Medicare Prescription Drug Plans

Medicare Part D eligibility and enrollment

You’re eligible for Medicare prescription drug coverage if:

• You’re enrolled in Medicare Part A and Part B, and
• You also live in the service area of a Medicare plan that includes prescription drug coverage

If you are eligible for Part D of Medicare, you may enroll during certain times in a standalone Medicare Prescription Drug Plan or Medicare Advantage Prescription Drug Plan:

• Initial Enrollment Period for Part D (IEP for Part D): This is the first time you are eligible for coverage of Medicare prescription drugs. It generally overlaps with your first Medicare eligibility period, beginning three months before you turn 65, including your birthday month, and finishing three months later (for a total of seven months). Suppose you are eligible for Medicare through disability. In that case, this period begins three months before the Social Security or Railroad Retirement Board advantages from your 25th month of disability and lasts seven months.
• Annual Election Period (October 15 to December 7): This is your annual opportunity to make or sign up for changes to your coverage of Medicare Part D if you don’t have it already. During this moment, you will be able to register for the first time in a Medicare Prescription Drug Plan or Medicare Advantage Prescription Drug Plan, change Medicare plans or discontinue your plan.
• Medicare Advantage Disenrollment Period (January 1 to February 14): If you are registered in Part C of Medicare and alter your mind, you can use this time to disregard your Medicare Advantage plan and return to Original Medicare. You can also enroll in a Medicare Prescription Drug Plan using this time. You can’t use this period to make other changes to your Medicare Part D coverage.
• Special Election Period: Unless you qualify for a Special Election Period, you can only register for Medicare Part D or make adjustments to your coverage. Examples of circumstances that might qualify you for a special election period include, but are not restricted to, moving outside the service area of your Medicare plan, losing your eligibility for Medicaid, or moving to a nursing home.

Medicare Part D late-enrollment penalty

Even if you are not presently taking prescription medicines, it is a good idea to sign up for Part D of Medicare as quickly as you are eligible for the first time. As mentioned, once you have Medicare Part A and Part B and live in the service area of a Medicare plan which includes prescription drug coverage, you are eligible for Medicare Part D.

If you are not enrolling in Medicare Part D, make sure you have other creditable prescription drug coverage as good as the Medicare prescription drug benefit standard. Suppose you do not register for Medicare Part D when you are first eligible and do not have creditable prescription drug coverage for 63 days in a row or more. In that case, you may be subject to a late registration penalty if you register for Part D later. This penalty comes in an additional expense added to your monthly Medicare Part D premium; you may have to pay this greater premium permanently. 

Part D of Medicare is an optional coverage that you don’t need to get. However, if you do not sign up when you are first eligible and do not have creditworthy prescription drug coverage, you may have to pay a greater premium if you end up on the line.

Medicare Part D prescription drug coverage

Every Medicare scheme covering prescription drugs has its form or covered drug list. These forms include coverage of specific prescription medicines for generic and brand names. All plans must cover certain categories of medications, but the specific prescription drugs covered in each category may vary by the insurance company and by Medicare plan. Because of this, it’s always a good idea to check the formulary before enrolling in a Medicare Prescription Drug Plan or Medicare Advantage Prescription Drug plan to make sure your specific medications are covered. Also, keep in mind that the formulary may change at any time. You’ll receive notice from your Medicare plan when necessary.

Medicare Part D prescription drug costs

Since Medicare plans set their monthly premiums and other out-of-pocket expenses, the cost of your Medicare Part D may vary by plan, insurance company, and place. Overall, a monthly premium is required for each Medicare Prescription Drug Plan and Medicare Advantage Prescription Drug Plan. Keep in mind that the premium for your Medicare Part D coverage is separate from any monthly premiums you may owe for Medicare Part A or Part B. In addition to any monthly premium required by your Medicare Prescription Drug Plan or Medicare Advantage Prescription Drug Plan, you will have to continue paying your Medicare Part B premium. If you are registered in a Medicare Advantage plan that involves prescription drug coverage, your Medicare Part D insurance price may be included in your plan premium.

In addition to your monthly plan premium, other Medicare Part D costs may include the following:

• Yearly deductible: This is the amount you have to pay out of your pocket before your Medicare plan starts to cover costs. The state sets a maximum deductible for Medicare plans covering prescription drugs that can alter every year. There may not be a deductible for some plans.
• Copayments and coinsurance: After paying your plan deductible (if needed), you are liable for paying these quantities for your medicines. A copayment is a fixed cost (e.g., a $5 copay), whereas usually, a percentage is a coinsurance. For example, you may owe a 10% coinsurance for covered medications after your plan has paid its share.
• Coverage gap, or “donut hole” After you and your plan have spent a certain amount on covered medications (including the deductible), you may enter the coverage gap, which is a temporary increase in your out-of-pocket prescription drug costs. In the past, beneficiaries paid for all prescription costs once they entered the coverage gap; however, recent healthcare legislation created discounts on your costs for covered brand name and generic drugs in the coverage gap. Once you have paid out of pocket up to a certain amount, you are out of the coverage gap, and your Medicare plan begins catastrophic coverage, during which you pay for the rest of the year only a small copayment or coinsurance for covered prescription drugs. In contrast, your plan covers the remaining costs.