Medicare Part D
Medicare has made prescription drug coverage available to everyone currently on Medicare though their Part D program. Part D drug plans, which are sold by private insurance companies, can vary in cost and by the drugs they cover. This drug coverage is not included in Original Medicare and is typically available two different ways. Your first option is if you have Original Medicare, typically with a Medicare Supplement plan, then you can enroll in a stand alone Part D plan when you are new to Medicare or during another valid enrollment period. Your second option get drug coverage is though a Medicare advantage Plan.
Part D with original medicare
When you select a Medicare Supplement plan or MediGap plan, you have the option to sign up for a stand alone Part D plan or Prescription Drug Plan (PDP). This gives you the freedom to make your PDP choice independent of your Medicare supplement plan. For example: Your MediGap plan may be with Humana and your PDP could be with United. Making sure you do a thorough yearly review could save you thousands of dollars each year!
Part D with a Medicare Advantage Plan
If you have chosen to enroll into a Medicare Advantage, usually your Part D drug plan is included with the plan that you select. A Medicare Advantage (also known as Part C of Medicare) works like insurance you are more familiar with like group coverage where there are copays, networks of doctors and hospitals etc. They do change every year so it's important to review.
How and when to enroll in a Part D Drug plan
You are eligible to enroll in a Medicare prescription drug plan if you have Part A and/or Part B of Medicare. Enrollment in into Part D plans are limited to certain times when you have a valid enrollment Period.
These enrollment periods include:
Initial Enrollment Period: This is a period when you are new to Medicare for the first time and are able to enroll in either a Medicare Advantage or stand alone Part D plan regardless of the time of year. This enrollment period lasts for seven months beginning 3 months prior to the month you turn 65 and continues until 3 months after your birth month.
Example: If you turn 65 on June 15th then your Initial enrollment period would be March 1st – September 30th
Annual Enrollment Period: (October 15th – December 7th) Each year during the Annual enrollment Period you will have the opportunity to switch your Medicare advantage or Part D drug plan to any other plan you wish for the coming year. This is also the time to sign up for a drug plan if you have been on Medicare without drug coverage in the past. The coverage you enroll with will begin on January 1st of the following year.
Note: This does not pertain to Medicare Supplement plans as you can that coverage any time of year.
Special Election Period: Other then the two previous mention enrollment periods you can only enroll in a Part D drug plan if you qualify for a Special Election Period. The most common examples of situations that would qualify are if you are leaving a group health insurance plan or have moved outside of your current drug plans service area.
How to avoid penalties for not having a drug coverage
Medicare Part D plans are available not only to help you pay your current drug expenses but to also protect you from very high drug costs in the future. Medicare strongly encourages you to take out a Part D plan as soon as you are on Medicare by way of a late enrollment penalty if you choose to not enroll. Depending on your circumstances, if you choose to enroll in a Part D program after you first go onto Medicare, you might have to pay a late enrollment penalty of 1% per month for each month you waited to enroll for the rest of the time you have drug coverage.
Many states have low cost Part D plans which you can select to act as a safety net, while helping to avoid the penalties. You might consider this option if you don’t currently take prescription drugs.