Medicare is a federal program designed to provide health care to people who are over the age of 65 and those who have certain disabilities. Several components make up Medicare, and its various sections are divided into parts. Understanding each of these parts can help you select the best Medicare coverage for your needs. Medicare Part D is one part.
What Is Medicare Part D Coverage?
Medicare Part D is the specific component of Medicare designed to provide drug coverage. This is the component of health insurance coverage that helps to pay for the prescription medications you need now, whether it is routine and ongoing prescriptions or a one-time treatment for an illness. Your prescription drug coverage is very important to get right. Otherwise, you may have to pay a substantial amount of money for the medications you need. Let’s take a closer look at how it all works.
Who Is Eligible for Medicare Part D?
To get prescription drug coverage through a Medicare plan, you need to:
- Be eligible for Medicare, also called being a Medicare beneficiary
- You can qualify for drug coverage if you sign up for Original Medicare or a Medicare Advantage Plan
Remember, Original Medicare only provides Part A and Part B coverage. That helps to pay for a hospital stay you may have and your routine doctor’s appointments. Original Medicare does not include any drug coverage.
If you choose Original Medicare, you can then compare several providers for prescription drug coverage and find one that works for you. You then add this coverage to your Original Medicare coverage.
The other option is to choose a Medicare Advantage Plan instead of Original Medicare. This gives you access to an affordable type of health insurance that will include drug coverage.
Why Do You Need Medicare Part D?
You may think you do not need Medicare Part D coverage. You may not be taking any prescription medications right now. You may be pretty healthy. Yet, a single illness may cause you to need antibiotics or ongoing prescription medication. That is when the costs get high.
Also important is that if you are eligible for Medicare and do not sign up for it, you may be charged a penalty for late enrollment. That can make getting the health coverage you need even more expensive.
Who Can Qualify for Medicare Part D?
Being eligible for Medicare means you have met one of two main qualifies set by the federal government. Let’s explain.
You have reached the age of 65
Many people today are living far longer than 65, but that is the magical retirement age for many people. You become eligible to receive all your Medicare benefits when you reach this age. If you are retired, you may want to sign up right away because it helps to get your insurance in place quickly.
You can sign up for Medicare during a seven month window that begins three months before your 65th birthday and continues for three months after it. Medicare will let you know when you are eligible, in most cases, by sending you information.
You may be able to enroll in Medicare after this time. However, you may pay a penalty if you do so.
You have an eligible disability
Some people under the age of 65 qualify for Medicare. That means that you have met the requirements under federal laws that show you have a disability that prevents you from working. There are several steps in getting approved for disability coverage through Medicare. One of them is having a statement from your doctor that confirms that you meet the requirements.
You will need to formally apply for Medicare disability coverage. If you are awarded it, you are then eligible to receive Medicare benefits. That includes signing up for Medicare Part D coverage.
You have end stage renal disease
If you have end stage renal disease, a type of kidney disease in advanced stages, you may also qualify for Medicare coverage with that diagnosis. You will still need to apply to Medicare for coverage and receive approval in order to obtain Medicare Part D coverage. You can qualify for benefits like this between one and three months of receiving a diagnosis of this condition. If you receive a kidney transplant, you may be eligible for this coverage as well.
You have ALS
If you’ve been diagnosed with ALS, also known as Lou Gehrig’s disease, you may also qualify for Medicare even if you have not reached the age of 65. If you qualify for Medicare, you are then able to obtain Medicare Part D coverage. You will be eligible for this coverage as soon as you receive a diagnosis of ALS and it is accepted.
How Do You Get Prescription Drug Coverage with Medicare?
Prescription drug coverage becomes available as soon as you qualify for Medicare. However, just having Medicare prescription drug eligibility does not mean you automatically get it. You have to choose a policy for your drug coverage.
A standalone policy
One way to do this is to purchase a standalone prescription drug plan. If you have Original Medicare (Part A and Part B), this is the best route to getting prescription drug coverage. You will need to compare policies to determine which one fits your needs.
Medicare Advantage Plan
If you decide to choose a Medicare Advantage Plan instead of Original Medicare, you will likely obtain prescription drug coverage. Not all Medicare Advantage Plans include prescription drug coverage. You just need to purchase a plan that includes it.
What If You Qualify for Medicaid?
If you are enrolled in Medicaid health insurance, which is a type of need based health insurance policy, and you are eligible for Medicare, you will automatically receive a Medicare prescription drug plan. This will allow you to have coverage for most of your medications through the plan. Keep in mind that Medicaid is run by states and that sometimes means the requirements and eligibility is a bit different.
What Will Medicare Drug Insurance Cover?
