What is Medicare Part D?

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Signing up for Medicare Part D coverage is optional, but if you don’t sign up when first eligible or if you don’t already have “creditable” coverage, you may have to pay a permanent late enrollment penalty.

Here we will discuss what Medicare Part D is, how to avoid any penalties, and what your options are for enrolling to pharmacy coverage.

Creditable Employer Coverage

“Creditable” coverage is drug coverage from an employer or elsewhere that has been approved by Medicare. You can find out if your current drug coverage qualifies by calling and asking them.

Even if you aren’t currently taking any drugs, we recommend signing up for a Medicare Part D plan to avoid any future penalties. 

You can get Medicare Part D coverage through two common avenues:

• Either as a standalone Prescription Drug Plan
• Part of a Medicare Advantage Plan.

The standalone option will cost you monthly and will often include a deductible, while most Medicare Advantage plans include the Part D coverage at no extra cost.

As a bonus, most Advantage plans do not have a deductible for their Medicare Part D coverage. 

Keep in mind that every Medicare Part D Prescription Drug Plan has its own list of covered drugs. This list is called a “formulary.” The formulary will tell you which medications are covered, how much you’ll pay, and if there are any special rules for any particular drug. Your plan’s formulary may also change annually. If this happens, you will get an “Annual Notice of Change” letter from your plan provider. 

Speaking of special rules, below is a list of rules that are very common in most Medicare Part D formularies. 

Generally, you will see prior authorizations for extremely expensive medications and quantity limits for drugs with high addiction potential. This isn’t a rule, but more so a common theme of when these coverage rules are applied. 

Part D is a Section of Medicare that can Change Annually.

Sometimes a Prescription Drug Plan can make changes to the prescriptions they cover or change the copay they are covered at. These changes can happen through out the year, but generally they happen at the beginning of each calendar year. Your Part D plan will send an Annual Notice of Changes (ANOC) every October letting you know of any changes for the following year.

For this reason, we recommend doing a review of your drug coverage during the Annual Enrollment Period every year to confirm all your medications are covered for the upcoming year and that you won’t have any surprises when paying for your prescriptions.

Medicare Part D: What are my options?

When looking to get Medicare Part D, whether just to avoid a penalty or get your medications covered, it helps to know your options.

• Many are often only aware of Prescription Drug Plans for drug coverage when they are first entering Medicare.
• When on Medicare you can get your Part D coverage from either a prescription drug plan or a Medicare Advantage plan with drug coverage. 

If you are only looking to get Part D to avoid a penalty then a Medicare Advantage plan can cover your bases without adding to your costs.

It’s important to note that a Medicare Advantage plan will also include benefits to lower your Medicare shares of cost, but you have to check that all of your doctors will accept the plan. 

Another benefit of many Medicare Advantage plans are that they often do not have a deductible and some may even cover some medications during the donut hole.

This can help keep your monthly costs stable throughout the year when on a fixed income. These plans may not be for everyone, but it is important that everyone knows that the option exists.

As you age and your needs change you may change from a Prescription drug plan to a Medicare Advantage plan or vice versa. Understanding what the pros and cons of each option are can support you to have your healthcare work for you. If you have questions or need support understanding what may work in your circumstances, feel free to contact one of our Local Medicare Agents today.