Medicare Part D

Medicare Part D is an optional program that helps pay for prescription drugs. It does this through a variety of plans offered by private companies that have been approved by Medicare. Part D is often called the "Medicare Prescription Drug Program."

Part D is the newest section of Medicare. It was signed into law in 2003 as part of the Medicare Prescription Drug Improvement and Modernization Act . The prescription drug benefits began in 2006. Medicare Prescription Drug Coverage offers:

  • prescription drug coverage for everyone with Medicare regardless of income and resources, health status, or current prescription expenses;
  • both brand name and generic prescription drugs at participating pharmacies convenient to beneficiaries;
  • protection for people who have very high drug costs or from unexpected prescription drug bills in the future.

The program can dramatically reduce the cost of your medications. Remember, unless you qualify for Extra Help, this program is designed to share the costs with you, not pay all of your medicine costs.

Are you a healthcare provider? Read CLAIM's guide to Part D for professionals.

Medicare Drug Plans

Medicare drug plans are offered by insurance companies and other private companies approved by Medicare. People can choose to join a Medicare drug plan that meets their needs based on coverage, cost, convenience, and customer service.

There are two types of Medicare Drug Plans:

Medicare Prescription Drug Plan (PDP) These plans add drug coverage to the Original Medicare Plan and some other types of Medicare plans.

Medicare Advantage Plan (MA-PD) This is an HMO or PPO and other Medicare health plan that includes prescription drug coverage. You will get all of your Medicare coverage (Part A and B), including prescription drugs (Part D) through these plans.

All Medicare drug plans must offer at least the standard level of coverage as the original Medicare. Plans can be flexible in their benefit design and offer different or enhanced benefits. Their benefits and costs may change from year to year.

Medicare drug plans will cover generic and brand name drugs. To be covered by Medicare, a drug must be available only by prescription, approved by the Food and Drug Administration, used and sold in the United States and used for a medically accepted indication. Each plans will have a "formulary" that tells you which drugs are covered by the plan. Plans may require prior authorizations, step therapy and quantity limits.

When to Enroll

When you turn 65: You may sign up for Part D when they first become eligible for Medicare A and/or B which is three months before the month you turn age 65 until three months after you turn age 65. This is called your "initial enrollment period" or IEP.

When you receive Medicare due to a disability: If you receive Medicare due to a disability, you can join from three months before to three months after your 25th month of cash disability payments.

Annual Open Enrollment Period (Oct 15 - Dec 7) : If you do not enroll when you are first eligible, your next opportunity will be during the Annual Enrollment Period (AEP), October 15 – December 7. During the Annual Enrollment Period, you can enroll in a plan, change plans or drop drug coverage for the coming calendar year. The new plan will take effect January 1.

Special Enrollment Period: In certain situations, individuals with Medicare may be eligible for a Special Enrollment Period (SEP) that allows them to make changes to their Medicare health or drug coverage outside the annual enrollment periods. For a list of these situations, refer to www.cms.gov/home/medicare.asp and select “Eligibility and Enrollment”.

Penalty

If you do not enroll when you are first eligible and go without creditable prescription drug coverage for 63 continuous days or more, you may have to pay a late enrollment penalty to join later. The penalty amount is based on when you  join. It is added each month to your Medicare drug plan’s premium for as long as you have a plan.

“Extra Help” with Drug Costs

Many people with limited income and resources will be eligible for “extra help” paying for prescription drugs. Extra help is sometimes referred to as "low-income subsidy. " People with the lowest income and resources will not pay premiums or deductibles and have small or no copayments. Those with slightly higher incomes will have a reduced deductible and pay a little more out of pocket.

There is no coverage gap for people who qualify for the extra help.

To determine if you are eligible for “extra help” with your drug costs, contact the one of the following:

  • www.socialsecurity.gov
  • Call 1-800-772-1213 and ask for “Application for Help with Medicare Prescription Drug Plan Costs”
  • Call us (CLAIM) at 1-800-390-3330

You can read more about Part D Extra Help by clicking here.

Read the next page about Choosing a Part D Plan