Medicare Part D - Frequently Asked Questions
- Who Can Get Medicare Part D Drug Coverage?
- How Do Medicare Drug Plans Work?
- How Much Does Medicare Drug Coverage Cost?
- When Can You Join, Switch, or Drop a Medicare Drug Plan?
- How Do You Switch Your Medicare Drug Plan?
- How Do You Join a Medicare Drug Plan?
- What Is the Medicare Part D Late-Enrollment Penalty?
- How Much Will Your Part D Late-Enrollment Penalty Be?
- What If You Have Full Coverage from Your State Medicaid Program and Are Eligible for Medicare?
- What If You Get Certain Benefits or Other Help to Pay Prescription Costs, and Medicare Automatically Enrolls You in a Plan?
- What If You Get Prescription Drug Coverage from TRICARE, the Department of Veterans Affairs (VA), or the Federal Employee Health Benefits Program (FEHBP)?
- What if You Get Prescription Drug Coverage from the Indian Health Service, Tribe or Tribal Health Organization, or Urban Indian Health Program?
- What If You (or Your Spouse) Have Prescription Drug Coverage from a Former or Current Employer or Union?
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Who Can Get Medicare Part D Drug Coverage?
Everyone with Medicare can get prescription drug coverage.
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How Do Medicare Drug Plans Work?
After you join a Medicare drug plan, the plan provider will mail you membership materials, including a card to use when you get your prescriptions filled. When you use the card, you may have to pay a copayment, coinsurance, and/or deductible if any are charged by the plan.
Choosing Medicare Prescription Drug Coverage
Joining a Medicare drug plan when you are first eligible means you won't have to pay a late-enrollment penalty.
Every year (from November 15 - December 31), you may switch to a different Medicare drug plan if your plan coverage changes or your needs change. When you join or switch to a new Medicare drug plan, your coverage will generally begin on January 1 of the following year.
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How Much Does Medicare Drug Coverage Cost?
Your costs will vary depending on the drugs you use, the plan you choose, and whether you qualify for extra help paying your Medicare Part D costs. Exact coverage and costs are different for each plan, but all Medicare drug plans must provide at least a standard level of coverage set by Medicare. Call the plan you're interested in to find out more about plan costs.
Payments you make in a Medicare drug plan include the following:
- Monthly premium - Most drug plans charge a monthly fee that varies by plan. You pay this in addition to the Part B premium. Some drug plans charge no premium.
- Yearly deductible - This is the amount you pay for your prescriptions before your plan begins to pay. Some drug plans have no deductible.
- Copayments or coinsurance - Amounts you pay for your prescriptions after the deductible. You pay your share, and your plan pays its share for covered drugs. If you belong to a Medicare Advantage Plan (like an HMO or PPO), or a Medicare Cost Plan that offers Medicare prescription drug coverage, the monthly premium you pay includes an amount for prescription drug coverage.
- Coverage gap - Most Medicare drug plans have a coverage gap. This means that after you and your plan have spent a certain amount of money (varies by plan) for covered drugs, you have to pay all costs out-of-pocket for your drugs while you are in the "gap."
Once you reach the limit set by your plan, you will get "catastrophic coverage" (see below). You must continue to pay the monthly premium even while you are in the coverage gap. Each state offers at least one plan with some type of coverage during the gap.
However, it's important to note the following:- Plans with gap coverage may charge a higher monthly premium.
- Some plans have a coverage gap for brand-name drugs only and may offer generic drug coverage during the gap.
- Even if a plan offers gap coverage, not all drugs may be covered in the gap. Check with the plan first to see if your drugs would be covered in the gap. Note: If you get extra help paying your drug costs, you won't have a coverage gap. However, you will probably have to pay a small copayment or coinsurance amount.
- Catastrophic coverage - Medicare drug plans provide special coverage if you have extremely high drug costs. This is called "catastrophic coverage."
It assures that once you have paid no more than $4,050* in 2008 for your covered drugs, you only pay a coinsurance amount (around 5% of the retail drug price) or a copayment (around $2.25 to $5.60 for each prescription, depending on your plan) for the rest of the calendar year.
