Medicare Part D Covers Prescription Drugs And Isnt Really Optional
Original Medicare includes only Parts A and B. That means if you take any prescription medications, or plan to and dont want to pay for them out of pocket youll need to add Medicare Part D to your coverage. This can be done as an add-on to Original Medicare or bundled with a Medicare Advantage plan. Medicare Part D premiums average about $33 per month, according to the CMS.
Signing up on time for Part D is especially important because theres a late-enrollment penalty if you miss your eligibility window. Medicare drug coverage can vary by medication, so start your research early to make sure your plan includes everything you need. Even if you dont take medication now, enrolling in Part D coverage can help prepare you for future prescription costs.
General Enrollment/medicare Advantage Open Enrollment
From January 1 to March 31, you can change or drop Medicare Advantage plans with Part D coverage or join original Medicare during this time.
You cant join a Part D plan during this time if you have original Medicare.
If you have questions about your Medicare part D coverage or enrollment periods, reach out to the insurance company from whom you purchase your coverage, contact the State Health Insurance Assistance Programs National Network or call 800-MEDICARE.
Original Medicare Doesnt Cover Everything
Original Medicare does not cover prescription drugs, custodial care or most hearing, vision and dental care. Medicare only partially covers some services, such as hospitalization, ambulance services and nursing home care, which means you could be responsible for copays and deductibles.
There are ways to cover at least some of the gap, with Medicare Supplemental Insurance plans, or by opting for the privately administered alternative to Original Medicare called Medicare Part C, or Medicare Advantage . You may also qualify for a state-sponsored Medicare Savings Program, which can help cover deductibles, copayments and more.
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What Is Extra Help And Who Is Eligible
You may be eligible for lower premiums, deductibles and coinsurance through Medicares Extra Help program. In 2022, those enrolled in the program pay $3.95 for each generic and $9.85 for each brand name drug.
In 2021, you may qualify if your income is up to $19,320 for an individual and $26,130 for a couple and you have a limited amount of resources such as savings, stocks and bonds. If your income or resources change, you can apply for Extra Help at any time.14
Is There Help If I Cant Afford My Prescription Drug Costs
Some Medicare beneficiaries struggle to afford the high cost of prescription drugs. Although the Affordable Care Act reduced the amount enrollees pay to 25% during the Medicare Part D donut hole, that amount still is more than some beneficiaries can afford.
Enrollees with limited incomes and resources can apply for Extra Help. This federal program dramatically lowers prescription drug expenses under Part D. The income limit in 2021 is $19,320 a year for singles and $26,130 a year for couples, and the asset limit is $14,790 for individuals and $29,520 for couples.
State Pharmaceutical Assistance Programs also provide prescription drug assistance to beneficiaries in some states. These programs can pay for Part D premiums, deductibles and co-pays. Income limits for SPAPs are usually much higher than Extra Help.
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If You Have A Disability Esrd Or Als
Americans with a disability who have received Social Security disability benefits for 24 months are automatically enrolled in Medicare Part A and Part B. Automatic enrollment also applies to beneficiaries who have serious illnesses such as end-stage renal disease, ESRD, and amyotrophic lateral sclerosis, ALS. Youll receive your card when you qualify.
You dont need to do anything to sign up.
Similarly, if youve received disability benefits from the Railroad Retirement Board for 24 months, youll be enrolled automatically in Medicare Parts A and B.
Medicare Part Ds Inescapable Cost Sharing Structure
There is currently no annual maximum out-of-pocket limit on what you can owe in a given year. Theres a four-step maze that determines your share of the costs of medication.
- Deductible period. Some plans charge an annual deductible before coverage kicks in. The maximum deductible allowed in 2021 is $445.
- Initial coverage period. Once your insurance kicks in, you will owe whatever coinsurance or copay your plan imposes. But once the combined total of individual payments and insurer payments reaches $4,130 in 2021 , you officially enter the Medicare Part D donut hole.
- Coverage gap. Otherwise known as the Medicare Part D donut hole, during this stretch you owe 25% of your medication costs. In 2021, enrollees stay in the donut hole until their out-of-pocket spending plus discounts they received for brand name drugs reaches at least $6,550. Then its on to the final cost-sharing stage.
- Catastrophic coverage. After your out-of-pocket spending hits the maximum for the coverage gap, you leave the donut hole and your cost sharing drops to 5% for the rest of the year.
The non-profit Kaiser Family Foundation estimates that since 2010, the annual number of Medicare Part D enrollees whose spending lands them in the catastrophic coverage stage has grown from 400,000 to nearly 1.5 million. It also found that between 2010 and 2019, enrollees cumulatively spent nearly $10 billion when in the catastrophic stage.
