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Medicare Prescription Drug Coverage (Part D)

Medicare offers prescription drug coverage to everyone with Medicare.  Even if you don't take a lot of prescriptions now, you should still consider joining a Medicare drug plan.  To get medicare prescription drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare.  Each plan can vary in cost and drugs covered.  If you decide not to join a Medicare drug plan when you're first eligible, and you don't have other creditable prescription drug coverage, you will likely pay a late enrollment penalty.  (Please see the CMS publication Your Guide to Prescription Drug ). 

How do I get Medicare Drug Coverage?

There are two ways to get Medicare prescription drug coverage:

  1. Medicare Prescription Drug Plans.  These plans (sometimes called "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 Plans (like an HMO or PPO) or other Medicare health plans that offer Medicare prescription drug coverage.  Medicare Advantage Plans with prescription drug coverage are sometimes called "MA-PD's)"

Who Can Get Medicare Drug Coverage?

To join a Medicare Prescription Drug Plan, you must be enrolled in Medicare Part A or Medicare Part B.  To join a Medicare Advantage plan you must have Medicare Part A and Medicare Part B.  You must also live in the service area of the Medicare drug plan you want to join.

When can you Join, Switch or Drop a Medicare Drug Plan?

You can join, switch or drop a Medicare drug plan at these times:

When you are first eligible for Medicare
During the Annual Election Period established each year by Medicare
Anytime of year, if you qualify for " Extra Help"
At other times of year if you have a Special Election Period (SEP)

For more information on Medicare Advantage Plan and Prescription Drug Plan enrollment Periods see our press release Enrollment Periods for Medicare Advantage and Part D.


If your Medicare Advantage Plan includes prescription drug coverage and you join a Prescription Drug Plan, you will automatically be disenrolled from your Medicare Advantage Plan and returned to Original Medicare.

What do I pay?

Your actual drug plan costs will vary depending on the prescriptions you use, the plan you choose, whether you go to a pharmacy in your plan's network, whether your medicines are on your Prescription Drug Plan's drug list (formulary) and whether you get "Extra Help" paying for your Part D costs.

A Medicare prescription drug plan contains the following cost components:

  • Monthly Premium
  • Yearly deductible
  • Co payments or Coinsurance

For more details please see our publication How will Medicare Part D Affect YOUR Current Insurance?

The Coverage Gap:

Most Medicare drug plans have a coverage gap (also called the "doughnut hole").  this means that after you and your drug plan have spent a certain amount of money for covered drugs you have to pay all of the costs out-of-pocket up to a yearly limit.  Not everyone will reach the coverage gap.

Catastrophic Coverage:

Once you reach the plans out of pocket limit, you automatically get "catastrophic coverage".  This assures that once you have spent up to your plans out-of-pocket limit for covered drugs, you only pay a small coinsurance amount or co payment for the drug for the rest of the year.

Late enrollment Penalty:

The late enrollment penalty is an amount that is added to your Part D plan premium. You may owe a late enrollment penalty if one of the following is true:

You did not join a Medicare drug plan when you were first eligible for Medicare and you did not have other "Creditable Prescription Drug Coverage
You did not have Medicare prescription drug coverage or other "Creditable Prescription Drug Coverage" for 63 days or more in a row

Note: If you get "Extra Help" you do not pay a late enrollment penalty.

The cost of the penalty depends on how long you did not have "Creditable Presercription Drug Coverage:.
For a more detailed explanation of the Part D late Enrollment Penalty please see our press release Medicare Part D and the Late Enrollment Penalty.

Before Signing up for a Prescription Drug Plan:

Please see the Office of the Commissioner of Insurance's publication Medicare Part D - Things to Know Before Signing Up.






Last Modified:   7/26/2016 1:48:50 PM   
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