Medicare Part D
Medicare Part D
What is Medicare Part D prescription drug coverage?
Medicare Part D, also known as a Prescription Drug Plan or "PDP," was created under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (2003 Medicare Act) to help cover the costs of prescription drugs. Prescription drug coverage is offered only by private companies contracted with Medicare through stand-alone plans (for beneficiaries who have Original Medicare) and through HMOs, PPOs, and PFFSs (for beneficiaries who have a Medicare Advantage plan). Anyone who has Original Medicare or Medicare Advantage is eligible to enroll in Part D. Enrollment in Part D is voluntary.
Caution: If you have employer or union coverage, call your benefits administrator before you make any changes, or before you sign up for any other coverage. If you drop your employer or union coverage, you may not be able to get it back. You also may not be able to drop your employer or union drug coverage without also dropping your employer or union health (doctor and hospital) coverage. If you drop coverage for yourself, you may also have to drop coverage for your spouse and dependents.
Tip: Refer to Your Guide to Medicare Prescription Drug Coverage which is the official government booklet that tell you how the program works, how to get extra help paying for drug coverage if you have limited income and resources, and how it may affect any current drug coverage you have.
Who is Eligible to join a Part D Prescription Drug Plan?
To join a Medicare Prescription Drug Plan, you must have Medicare Part A OR Part B. In contrast, to join a Medicare Advantage plan, you must have Medicare Part A AND Part B. You must also live in the service area of the Medicare drug plan you want to join.
Caution: If you don't currently have creditable prescription drug coverage (coverage that is expected to pay, on average, at least as much as Medicare's standard prescription drug coverage), you should think about joining a Medicare Precription Drug Plan as soon as you're eligible. If you don't join a Medicare Prescription Drug Plan when you're first eligible and you decide to join later, you may have to pay a late enrollment penalty.
What is covered under Part D?
The basic Part D plan generally meets the following criteria:
Some drugs are not required to be covered by Medicare Part D, including:
TIP: Although not required to be covered, some plans choose to cover some of these drugs.
How much you'll pay for Medicare drug coverage depends on which plan you choose. But in general, here's what you can expect to pay in 2011:
Caution: Costs and limits may change each year, and not all plans will work exactly this way.
Tip: Extra help with Medicare drug plan costs is available to people who have limited income and resources. Medicare will pay all or most of the drug plan costs of beneficiaries who qualify for help. You can get an application for help from Medicare, or you can pick up one up at your local pharmacy.
Medicare prescription drug coverage is available in two ways:
Caution: If you are in an HMO or PPO, you must receive drug coverage through that plan.
If you are currently enrolled in Original Medicare, you can enroll in a Part D plan (or make changes in your Part D coverage) during the Annual Coordinated Election Period (AEP) which runs from October 15 to December 7 of each year. If you're new to Medicare, you have seven months to enroll in a drug plan: three months before, the month of, and three months after becoming eligible for Medicare.
If you do not enroll in a Part D plan during your Initial Enrollment Period, you will be able to enroll, disenroll, or change drug plans during the Annual Coordinated Election Period (AEP) from October 15 through December 7. However, a premium penalty will generally apply unless the reason you didn't join sooner was because you already had prescription drug coverage that was at least as good as the coverage available through Medicare.
Tip: Beginning in 2011, there will no longer be an Open Enrollment Period whereby you can change Medicare Advantage plans. Rather, there will be an Medicare Advantage Disenrollment Period (MADP) from January 1 to February 14 each year. During this time, you can disenroll from your Medicare Advantage plan and return to Original Medicare. You will then be able to enroll in a stand-alone Part D Prescription Drug Plan.
You can join or change plans during a Special Enrollment Period (SEP) in certain situations, including (but not limited to):
Refer to Medicare Enrollment Periods for more details about Special Election Periods.
Tip: You can switch to a new Medicare drug plan simply by joining another drug plan during one of the times shown under Medicare Enrollment Periods. You don't need to cancel your old Medicare drug plan or send them anything. Your old Medicare drug coverage will end when your new drug plan begins.
Caution: If you are enrolled in a Medicare Advantage Plan (Part C) that includes prescription drug coverage and you enroll in a Medicare Prescription Drug Plan, you will be disenrolled from your Medicare Advantage Plan and returned to Original Medicare.
What is the Late Enrollment Penalty?
The late enrollment penalty is an amount that is added to your Part D premium. You may owe a late enrollment penalty if one of the following is true:
NOTE: If you get Extra Help paying for your Prescription Drug coverage, you don't pay a late enrollment penalty.
The cost of the late enrollment penalty depends on how long you didn't have creditable prescription drug coverage. Currently, the late enrolment penalty is calculated by multiplying 1% of the "National Base Beneficiary Premium" which is $32.34 for 2011, times the number of full, uncovered months that you were eligible but didn't join a Medicare drug plan and went without other creditable prescription drug coverage. The final amount is rounded to the nearest $.10 and added to your monthly premium.
NOTE: Since the "National Base Beneficiary Premium" may increse each year, the penalty may also increase. You may have to pay this penalty for as long as you have a Medicare drug plan.
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