Leah Sugar Kari, Licensed Insurance Agent and Broker Specializing in Medicare Health Insurance Plans

How to Receive a Part D Drug Plan

How to Receive Prescription Drug Coverage-Part D

Medicare offers prescription drug coverage to everyone who is entitled to Part A and/or enrolled in Part B of Medicare. If you decide not to receive Medicare drug coverage when you're first eligible, you'll likely pay a late enrollment penalty unless one of these applies:

Important Information if You Are Covered by an Employer or Union Health Insurance Plan:  

Creditable Prescription Drug Coverage

This is prescription drug coverage (for example, from an employer or union) that is expected to pay, on average, at least as much as Medicare's standard prescription drug coverage.  People who have this kind of coverage when they become eligible for Medicare can generally keep that coverage without paying a penalty, if they decide to enroll in Medicare prescription drug coverage later (if they continue to be covered by an employer's or union's plan) , provided it is creditable coverage.

To receive Medicare prescription drug coverage, you must join a plan offered by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered. Medicare sets standards that each company must follow in establishing their prescription drug formulary.  

2 ways to receive prescription drug coverage

  1. Medicare Prescription Drug Plan (Part D). These plans (sometimes called "Stand Alone PDPs") add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.
  2. Medicare Advantage Plan (Part C) (like an HMO or PPO) or other Medicare health plans that offer Medicare prescription drug coverage. You receive all of your Medicare Part A (Hospital Insurance) , Medicare Part B (Medical Insurance) coverage, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.” You must have Part A and Part B to join a Medicare Advantage Plan.

Consider all your prescription drug coverage choices

Before you make a decision, learn how Part D works with your other drug coverage. For example, you may have drug coverage from an employer or union, TRICARE, the Department of Veterans Affairs (VA), the Indian Health Service, or a Medicare Supplement Insurance (Medigap) policy. Compare your current coverage to Medicare drug coverage. The drug coverage you already have may change because of Medicare drug coverage, so consider all your coverage options.

If you have (or are eligible for) other types of drug coverage, read all the materials you receive from your insurer or plan provider. Talk to your benefits administrator, insurer, or plan provider before you make any changes to your current coverage.

You may owe a late enrollment penalty if, for any continuous period of 63 days or more after your Initial Enrollment Period is over, you go without one of these:

 Creditable prescription drug coverage 

  • A Medicare Prescription Drug Plan (Part D)
  • A Medicare Advantage Plan (Part C) (like an MA-PD)
  • Another Medicare health plan that offers Medicare prescription drug coverage

 The late enrollment penalty is an amount added to your Medicare Part D monthly premium

 Learn how to avoid the late enrollment penalty.

Note:  If you receive Extra Help, you don't pay the late enrollment penalty.

The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage.

Medicare calculates the penalty by multiplying 1% of the "national base beneficiary premium" ($33.19 in 2019 and $32.74 in 2020) times the number of full, uncovered months you didn't have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium. The national base beneficiary premium may increase each year, so your penalty amount may also increase each year.  

Joining a Medicare drug plan may affect your Medicare Advantage Plan.

By contacting the phone number on this website you will be directed to a licensed insurance agent.

Source: www.medicare.gov