Medicare Part D prescription coverage is available for all Medicare recipients with Part A, Part B or both. It's up to you whether to purchase it -- doing so is not required. If you don't get optional Part D coverage when you first qualify, however, you might have to pay more for it later. The process of getting coverage depends on whether you have original Medicare from the government or a Medicare Advantage plan from an insurance company.
Types of Prescription Coverage
In original Medicare, Part A hospital insurance and Part B medical insurance offer very limited drug coverage. If you have original Medicare, you must purchase a Part D plan to get prescription coverage. Most Medicare Advantage plans include coverage similar to Part D, along with hospital and medical insurance, so you don't have to purchase Part D separately.
However, some private Medicare plans don't include prescription coverage. If you have such a plan, you must purchase a Part D plan to get drug coverage.
When You Can First Apply
You can sign up for Part D or purchase an Advantage plan with prescription coverage during a seven-month window around the time you first become eligible for Medicare. If you qualify as a senior, that window begins three months before the month you turn 65. Your birthday month counts as the fourth month, and your initial eligibility ends three months later.
If you qualify for Railroad Retirement Board or Social Security disability, you become eligible for Medicare 24 months after getting disability. Your seven-month window for applying for Part D starts three months before your 25th month of disability.
When You Can Change Plans
After your first year in Medicare, you can add, change or drop Part D coverage during the annual enrollment period from October 15 to December 7. During that time, you can also change from an Advantage plan to original Medicare; from original Medicare to an Advantage plan; or from an Advantage plan to a different one. For example, you can trade an Advantage plan without drug coverage for one that includes it.
In addition, you can change from an Advantage plan to original Medicare between January 1 and February 14 of each year. If you do this, you can enroll in a Part D plan to go with original Medicare up until February 14.
Late Enrollment Penalty
If you don't have coverage similar to Part D for 63 consecutive days or more after the initial enrollment period, you might have to pay higher premiums to buy Part D later. This is the late enrollment penalty for those who don't have "creditable prescription coverage" during this period. Any drug coverage from an employer or union that pays as much as Medicare counts as creditable coverage, so you won't have to pay a penalty to add Part D.
You're supposed to get a yearly letter from your insurance manager telling you whether your insurance is creditable. If you don't, ask for written notification so that you won't get caught with a penalty later.
If you don't have creditable coverage, you can avoid the penalty by getting prescription coverage before the end of the enrollment period plus 63 days. Low-income people who get assistance in paying for Medicare premiums through the "Extra Help" program don't have to pay the penalty.
How to Enroll
You can locate Part D plans online with the Medicare Plan Finder. Join a plan through the Plan Finder tool or by calling Medicare at 1-800-633-4277. You can also enroll by calling the insurance company or applying on its website. You'll need the information on your Medicare card, including your Medicare number and the date your coverage began.
If you already have prescription coverage through an Advantage plan, buying a separate Part D policy will drop you from Medicare Advantage and return you to original Medicare.
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