One of the key things to remember about prescription drug coverage is that it is not a standard policy. That is, the drug coverage you obtain is dependent on the specific prescription drug plans you select. Policies will differ in various ways, not just by the actual cost of policies but also by what drugs are covered, what the initial coverage limit is, and even brand name drugs available.
When choosing prescription drug coverage for your needs, you will need to consider what type of medications you need. Then, choose a Medicare drug plan that covers those costs.
Even the least expensive Medicare drug plan will provide coverage for most generic and brand name drugs that people need. They are designed to ensure that most drugs, including insulin preparations, are covered by those who have prior authorization.
Also notable is that your prescription drug insurance must cover some or all of the costs associated with specific types of drugs. That includes:
- All anticancer drugs, unless these medications fall under your Medicare Part B coverage
- Most mental health drugs, including antidepressants
- Antipsychotic medications
- All treatments for HIV/AIDs
- All immunosuppressant medications deemed necessary
- Anticonvulsant medications for those who have seizure disorders
Total drug costs will vary by the insurance company. Keep in mind that you should do some research before choosing any type of policy and Part D plans. Compare plans to determine:
- What type of coverage do they offer
- Any quantity limitations
- All out of pocket costs associated with your needs
- What exclusions or limitations are presented by drug manufacturers
- The total drug costs to you
If you need to obtain medications that are rare or your doctor is using them off plan, which means that they may not follow the plan’s formulary in terms of when they are prescribed or covered, it is very important to factor this into your medication costs. In some situations, this can add a significant amount of cost, or you may not be able to get coverage from the insurance company. Talk to your doctor about any concerns you have with Part D plans in these situations.
Considerations for vaccinations
Part D plans must also provide full coverage for vaccinations. This includes all recommended vaccinations for you. Some of these vaccines and medication costs may fall under Medicare Part B insurance, which is a part of Traditional Medicare. That is common if they are a type of preventative care service provided. Examples of these include your annual flu shot, COVID-19 vaccinations, and pneumococcal vaccinations.
What Drugs Are Not Covered Under Medicare Part D Plans?
There are some situations where the prescription drug insurance that you have does not cover some medications. That does not mean it is not credible drug coverage.
Some medications are simply not covered by all Medicare Part D plans. That could be due to the plan’s formulary, or it may be related to some type of quantity limit. There may be limitations based on medical necessity, safety, or cost.
You should know about these Medicare Part D restrictions and limitations
Many types of prescription drug insurance coverage will have limitations related to them. That is true for a Medicare Part D plan as well. In short, your Medicare Part D plan may require some of the following:
In some situations, you may need prior authorization for the medication before it is covered under your Medicare Part D plan. For example, this is common when the medication is typically only approved for some conditions. They also want to be sure there is a prescription drug benefit – is this medication recommended and used for the conditions you are diagnosed with? If the medication is not medically necessary, it may not receive full coverage under the Medicare Part D policy.
Stepped up therapy
Many offer drug coverage for most medications, but you may need to work through several steps before you qualify for that specific coverage. For example, you may have to try lower costing generic drugs before you can obtain a brand name drug. If the cheaper medication does not fit your needs or achieve the desired result, then you may be able to step up to a more expensive option. The Part D plans do not always cover whatever your doctor prescribes.
Quantity limits are sometimes a factor for Medicare Part D plans and Medicaid services. You may be limited to a specific amount of the medication prescribed. This is often done to reduce costs but also because it may be unsafe or unproven to use a higher amount of the medication.
What If the Medications You Need Are Not Included in the Medical Part D Plan?
If your Part D plan does not cover the medication you need, there are a few things to consider.
First, if you are in the enrollment period now and trying to choose a Medicare supplement plan to meet your needs, be sure that you use the various tools provided to help you compare plans to find out if the medication you take is covered. When you reach Medicare Part D eligibility, you will be given access to information about just about any medication you need and whether the Medical supplement covers the cost.
Second, you may be able to appeal. For example, if generic drugs are not working for you, or your doctor believes you have a specific need for some reason, you can appeal the decision to not cover the drugs you need. For example, your doctor can submit a formal request to the Social Security Administration about the drug coverage rule. They can then help you to get the cost of medication covered to lower your out of pocket costs.
You can pay out of pocket costs for the medication. If you have the financial means to do so, you can decide to pay for the medications you need out of pocket when your D Plan does not cover it. That can be expensive, though, and does not fit most people’s needs.
When Can You Enroll in Medicare Part D Coverage?
