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Prescription Drug Coverage

65Medicare’s drug benefit is outpatient prescription drug coverage offered by private insurance companies for anyone with Medicare Parts A & B.

Purchasing a Medicare Drug plan (Part D) is optional and is only allowed during the approved enrollment period. Whether you should sign up for a Medicare drug plan depends on your situation.

If you decide to enroll, you must have Medicare Part A and/or Part B and live in the plan’s service area. You can enroll during you Initial Enrollment Period (IEP) which is usually the same as you Part B Initial Enrollment Period.

If you already have “Creditable Coverage” – drug coverage that is at least as good as or better than Medicare’s basic drug benefit – you need to consider keeping it. By enrolling in a Medicare drug plan, you will lose your creditable coverage, and might not be able to get it back if you’re not satisfied with your Medicare plan.

If you do not enroll in the Medicare drug benefit when you are first eligible, you will pay a penalty when you enroll later. The penalty is 1% of the national average premium for each month that you do not have coverage. In 2014, it is 1% of $32.42. If you do not enroll, you will have to wait to enroll during the next Annual Enrollment Period (AEP) which for 2014 is October 15 thru December 7.

When you enroll in a Part D plan during the AEP, your coverage is effective on January 1, no matter what date you signed the application.

Once enrolled in a Part D plan, you cannot change plans or companies until the following AEP unless you qualify for a Special Enrollment Period. The following events will qualify you for an SEP:

  • You move out of your plan’s service area.
  • You are admitted into or reside in a qualifying institution.
  • You choose to change your employer, retiree, prescription drug coverage for any reason.
  • Your Medicare prescription drug plan stops offering coverage.
  • You become eligible for a Special Needs Plan (SNP).

Caution

  • Do not purchase a prescription drug plan base on premium alone. Often times the less expensive plans have less medications on their formularies.
  • Make sure all of your medications are on the plan’s formulary. If a specific medication is not on the formulary you could be paying full price for that medication out of your pocket. Be aware that formularies can change during the course of a year.
  • Pay attention to the tiers for your specific medications. Your medication can be on the formulary but the tiers can be different from plan to plan. A Tier 1 medication is less expensive than a Tier 3 medication. So it is important to check where your medication falls on each formulary. Be aware, that formularies can change during the course of the year.
  • The best to analyze drug cards is to put your medications in the medicare.gov website. Be accurate with the names, dosages, and frequency of your medications so that the results reflect your current situation. Be aware that formularies can change during the course of the year.
  • Plans usually change every year. Just because your drug plan was great this year doesn’t mean next year it will be great. Premiums can rise, medications can be moved onto or off of a formulary, and medications can have tier changes within the formulary.
  • Pharmacy choice can make a difference. Many prescription drug plans have preferred pharmacies where you will pay less for your prescriptions. So when evaluating your plan choices on medicare.gov, it is critical to include the pharmacies at which you prefer to purchase your medications.

If you need help with choosing your drug plan, please use “Email Us” below with your questions. It can be very confusing, and we will be glad to help.