Do I Need Medicare Part D if I Have Supplemental Insurance?
Navigating Medicare can be confusing, especially if you are covered under an employer health plan or another supplemental insurance plan. Medicare beneficiaries often question, “Do I need Medicare Part D if I have supplemental insurance?” The answer is, it depends. Keep reading to find out whether or not you will need to enroll in a Medicare Part D plan alongside supplemental insurance, as well as what happens if you don’t enroll in a Part D plan when you are first eligible.
How Part D Works with Employer Coverage
If you have health insurance through your employer you may or may not need to sign up for Part D coverage when first eligible depending on the type of prescription drug coverage you have. Medicare requires beneficiaries not enrolled in a prescription drug plan through Medicare to have creditable drug coverage that is equal to or better than the standard Medicare prescription drug plan.
When you become Medicare eligible, your employer should inform you whether or not your health coverage is considered creditable. It is extremely important to be aware of this information, especially if your spouse is enrolled in your employer’s health care plan.
If your employer’s health coverage does provide creditable coverage you can either choose to delay Part D enrollment or enroll in a Part D plan for extra coverage. However, you will need to check with your employer to see if your current health coverage coordinates with Part D coverage.
If your employer’s health coverage does not provide creditable coverage, you will need to enroll in a Part D plan when first eligible to avoid a costly late enrollment penalty. You do have the option to delay enrollment however, you will be subject to a late enrollment penalty once you enroll in a Medicare prescription drug plan.
How Part D Works with Medicare Supplement
One common question we receive when it comes to Part D coverage and supplemental insurance is, “Do I need Medicare Part D if I have supplemental insurance?” The short answer is, yes. As of 2006, Medicare Supplement plans no longer provide plans that include prescription drug coverage. You will need a separate prescription drug plan if you:
- Enrolled in a Medicare Supplement plan after 2006.
- Are currently shopping for a plan
- Enrolled in a plan prior to 2006 with drug coverage that is not considered creditable
Part D Enrollment Periods
There are a few enrollment periods to be aware of when it comes to Medicare Part D:
Initial Enrollment Period (IEP)
The initial enrollment period is your first opportunity to enroll in a prescription drug 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
Use this enrollment period if you are enrolling in Part D for the first time in order to avoid a late enrollment penalty.
Special Enrollment Period (SEP)
The special enrollment period allows enrollment for Medicare Part D under specific individual circumstances. Use this enrollment window to enroll in a prescription drug plan once you retire or lose your creditable employer coverage. The special enrollment window runs for 8 months and begins the month after your employer-based health insurance ends.
Annual Enrollment Period (AEP):
If you missed your initial enrollment period and you wish to enroll in a Medicare Part D plan, you will need to do so during the Annual Enrollment Period. The Annual Enrollment Period runs every year from October 15 – December 7.
What Happens if I Don’t Enroll in Medicare Part D?
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. The late enrollment penalty is a permanent amount added to your Part D monthly premium. The cost of the penalty depends on how long you went without prescription drug coverage. It also remains in place the entire time you are enrolled in a prescription drug plan through Medicare. The late enrollment penalty can be costly so it is important to enroll in a Part D plan once you are first eligible.