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Can Medicare Part C Drop You
Medicare Part C plans are called Advantage or replacement plans. The only way you can qualify for an Advantage plan is if youre enrolled in Medicare A and B. This means you will have to pay your Part B monthly premiums if you purchase an Advantage plan. If you dont pay your Part B premiums, you can be dropped from the Advantage plan.
Some Advantage plans have an additional monthly premium, some do not. Typically, if your Advantage plan has a premium it will only be around $20 to $50 per month. If your plan has a premium but you fail to pay it, the Advantage plan can drop you.
Another reason you could be dropped from your Advantage plan is if the company withdraws the plan. They are not allowed to drop your plan mid-year , but since Advantage plans are only written for one year, the company can terminate the plan on December 31st. Sometimes insurance companies arent happy with the plan or they arent doing well as a company, so they decide to drop the plan. If this happens, you will have to enroll in a new Advantage plan for the coming year.
The final reason you could be dropped from your Advantage plan is if you move. Advantage plans are written only for a specific service area. Typically, service areas compass an entire city or metropolitan area, including all zip codes and counties within it. But if you move out of that metro area, most likely you will have to switch to a new Advantage plan.
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Updated: October 10th, 2021ByKate Ashford×
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Is Your Workplace Drug Coverage Creditable
If you are working past age 65 and have coverage through work, you need to ask HR if the drug coverage in your workplace plan is considered creditable by Medicare. For a plan to be creditable it must offer benefits that are at least as good as what is covered by a basic Part D Medicare plan. If the answer is yes get it in writing and staying on the workplace plan is cheaper than starting Medicare, you can stick with it. retiree health insurance benefits. If at some point you want to switch to Medicare coverage, your prior coverage will entitle you to get a Plan D drug plan without any penalty.)
The minute you stop working post-65, or the minute the plan bumps you from coverage post-65, you need to be aware of a maddening quirk in Medicare rules.
You have up to eight months to sign up for Medicare Part B without any premium penalty. But you only have two months to sign up for Medicare Part D, without the penalty formula kicking in.
When Can I Enroll In Part D
Enrolling in Medicare is an important step for many people in protecting their health and their finances as they age. The Medicare program assists millions of seniors and certain individuals with qualifying disabilities, and without Medicare, some Americans would struggle to afford the cost of healthcare and related expenses. The Medicare program is broken down into parts, and each part covers various types of medical care to include, among others, hospital admittance and outpatient services.
Although the program was comprehensive enough at the time of its inception, over the years, the need for prescription drug coverage became a concern among an aging American population. In 2006, Medicare recipients were able to access this coverage through the introduction of Medicare Part D. These Medicare benefits deliver a low-cost option to Medicare members, and the Part D benefits can be used at retail pharmacies across the country for self-administered drugs.
When Can I Enroll in Part D?
Failing to enroll within this time period, also known as the initial enrollment period, means that you may face a late enrollment penalty if you choose to add Part D coverage at a later date. Although this penalty is added only after adding Part D coverage following the initial enrollment period, it may stick around for the duration of your Medicare enrollment even if you choose to remove Part D coverage in the future.
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Fall Medicare Open Enrollment For Medicare Advantage Plans
Interested in signing up for a Medicare Advantage plan? There are certain times when you can enroll, and one of them is during Fall Medicare Open Enrollment .
You must be already enrolled in Part A and Part B, and live within the service area of the plan youre enrolling in to participate in the Fall Medicare Open Enrollment.
Besides enrolling in a Medicare Advantage plan, you can make other changes throughout the Fall Medicare Open Enrollment period, such as:
- Switch from a Medicare Advantage plan back to Original Medicare .
- Switch from one Medicare Advantage plan to another.
- Switch from a Medicare Advantage plan that doesnt offer prescription drug coverage to a Medicare Advantage Prescription Drug plan.
- Switch from a Medicare Advantage Prescription Drug plan to a Medicare Advantage plan that doesnt include prescription drug coverage.
When Should I Enroll In Medicare For The First Time
Most people enroll in Medicare for the first time around age 65. Some people may qualify to enroll in Medicare earlier than age 65 with a qualifying disability or medical condition. If you become eligible for Medicare due to age or disability, you will have a 7-month Initial Enrollment Period. The rules for enrolling are different if you are enrolling due to a qualifying medical condition.
The Medicare Initial Enrollment Period
You can enroll in Medicare for the first time due to age or disability during what’s known as the Medicare Initial Enrollment Period.
Enrolling in Medicare at 65
Around age 65 you have your Medicare Initial Enrollment Period . It is 7 months long and includes your 65th birthday month, the 3 months before and the 3 months after. During this time, you can enroll in Medicare Part A, Part B, Medicare Advantage and Part D without penalty.
Video transcript
Blue text appears in the center of a beige background. Animated calendar pages are strewn in the corners of the screen.
