they are first eligible may encounter late penalties and wait times when they do choose to enroll. Medicare beneficiaries who wait to enroll are responsible for paying the full cost of their medications until they are eligible to enroll unless they have other coverage such as through an employer or the VA.

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