Medicare Part D FAQ
Medicare Part D became effective Jan.1, 2006, as the result of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. It is a prescription drug benefit that is provided by private insurance companies and other providers who have been approved by Medicare and contract with the federal government.
Who qualifies for Medicare Part D?
You can join a Medicare Part D plan if you are entitled to Medicare Part A and/or enrolled in Medicare Part B and live in the plan’s service area.
When can I sign up?
Your participation in Part D is not automatic. The annual enrollment period (AEP) begins Nov. 15 and ends Dec. 31, with coverage taking effect Jan. 1 of the following year. Provided that you maintain continuous coverage, individuals enrolled in Medicare Part D will be allowed to switch plans each year between Nov.15 and Dec. 31 to take effect Jan. 1 of the following year.
What are the benefits of Part D?
Whatever plan you choose, Medicare prescription drug coverage will assist with your expenses for brand name and generic drugs at pharmacies.
How much does it cost?
Although Medicare pays a substantial portion of the cost, you must enroll in a Part D plan by paying a small monthly premium. You will pay a monthly premium and possibly a deductible, depending on which plan you choose and in which state you live. You will also be responsible for a co-payment / coinsurance for your prescription drugs, which varies too, depending on which plan you choose and in which state you live.
Can I qualify for extra help?
If you have limited income and financial resources and you qualify for extra help, you may not have to pay a premium or deductible. You can apply or get more information by calling the Social Security Administration at 800-772-1213 (TTY/TDD: 800-325-0778).
Am I protected against increased drug costs?
All Medicare Part D plans are private plans. Most participants will pay monthly premiums. That premium could buy you the peace of mind of knowing that if your drug costs become very high, you will be protected.
Do I get a discount on prescription drugs?
If you join a Medicare prescription drug plan, and use the plan's pharmacy network, you'll have access to discounted prices. Part D plans use various networks, so be sure to check to see if your preferred pharmacy is in the network.
Will I pay more if I enroll late?
If you don’t join a Medicare prescription drug plan when you are first eligible to join (during your IEP), and there is a period of 63 continuous days or more during which you don’t have creditable prescription drug coverage (as good as Medicare is), you may have to pay a late enrollment penalty when you join.
Your penalty is calculated when you first join a Medicare drug plan. To estimate your penalty, take 1% of the national average premium for the year you join (The 2008 national average premium is $27.93). Multiply it by the number of full months you were eligible to join a Medicare prescription drug plan but didn’t. This is your estimated penalty amount, which is added each month to your Medicare prescription drug plan’s premium, for as long as you have the plan. If you qualify for extra help, the penalty will be different. For help figuring out how much your penalty will be, call 800-MEDICARE/800-633-4227 (TTY/TTD: 877-486-2048, or call your state health insurance assistance program.
Are the drugs you need covered by Part D?
Covered drugs can vary from plan to plan, so be sure to review each plan's formulary information, which will be available at www.medicare.gov beginning in Oct. If a drug you are currently using is not available through a particular plan, you may want to consider switching your prescription to an equivalent drug.
How do you know if you're getting the best value?
Enrollees should be able to compare prices of the different Medicare Part D plans over the Internet beginning in Oct.
How can you be sure that your plan offers pharmacies that are convenient?
You can learn which pharmacies are "in-network" for each plan — offering the best prices for medications and the lowest cost sharing rates. If the "in-network" pharmacies available in a plan are not local, you may find that a mail order pharmacy to obtain medications is the most cost-effective option. Of course, you may choose to eliminate local pharmacy fulfillment altogether and use the mail order pharmacy option from the beginning as the most convenient and cost-effective method.
What do I need to know if I have prescription drug coverage from a former or current employer or union?
Medicare will help employers or unions continue to provide retiree drug coverage that meets Medicare’s standards. Your (or your spouse’s) former or current employer or union will send you information about how your current coverage compares to the Medicare standard prescription drug coverage. This information is important because it can affect the decision you will need to make this fall regarding if and when you sign up for Medicare prescription drug coverage.
If your (or your spouse's) employer or union has determined that your current coverage, on average, is at least as good as the Medicare standard prescription drug coverage (called creditable prescription drug coverage):
- You can keep it as long as it is still offered by your employer or union.
- You won't have to pay a penalty if your employer or union stops offering prescription drug coverage as long as you join a Medicare drug plan within 63 days after the coverage ends.
Caution: If you drop your employer or union coverage, you may not be able to get it back. You also may not be able to drop your employer or union drug coverage without also dropping your employer or union health coverage.
If your employer or union plan is not as good as Medicare prescription drug coverage, find out about your options from your benefits administrator. You may be able to:
- Keep your current employer or union drug plan and join a Medicare drug to give you more complete prescription drug coverage.
- Drop your current coverage and return to the Original Medicare Plan and join a Medicare prescription drug plan, or join a Medicare Advantage Plan or other Medicare health plan that covers prescription drugs. See the caution above.
What do I need to know if I have drug coverage from TRICARE, the Department of Veteran's Affairs (VA), or the Federal Employee Health Benefits Program (FEHB)?
You should contact your benefits administrator or FEHB insurer for information about your TRICARE, VA, or FEHB coverage before making any changes. It will almost always be to your advantage to keep your current coverage without any changes. If you lose your TRICARE, VA, or FEHB coverage, in most cases, you won't have to pay a penalty, as long as you join a Medicare drug plan within 63 days of losing TRICARE, VA, or FEHB coverage.