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When Can You Join, Switch, or Drop a Medicare Drug Plan?
You can join, switch, or drop a Medicare Part D Drug Plan at these times:
- When you first become eligible for Medicare (3 months before you turn age 65 to 3 months after the month you turn age 65)
- If you get Medicare due to a disability, you can join during the 3 months before to 3 months after your 25th month of cash disability payments.
- From November 15-December 31 of each year. Your coverage will begin on January 1 of the following year.
- At any time if you qualify for extra help. This includes people who have Medicare and Medicaid, belong to a Medicare Savings Program, get Supplemental Security Income (SSI) benefits (but not Medicaid), and those who apply and qualify. In certain situations, you may be able to join, switch, or drop Medicare drug plans at other times (like if you move out of the service area or live in an institution).
- Starting in 2006, if you enroll in a Medicare Advantage plan (HMO or PPO) you will be locked into that plan and only able to change during specified enrollment periods: - Once during the Open Enrollment January 1 through March 31 from 2007 on. Your new coverage starts the first of the month after you enroll. - Once during the Annual Coordinated Election Period - November 15 through December 31 of every year. Your new coverage starts the following January. During these enrollment periods you can switch from traditional Medicare to a Medicare private health plan (HMO, PPO or Private Fee For Service Plan), from a Medicare private health plan back to traditional Medicare, or from one Medicare private health plan to another. If your Medicare private health plan leaves your area or you move out of your plan's service area, you will be given a Special Enrollment Period to switch to another private health plan or to Original Medicare no matter what time of the year it is.
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How Do You Switch Your Medicare Drug Plan?
You may change your Medicare Depending on your circumstances, you can switch to a new Medicare drug plan by simply joining another drug plan during one of the times listed above. You don't need to tell your old Medicare drug plan you are leaving or send them anything. You will be disenrolled automatically from your old Medicare drug plan when coverage in your new drug plan begins. You should get a letter and enrollment information from your new plan provider in the mail.
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How Do You Join a Medicare Drug Plan?
MedicareSaver.com can help you choose and join the Medicare Drug Plan that is best for your specific medications. Care should be taken to match your medications to the drug plan, rather than just join a plan and find out after the fact that either your specific drugs are not covered, or they are not priced competitively. MedicareSaver makes the entire process of plan selection easy by automatically analyzing your medications and pricing them for each plan in your state.
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What Is the Medicare Part D Late-Enrollment Penalty?
If you don't join a Medicare drug plan when you are first eligible for Medicare Part A and/or B and you go without creditable prescription drug coverage for 63 continuous days or more, you may have to pay a late-enrollment penalty to join a plan later. This penalty amount changes every year, and you will have to pay it as long as you have Medicare prescription drug coverage.
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How Much Will Your Part D Late-Enrollment Penalty Be?
Your late-enrollment penalty is calculated when you join a Medicare drug plan.
To estimate your penalty amount, multiply 1% of the national base beneficiary premium for the current year ($27.93 x 1% = $.28 in 2008) by the number of full months you were eligible to join a Medicare drug plan but didn't. Round this to the nearest ten cents. This penalty amount is added each month to your Medicare drug plan's premium for as long as you have a plan.
For example, if you waited 24 months to join a plan, you would multiply $0.28 times 24 for a total penalty, after rounding, of $6.70. This amount would be permanently added to the monthly premium of the plan you chose.
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What If You Have Full Coverage from Your State Medicaid Program and Are Eligible for Medicare?
- Medicare will automatically enroll you in a Medicare drug plan if you don't join one on your own. Medicare, not Medicaid, will provide most of your drug coverage and help pay for your prescription drugs.
- In most cases, you will pay $0-$5.15 out-of-pocket for each covered prescription.
- The drugs that are covered will vary depending on the plan.
- You can switch to another Medicare drug plan at any time. You should compare your current plan with other plans available in your area and decide which is best for your prescription needs.