ON SCREEN TEXT: Important Medicare Dates & Timelines
ON SCREEN TEXT:
More blue text appears at the top of the screen. White and black text on colorful cards fan out in a list beneath the blue text.
ON SCREEN TEXT: Keep these important Medicare dates in mind
ON SCREEN TEXT: Annual Enrollment Period October 15 – December 7
Initial Enrollment PeriodDates vary by person, 7 months
Special Enrollment Period Dates vary by person, 2-8 months
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Medicare Part D: Prescription Drugs
Medicare offers everyone the chance to have insurance to cover most costs for many prescription drugs. But its not mandatory coverage, and you typically have to pay a monthly premium.
How Part D works:
If you have decided to enroll in Original Medicare for your Part A and Part B coverage, the premium cost to add a Part D prescription drug plan averages about $38 a month in 2021, according to the Kaiser Family Foundation.
If you didnt go with Original Medicare and opted for Medicare Advantage , you likely have a drug plan embedded in your MA plan. Many MA plans dont charge any extra premium for the coverage, and for those that do, the cost averages around $12 a month.
Common Mistakes And Problems
With so many Part D options available, it can be hard to know which plan to choose. The good news is that even if you pick a plan that is not quite right for you, you can always change it. The bad news is that you cannot change it whenever you wantonly under the circumstances outlined above.
You do not want to be stuck with a plan that does not offer the services you need. Avoid these common pitfalls and you will be more likely to find the right plan for you.
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What Happens If I Miss My Medicare Supplement Open Enrollment Period
Your eligibility may be impacted if you miss the Medicare Supplement Open Enrollment Period:
- Your application could be declined if you have a pre-existing medical condition.
- Your premium may be higher if you have a pre-existing medical condition.
- Some plans may require you to pay the plan premium but wait for a few months before theyll cover any expenses related to your pre-existing medical condition.
When You Can Switch Part D Plans
In general, you may only switch plans during the Annual Election Period . This is between October 15 and December 7 each year. Coverage begins the following January 1. Outside of the AEP, you may change plans if you have a Special Election Period , such as if you:
- Move to another region outside the service areas of your plan
- Enter a nursing home
- Change nursing homes or other institutions
- Qualify for the extra help/Low-Income Subsidy program
- Lose your eligibility for extra help/LIS
- Lose your full Medi-Cal benefits
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Who Can Enroll In A Medicare Part D
In general, individuals who have Original Medicare, Part A and/or Part B, or a Medicare Advantage plan are eligible to enroll into a Medicare Part D Prescription Drug Plan.
In order to be eligible for Medicare Part D enrollment, you must:
- Have Medicare Part A and/or Part B.
- Live in the service area of a plan that provides prescription drug coverage.
Medicare prescription drug coverage is voluntary, and you will need to enroll. You can receive this coverage through private insurance companies in two ways:
- Medicare Prescription Drug Plan : These stand-alone Prescription Drug Plans can be added on to your Original Medicare coverage, as well as certain Medicare Cost Plans, Medicare Medical Savings Account plans, and Medicare Private Fee-for-Service plans.
- Medicare Advantage Prescription Drug plan: Some Medicare Advantage plans include prescription drug coverage, in addition to providing Medicare Part A and Part B coverage.
Keep in mind that you cannot be enrolled in both types of plans. If you are currently enrolled in a Medicare Advantage plan that includes drug coverage and enroll into a Medicare Prescription Drug Plan, you will be automatically disenrolled from the Medicare Advantage plan and reverted back to Original Medicare.
Signing Up For Original Medicare
You can sign up for Medicare one of four ways:
For California residents, CA-Do Not Sell My Personal Info, .
1 10-minute claim is based solely on the time to complete the e-application if you have your Medicare card and other pertinent information available when you apply. The time to shop for plans, compare rates, and estimate drug costs is not factored into the claim. Application time could be longer. Actual time to enroll will depend on the consumer and their plan comparison needs.
MedicareAdvantage.com is a website owned and operated by TZ Insurance Solutions LLC. TZ Insurance Solutions LLC and TruBridge, Inc. represent Medicare Advantage Organizations and Prescription Drug Plans having Medicare contracts enrollment in any plan depends upon contract renewal.
The purpose of this communication is the solicitation of insurance. Callers will be directed to a licensed insurance agent with TZ Insurance Solutions LLC, TruBridge, Inc. and/or a third-party partner who can provide more information about Medicare Advantage Plans offered by one or several Medicare-contracted carrier. TZ Insurance Solutions LLC, TruBridge, Inc., and the licensed sales agents that may call you are not connected with or endorsed by the U.S. Government or the federal Medicare program.
Plan availability varies by region and state. For a complete list of available plans, please contact 1-800-MEDICARE , 24 hours a day/7 days a week or consult www.medicare.gov.
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