Medicare Part D covers prescription drug costs. Private insurance companies administer these plans. Medicare requires people older than 65 years of age to have some form of creditable drug coverage.
If a person of this age does not have prescription medication coverage, they may have to pay penalty fees.
A person also becomes eligible for Part D if they live with a disability, end stage renal disease (ESRD), or amyotrophic lateral sclerosis (ALS).
This article will cover which people are eligible for Medicare Part D, when they can enroll, and tips on finding a Part D plan.
To sign up for a Medicare Part D plan, a person must have Medicare parts A and B and live in the service area of the plan they want to join.
If a person has a bundled Medicare Advantage plan that already includes prescription drug coverage, they cannot enroll in a standalone Part D plan.
Regardless of how a person qualifies for Medicare eligibility, they will receive the same coverage level. To qualify for Medicare parts A and B, a person must meet one or more of the following criteria:
Be 65 years of age
Age is the main requirement for Medicare benefits. A person can sign up for Medicare parts A and B over a 7-month enrollment window.
This starts 3 months before a person’s 65th birthday, continues through the month of their birthday, and ends 3 months after their birthday.
Enrolling outside of this window can lead to Medicare charging a higher premium.
Have an eligible disability
People can qualify for Medicare at any age if a physician confirms that they have an eligible disability.
They must also have received financial support from the Social Security Administration or Railroad Retirement Board for at least 24 months.
Examples of eligible disabilities include mental health conditions, Alzheimer’s disease, and chronic back pain.
A person can qualify early for Medicare benefits if they have ESRD.
As a general rule, a person with ESRD can qualify for Medicare benefits within 1–3 months of undergoing dialysis or receiving a kidney transplant.
A person can qualify for Medicare benefits if they are not yet 65 but have ALS, which is also known as Lou Gehrig’s disease.
Most people will receive their Medicare benefits as soon as possible after a doctor diagnoses ALS.
The initial 7-month enrollment period applies to Part D as well as parts A and B.
However, different windows are available, during which a person can switch the type of Part D plan they have or change to a Medicare Advantage plan.
The following are some key times for Medicare Part D enrollment:
October 15–December 7
During this time, a person can join a new Medicare drug plan or switch their current arrangement.
This period also accounts for people who wish to switch from traditional Medicare to a Medicare Advantage plan. Their new drug coverage will begin on January 1 of the following year.
A 5-star rating for an insurance provider suggests that they offer an excellent service that may serve a person’s insurance needs more effectively than their current plan.
A person can only join a 5-star plan during this window if their current plan does not have 5 stars.
January 1–March 31
This is the Medicare Advantage Open Enrollment Period.
During this time, a person can leave a Medicare Advantage plan and enroll in a Medicare Part D plan alongside traditional Medicare.
Special Enrollment Period
A person can sign up for Medicare Part D if they enter a Special Enrollment Period (SEP).
This period usually applies for several reasons, including a person moving out of a plan’s coverage area or entering an institution, such as a nursing home.
December 8–November 30 of the following year
This is a one-time 5-star SEP during which a person can choose to join a plan with a 5-star rating from Medicare.
A person may have to pay a late enrollment penalty if they do not sign up for Medicare Part D during an eligible enrollment period.
A person will pay a late enrollment penalty if they do not have creditable prescription drug coverage 63 days after their enrollment period.
Medicare will calculate the late enrollment penalty based on the length of time for which a person did not have prescription drug coverage. They work this out as follows:
- They count the number of months for which a person did not have creditable prescription drug coverage.
- They multiply this amount by 1% of the “national base beneficiary premium.” For 2020, this number is $32.74.
- They round the monthly premium to the nearest $0.10.
- Finally, they add the resulting amount to a person’s Part D premium.
For example, if a person went 10 months without creditable prescription drug coverage, the penalty would be 10% of $32.74, which comes to $3.27. This rounds up to $3.30.
Medicare will then add $3.30 to the person’s monthly premium. The penalty applies on a lifelong basis. For this reason, it is most cost effective to sign up during one of Medicare’s established enrollment windows.
A person can appeal the penalty decision if they feel that it is unfair.
People who receive Extra Help due to their income level are not subject to Medicare Part D penalties.
There are several ways to find a Medicare Part D plan once a person meets the eligibility criteria. These include:
- Visiting Medicare’s Part D and Medicare Advantage plan finder: This website can help a person find plans available in their area. It also shares consumer ratings to help people compare plans.
- Calling the State Health Insurance Assistance Program (SHIP): This service provides information on the available Medicare Part D drug plans. A person can find out their local SHIP number here.
- Contacting a preferred insurance company: Some people may prefer to apply through a specific insurance representative or company. They should contact the company directly and ask about Medicare Part D plans.
Medicare Part D plans can help an individual reduce the impact of mounting medication costs.
Medicare requires that each plan provides a standardized level of coverage, including a low cost option for generic, nonbranded medications in each major drug category.
When a person chooses a Medicare Part D plan, they should consider cost, quality, and convenience. They should also look at the plan’s drug formulary to make sure that it covers any long-term medications they take.
A person becomes eligible for Medicare Part D when they qualify for other parts of Medicare.
This usually means reaching 65 years of age. However, there are exceptions based on disabilities and medical conditions, including ESRD and ALS.
If a person has a question about their eligibility for Medicare Part D, they can contact Medicare directly on 1-800-MEDICARE.
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