Medicare Part D is the part of Medicare that provides prescription drug coverage. Enrollment in Medicare Part D is optional. It’s not required to keep Original Medicare coverage. If you are enrolled in a Part D plan and no longer wish to be, you can cancel your coverage. However, there may be consequences in the future if you do so. Find out when you can cancel Medicare Part D and how to navigate the decision.
Can I Cancel Medicare Part D Anytime?
Since Medicare Part D is not mandatory, you’re under no obligation in keeping the coverage. If you wish to discontinue your prescription drug coverage, you will need to do so during the Annual Enrollment Period (AEP) which runs from October 15 – December 7 each year. This is the only time in which you can disenroll or make changes to your prescription drug plan unless you qualify for a specific special circumstance. According to Medicare.gov, these specific situations include:
Moving from plan’s coverage area
Losing current coverage
Chance to get other coverage
Current Medicare health plan changes its contract with Medicare
Other special situations
Canceling Vs. Changing Plans
When you’re unhappy with your prescription drug coverage, switch plans rather than canceling it. If you cancel your prescription drug coverage and do not pick up creditable drug coverage from another provider, you leave yourself at risk. should an unforeseeable health situation occur in the future. If you drop your plan altogether, you won’t be able to sign up for another prescription drug plan until the Annual Enrollment Period in the fall, and your drug coverage wouldn’t begin until January of the following year. This could leave you with gaps in coverage and high out-of-pocket costs. You will also be subject to a costly late enrollment penalty if you decide to re-enroll in Medicare prescription drug coverage at another time.
You can make changes to your Medicare Part D plan during the Annual Enrollment Period. During this time you can switch from one stand-alone Medicare Part D Prescription Drug Plan (PDP) to another stand-alone Part D plan, or switch to a Medicare Advantage Prescription Drug Plan (MAPDP).
Consider these 4 Advantages Before Canceling
Prescription drugs can be expensive without coverage. Before cancelling your plan, consider the following benefits that a Medicare Part D plan provides:
Variety of Plan Options
Since Medicare Part D is offered through private insurance carriers, there are a variety of plans to choose from. If you are unhappy with your current plan, compare other plans in your area to see if there is a better fit for your needs. Depending on your service area, plans can cost as little as $15 a month. If you rarely take medications it might be helpful for you to find a plan with a low monthly premium.
Prescription drugs can be expensive. Some specialty drugs can cost hundreds and even thousands of dollars a month without coverage. Medicare Part D protects beneficiaries from paying astronomically high prescription drug costs. With a Part D plan, your prescription drug costs will be considerably lower than retail prices.
Provides Protection for the Future
Your health can change in an instant and not having coverage for costly medications can be financially devastating. Prescription drug coverage provides protection for unforeseeable out-of-pocket prescription costs.
The benefit of Catastrophic Coverage
The catastrophic coverage stage is one of the most important phases of Medicare Part D . It is designed to protect beneficiaries from hefty drug spending in a given year. Once you enter the catastrophic phase of coverage, your prescription drug costs dramatically decrease. If you ever need to rely on a life-saving or specialty drug, this phase will save you a great deal of money and provide peace of mind that your prescription needs will be met.
What Happens if I Cancel Medicare Part D Coverage?
If you cancel Part D coverage and do not switch to another Medicare PDP or MAPD, you will be subject to a late enrollment penalty when you decide to sign up for one in the future. The late enrollment penalty is a permanent fee that is added to your monthly prescription drug premium. If you are disenrolling from a prescription drug plan because you don’t currently take any medications, you may want to consider enrolling in a low-cost Plan D option to avoid a future late enrollment penalty.
Unsure whether or not you should cancel your Part D coverage? Speak with a Licensed Independent Insurance Agent to discuss your concerns.