Medicare Part D: The Basics
Signing up for Medicare Part D can be overwhelming, especially if you don’t know what to expect. To help prepare for enrollment, consider these 7 key Medicare facts before signing up for Medicare Part D.
1. What Does Medicare Part D Cover
Medicare Part D is the part of Medicare that helps cover prescription drug costs. Part D plans cover brand-name and generic drugs that are not covered by Medicare Part A (hospital insurance). All Part D plans must cover the same categories of drugs. However, because Part D plans are offered through private insurance companies specific drugs and categories can differ between plans. For a more in-depth look at what Medicare Part D covers visit: “5 Reasons you should sign up for Medicare Part D benefits”.
2. When to Enroll
There are a few enrollment periods to be aware of when signing up for a Medicare Part D. It is important you are aware of these enrollment windows in order to avoid a costly late enrollment penalty. You can enroll in Medicare Part D during these specific enrollment periods:
Initial Enrollment Period (IEP) The initial enrollment period is your first opportunity to enroll in a Medicare Part D plan. This enrollment period runs for 7 months which includes:
- 3 months before your 65th birthday
- Your birth month
- 3 months after your 65th birthday
For example, if you turn 65 in June, you can enroll in a prescription drug plan as early as March and as late as September.
Special Enrollment Period (SEP) The special enrollment period allows enrollment for Medicare Part D under specific individual circumstances. The most common reason for enrolling in a Medicare Part D plan during a special enrollment period is loss of employer coverage. You may also qualify for a SEP under certain specific circumstances.
3. What Happens if you Don’t Enroll
If you miss your initial enrollment period or decide to delay Part D enrollment, you will have to pay a late enrollment penalty for each month you went without prescription drug coverage once you do decide to enroll. The late enrollment penalty is a permanent amount that is added to your monthly premium and remains in place the entire time you are enrolled in prescription drug coverage through Medicare. The Part D late enrollment can be very costly which is why it is important to sign up for Medicare Part D when first eligible.
4. How Much Does Medicare Part D Cost:
There are several costs associated with Part D coverage and each cost can vary depending on the plan you choose and your coverage area. In general Part D costs include:
- Monthly Premium
- Annual Deductible
- Copay or Coinsurance
- Income Adjustment
- Cost in the coverage phases
For a more in-depth look at the costs associated with Medicare Part D, visit: “Is Medicare Part D Worth the Cost?”
5. How to Compare Plans
Before signing up for Medicare Part D it is important to compare multiple plans to ensure you receive the right coverage for your needs. There is no one-size-fits-all when it comes to prescription drug coverage. Finding the right coverage for you depends on your unique and specific health needs. When comparing Part D plans for Medicare, it is best to be prepared by knowing the answers to questions like:
- How many prescriptions do you take?
- What is the dosage and cost for each prescription?
- Does the plan cover all your medications?
- Are there any coverage restrictions?
- How much will your monthly premium and annual deductible be?
- How much will you pay for brand-name and generic drugs?
- Can you fill your prescriptions at your regular pharmacy?
- What will your costs be if you enter the coverage gap?
6. When to Switch Plans Medicare Part D plans
Reviewing plans each year is important because plan benefits and coverage can change. If you are unhappy with the plan you are enrolled in or if your plan makes changes that affect your prescription coverage you can switch prescription drug plans during the Annual Enrollment Period (AEP). The annual enrollment period runs from October 15th – December 7th each year.
7. What to do if you Can’t Afford Part D
The Extra Help program is available to those who have limited income or resources and require assistance in paying for Part D coverage. If you qualify for Extra Help, Medicare will cover or partially cover the costs associated with prescription drug coverage. To find out if you qualify for Extra Help visit ssa.gov.