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What Is Medicare Part D?
Medicare Part D plans provide prescription drug coverage. Part D coverage is offered to all Medicare beneficiaries. Coverage is through private insurance companies or other medicare-approved companies. Individual plans can have different costs and may even vary when it comes to drugs they cover. If you do not join a Part D plan when you are first eligible and do not have other approved (creditable) coverage you will likely have to pay a late enrollment penalty when you do sign up.
There are two ways you can get Part D coverage. The first way is through Medicare Prescription Drug Plans (you may also see these called PDPs). These add drug coverage to Original Medicare, Medicare Cost Plans, some of them anyway, Medicare Private Fee-for-Service Plans (again. some of them) and Medicare Medical Savings Account Plans.
Your second option is to look into Medicare Advantage Plans, also called "Part C." These are plans that allow you to get all your coverage, Part A or B and Part D drug coverage from the same company. Medicare Advantage plans that have Part D drug coverage are sometimes referred to as MA-PDs.
Who Can Get Medicare Part D?
Medicare Part D plans are available to those eligible for Medicare. This includes people who are 65 years or older and who are U.S. citizens or permanent residents, people under 65 with certain disabilities and people of any age with End-Stage Renal Disease (ESRD). ESRD is permanent kidney failure that requires dialysis or a transplant. Those who have amyotrophic lateral sclerosis (Lou Gehrig's Disease) qualify as well.
To join a Part D plan, be it a Medicare Prescription Drug Plan or a Medicare Advantage Plan, you will need to have Medicare Part A or B. You must also live in the area covered, known as the service area, of the plan you want to join.
Joining a Part D plan is voluntary and you will pay an additional premium for this coverage. If you have other prescription drug coverage, you can wait to enroll on a Part D plan. One thing to keep in mind is that if your prescription drug coverage is not, on average, as good as Medicare Plan D coverage you will most likely have to pay a penalty for joining later. You will have to pay this penalty for as long as you have Medicare prescription drug coverage.
What does Medicare Part D cost?
There are a number of costs associated with Part D plans. Plans usually charge a monthly fee that will differ from plan to plan. This is in addition to any premiums on your Part B plan. With a Medicare Advantage Plan (be it an HMO or PPO) or a Medicare Cost Plan that includes drug coverage, that premium may include any payment for prescription coverage.
There may also be a yearly deductible. This is an amount you have to pay before your drug coverage kicks in. Not all plans will have a yearly deductible.
Then there are copayments and coinsurance. These are the amounts you pay at the pharmacy for your covered prescriptions after you reach the deductible (if the plan has one). You pay your share, and your drug plan pays its share for covered drugs.
Most plans also have a coverage gap (the dreaded "doughnut hole"). This means that after both you and your drug plan have paid a certain amount you will have to pay up to 100 percent of the costs up to a yearly limit. Only a small percentage of Medicare recipients will reach this coverage gap.
If you reach the coverage gap in 2012, you will get a 50 percent discount on covered brand-name medications and a 14 percent discount on generic drugs. In 2013, you will get a 52.5 percent discount on brands and a 21 percent discount on generics. Coverage will continue to increase each year through 2020, when the coverage gap will close.
People of limited income can qualify for Extra Help. This assistance is linked to the federal poverty level and to your resources. These limits change yearly. If you have Medicaid with prescription drug coverage and Medicare, Medicare and Supplemental Security Income (SSI) or if the state where you live pays your Medicare premiums, you get this help automatically and need not apply.
You can find out more about this from the Social Security Administration or your State Medical Assistance Office.
Where and when can I get Medicare Part D?
You can join a Medicare Part D plan when you are first eligible during a seven-month period called your Initial Enrollment Period. This period extends from three months before the month you turn 65 to three months after that month. For instance, if you turn 65 on June 15, the period begins on the first of March and extends until the end of September. In other words, you have three months on either side of the month you were born.
If you are eligible for Medicare due to a disability, you can join a Part D plan three months before and three months after your 25th month of disability payments. If you do not enroll during this period when you are first eligible, you may pay a penalty.
You can also sign up for a Part D plan or switch plans between the Annual Election Period (also called Open Enrollment), which runs from October 15 through December 7 each year. If you join or switch plans during this period, your coverage will begin on January 1.
If you qualify for "Extra Help" you can join a Part D plan anytime.