There are several enrollment windows you should know about as Medicare beneficiaries. First, you know that you need to be approved for Medicare Part D plans based on your age, health, or disability. Then, you will receive information from Medicare about your ability to enroll in Medicare Part D. There are several times when you will need to consider your Medicare drug coverage and make decisions about which prescription drug plan and private insurance companies you want to work with for cost sharing.
When Is the Medicare Initial Enrollment Period?
The initial enrollment period refers to the first time you qualify for Medicare Part D plans. This is a 7-month enrollment period. It is when you will first be eligible as a Medicare beneficiary, whether that is through a Medicare Advantage Plan or Traditional Medicare. This begins three months before your 65th birthday, including the month of your birthday, and then extends for three months after your birthday. During this time, you are eligible for Medicare most commonly (remember, there are other times when you may be able to get a Medicare Part D Prescription plan).
There are other times of the year when you can be eligible for Medicare. This is when you can switch to another Part D plan. This is beyond the initial enrollment period.
October 15 to December 7
This is the official open enrollment period that is available to all Medicare beneficiaries. During this time, you can join a new Medicare drug plan, which may mean switching to another Medicare Part D prescription plan that better fits your needs.
This open enrollment period is also when you can make the decision to switch from traditional Medicare to a Medicare Advantage Plan if you would like to do so. During the enrollment period, you are able to compare plans and choose which plan best fits your needs. Medicare Part D enrollment during this period of time allows your new Medicare Part D prescription policy to go into effect on January 1 of the following year.
Also note that, during this period, you are eligible to make a switch to another plan if your current plan does not have 5 stars. The 5 star rating for Medicare drug coverage plans helps to give you confidence that the policy meets your needs. If your plan does not have 5 stars and you want to switch, you can do so during Medicare Part D enrollment during this time.
January 1 to March 31
The next opportunity to update your Medicare Part D prescription plan is at the start of the year. This is the Medicare Advantage Open Enrollment period. This open enrollment period applies to those who are with a Medicare Advantage plan right now. If you want to leave that plan and enroll in a Medicare Part D plan with traditional Medicare, you can do that during this enrollment period. You may wish to do this if your monthly premium is too high or you want to choose drug plans that offer more of the coverage you need.
Special Enrollment Period
You may have heard about the special enrollment period. This is another time when you may be able to enroll in Medicare and drug plans in some situations. The Medicare Part D plan eligibility occurs when you enter a specific special enrollment period (SEP).
There are various times when you may receive Medicare Part D eligibility. For example, you may be moving. If you are moving outside of where the prescription drug benefit is available to you, that qualifies as a special enrollment period. Otherwise, your current Medicare Part D prescription drug coverage would not apply to your needs and cost sharing is eliminated. If you are moving, request this type of open enrollment option.
Another time when you may wish to consider a special enrollment period is when you are moving into a skilled nursing facility or nursing home. This may alter the type of care you need, and your existing drug plans may not meet your needs, but other Part D plans will. This special enrollment period is beyond the Medicare annual enrollment period. It can occur at any time of the year when you meet Medicare Part D eligibility due to a special circumstance.
December 8 through November 30 of the following year
The Social Security Administration does allow for some people to enroll in Medicare Part D after the Medicare annual enrollment period ends (which typically ends on December 7th each year). This is a one time 5-star SEP period. That means that you can enroll in Medicare Part D plans during this period of time if they are a 5-star rating plan from Medicare.
When you enroll in Medicare Part B, the goal is to ensure you do so when you are eligible. If you are unsure of when that is, be sure to reach out for help from the Social Security Administration about being eligible for Medicare or a Medicare prescription drug plan. Don’t assume you have coverage.
What Is the Late Enrollment Penalty for Medicare Part D?
You may be charged a late enrollment penalty if you do not sign up for Medicare Part D prescription drug coverage when you are eligible to do so. When you achieve Medicare Part D eligibility, and you do not have health insurance coverage from another location, Medicare expects you to sign up for coverage. If you do not enroll in Medicare, you may be faced with some concerns.
First, the late enrollment penalty applies to you if you do not have credible prescription drug coverage within 63 days of when your Medicare prescription drug eligibility period began.
The late enrollment penalty is based on the amount of time that you did not have the necessary prescription drug coverage.
This late enrollment penalty will remain in place throughout your lifetime. That is why it is so important to sign up for you to sign up for prescription drug coverage to cover your prescription drugs when you are eligible to do so for a Medicare Advantage plan or traditional Medicare prescription drug plans.
Prescription drug coverage can help to lower the costs of the medications you need. Medicare Advantage Plans and other Medicare prescription drug coverage are nearly always worthwhile. And, if you do not have creditable prescription drug coverage, that could mean you pay too much. Instead, be sure to learn about Medicare Part D eligibility and get into a plan that fits your needs.