Medicare Part D, or prescription drug coverage, is the most recent addition to the Medicare program as it begun way back in 2006. Now, anyone with Medicare Parts A and B is also eligible for Medicare Part D.
A few things to note about Part D
- Medicare prescription drug coverage is available only through private health insurers approved by Medicare.
- You can purchase a stand-alone plan (MA-PD), or your drug coverage can be bundled with a Medicare Advantage plan (Part C).
- Prices and coverage may vary from plan to plan, so it pays to shop around.
- If you don’t sign up for prescription drug coverage (or have some other form of creditable drug coverage) as soon as you’re eligible, you’ll be charged a late enrollment penalty
When to Enroll
Because Part D has a late enrollment penalty, just like Part B, it’s important that you enroll as soon as you’re eligible. You’re eligible when:
- You turn 65 (you may enroll starting 3 months before your 65th birthday, the month of your birthday, and up to 3 months after your birth month)
- You’re under 65 and disabled
- You enroll in Part B (whether or not you have Part A)
If you don’t enroll at one of these times, you can be charged a late enrollment penalty. In addition, you can be penalized anytime you go a period of 63 days or more without a Medicare prescription drug plan or some other creditable coverage (from a former employer, for example).
The penalty itself is calculated by multiplying 1% of the national base beneficiary premium by the number of full months you were eligible for coverage, but didn’t enroll. You can learn more about the Part D late enrollment penalty at Medicare.gov.
Two Ways to Get Coverage
While Medicare prescription drug coverage is only available through private health insurers, there are two ways you can receive your coverage:
- A stand-alone Medicare Prescription Drug Plan (MA-PD)
If you have original Medicare and don’t want to switch to a Medicare Part D plan, then you’ll need to enroll in a stand-alone MA-PD to avoid a late enrollment penalty (unless you have creditable coverage). You will have to look out for a standalone MA-PD if your Medicare coverage do not cover for drugs.
Things to Consider When Choosing a Prescription Drug Plan
While the price is always important, it’s not the only thing to consider when shopping for a prescription drug plan. You’ll want to keep these other issues in mind when making a decision:
A plan’s formulary is just a list of the medications the plan covers. If one or more of the medications you take is not on a plan’s formulary, you’ll want to look elsewhere.
Most plans have a network of pharmacies they want you to use in order to get the best prices. If you go to a pharmacy that’s not in your plan’s network, you may have to pay more for your prescriptions.
Many prescription drug plans can give you a lower price if you have your medicine sent to you by mail. The plan may also require that you get a 3-month supply at a time. In most cases, this isn’t a problem, but you may want to check with your doctor to make sure mail order is right for your medicines.
Service & Convenience
If you have a Medicare Advantage plan with prescription drug coverage, there’s just one company to contact if there’s ever an issue with your coverage. It may be more difficult to coordinate benefits between plans, if your prescription drug plan is with a different carrier than your other Medicare coverage.