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There are currently two ways to get prescription drug coverage through Medicare. The first is through a Medicare Part D prescription drug plan (also called PDP). The second option is to choose a Medicare Advantage Plan (Part C) that provides prescription drug coverage (also called MAPD).
Although a few Medigap policies sold before January 1, 2006, provide limited prescription drug coverage (Plans H, I, J), these polices are no longer available. In addition, by law, any Medigap policies sold after this date cannot include coverage for prescription drugs.
What are my options if my Medigap policy has prescription drug coverage?
If you have an older Medigap policy with prescription drug coverage, you have two options for getting additional drug coverage:
Option #1: You can keep your Medigap policy and join a Part D/PDP plan. Before considering this change, you should first compare the drug coverage you have now with the coverage provided by Medicare Part D plans available in your area.
Important note: You cannot have both a Medicare Part D plan and a Medigap policy with prescription drug coverage. So if you join a Part D plan, you must ask your Medigap insurance company to remove the prescription drug coverage from your Medigap policy and adjust your premium. Keep in mind that once the drug coverage is removed from your Medigap policy, you can't get that coverage back.
Option #2: You can disenroll from your Medigap plan and get all your Medicare coverage (Parts A, B, and D) through an MAPD plan. Again, before making this change, you should first compare all the medical and prescription drug benefits you have now with the coverage provided by MAPD plans offered in your area.
Important note: If you enroll in an MAPD, you will also be automatically disenrolled from Original Medicare.
What are my options if I my Medigap policy does not include prescription drug coverage?
If you have Original Medicare (Part A and Part B) and a Medigap policy without drug coverage, you have two options:
- Keep everything as is and simply join a Medicare Part D/PDP for additional drug coverage.
- Disenroll from your Medigap plan and get all your Medicare coverage (Parts A, B, and D) through an MAPD plan. With this option, you will be automatically disenrolled from Original Medicare.
Whichever option you choose, you must be careful about the timing. In most cases you can only join a Medicare Part D plan or Medicare Advantage Plan during the annual Open Enrollment Period (October 15 to December 7). Your coverage will begin on January 1 as long as the plan gets your enrollment request by December 7.
Will I Have to Pay the Part D Late Enrollment Penalty?
If you have a Medigap policy and want to join a PDP or MAPD, you may have to pay a late enrollment penalty. This means you will pay a higher premium than if you had joined a Part D plan when you were first eligible.
Whether you have to pay a penalty depends on if your Medigap policy has prescription drug coverage, and whether that coverage is creditable (at least as good as Medicare's standard prescription drug coverage).
| Does your Medigap policy have prescription drug coverage? | Is it "creditable coverage"? | Will you have to pay a late enrollment penalty?* |
| Yes | Yes | No |
| Yes | No | Yes |
| No | N/A | Yes |
*The late enrollment penalty applies only if you have gone 63 continuous days or more without creditable prescription drug coverage since you first became eligible for Medicare.
Your Medigap insurance company must send you a notice every year telling you if your prescription drug coverage is creditable. You will need to submit this notice with your application if you decide to join a Part D plan or MAPD in the future.
It's important to compare your prescription drug options
Although Medigap plans can be useful for supplementing your Medicare coverage, they are no longer an option if you need prescription drug coverage. Even an older Medigap plan that has limited drug coverage is less likely to meet your medical needs if you are taking prescription drugs on a long-term basis.
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