- Medicaid may still cover other care that Medicare doesn't cover. For some drugs, Medicaid may also add to Medicare drug coverage.
- If you live in certain institutions (like a nursing home or long-term care hospital), you will pay nothing for your covered prescription drugs.
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What If You Get Certain Benefits or Other Help to Pay Prescription Costs, and Medicare Automatically Enrolls You in a Plan?
If you have other prescription drug coverage that's at least as good as Medicare's drug coverage (creditable prescription drug coverage), you may not want to keep the drug plan Medicare enrolls you in. If you don't want to keep this plan, or to have Medicare enroll you in another drug plan, call 1-800-MEDICARE (1-800-633-4227) or the plan provider. TTY users should call 1-877-486-2048. Tell them you want to disenroll from this plan (or opt-out of "automatic" or "facilitated" enrollment).
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What If You Get Prescription Drug Coverage from TRICARE, the Department of Veterans Affairs (VA), or the Federal Employee Health Benefits Program (FEHBP)?
- Most people keep their TRICARE, VA, or FEHBP prescription drug coverage as long as they still qualify.
- Contact your benefits administrator or your insurer for information about your TRICARE, VA, or FEHBP coverage before making any changes. In most cases, it will be to your advantage to keep your current coverage. However, in some cases, adding Medicare prescription drug coverage can provide you with extra coverage and savings, especially if you qualify for extra help.
- If you lose your TRICARE, VA, or FEHBP coverage, and you join a Medicare drug plan, and your drug coverage begins within 63 days in most cases, you won't have to pay a late-enrollment penalty when you join.
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What if You Get Prescription Drug Coverage from the Indian Health Service, Tribe or Tribal Health Organization, or Urban Indian Health Program?
- You and your community may benefit if you join a Medicare drug plan. Ask your health provider or benefits coordinator if joining a plan is right for you. If it is, they can help you find a plan.
- If you get prescription drugs through an Indian health pharmacy, you pay nothing and your coverage won't be interrupted. Joining a Medicare drug plan may be helpful to your Indian health provider because the drug plan pays part of the cost of your prescription. This helps the Indian health provider with the cost of services.
- If you have full coverage from Medicaid and live in a nursing home, you pay nothing for your Medicare prescription drugs. For more information on how to join a plan, see your Indian health provider or check with the benefits coordinator at your local Indian health pharmacy.
- If you get health care from the Indian Health Service, Tribal Health Program, or Urban Indian Health Program, you have creditable prescription drug coverage. You won't have to pay a penalty to join a Medicare drug plan at a later date. Ask your Indian health care provider for a letter stating you have creditable coverage.
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What If You (or Your Spouse) Have Prescription Drug Coverage from a Former or Current Employer or Union?
We strongly recommend that you speak to your current benefits administrator to see what the impact of Medicare Part D enrollment will be on your current coverage.
In some cases, joining a Medicare drug plan might cause you, or your spouse, or other dependents to lose some or all of your employer or union coverage.
In other cases, if you join a Medicare drug plan and you also have employer or union coverage, you may still be able to use your employer or union coverage along with the plan you join.
Employers and unions that provide prescription drug coverage must notify you each year about how your current coverage compares to Medicare's basic prescription drug coverage.
You may get this information in a letter, in a notice from your plan, or in your benefits handbook. Use this information to help you decide whether to join a Medicare drug plan.
Keep the notices you get. You may need to show them as proof of creditable prescription drug coverage if you join a Medicare drug plan later. If you don't get this information, contact your benefits administrator.
If your employer or union stops offering prescription drug coverage that is creditable, you won't have to pay a late-enrollment penalty if you join a Medicare drug plan and your coverage begins before you go 63 days without coverage.
If your employer or union drug coverage isn't as good as Medicare prescription drug coverage (not creditable), talk to your benefits administrator to learn about your choices.
Call your benefits administrator before you make any changes.
For further information please read the comprehensive overview of Medicare Part D contained in our Medicare Part D Guide.
