MEDICARE PART D
HOW TO GET DRUG COVERAGE
Medicare prescription drug coverage is an optional benefit. Medicare offers prescription drug coverage to everyone with Medicare. If you decide not to get Medicare drug coverage when you're first eligible, you'll likely pay a LATE PAYMENT PENALTY… if you join late.
Generally, you'll pay this penalty for as long as you have Medicare prescription drug coverage.
To get Medicare drug coverage, you must join a plan approved by Medicare that offers Medicare drug coverage. Each plan can vary in cost and drugs covered.
MEDICARE PART D QUESTIONS
2 WAYS TO GET DRUG COVERAGE
- Medicare Prescription Drug Plan (Part D). These plans (sometimes called "PDPs") add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.
- Medicare Advantage Plan (Part C) (like an HMO or PPO) or other Medicare health plan that offers Medicare prescription drug coverage. You get all of your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.” You must have Part A and Part B to join a Medicare Advantage Plan.
CONSIDERING ALL YOUR DRUG COVERAGE CHOICES
Before you make a decision, you can not have two drug plans. For example, you may have drug coverage from an employer or union, TRICARE, the Department of Veterans Affairs (VA), the Indian Health Service, or a Medicare Supplement Insurance (Medigap) policy. Compare your current coverage to Medicare drug coverage. The drug coverage you already have may change because of Medicare drug coverage, so consider all your coverage options.
If you have (or are eligible for) other types of drug coverage, read all the materials you get from your insurer or plan provider. Talk to your benefits administrator, insurer, or plan provider before you make any changes to your current coverage.
5 THINGS TO LOOK FOR WHEN CHOOSING MEDICARE DRUG COVERAGE
-Look at drug plans that include your drugs on their formulary (a list of prescription drugs covered by a drug plan). Then, compare costs.
-Look at plans offering coverage in the coverage gap, and then check with those plans to make sure they cover your drugs in the gap.
-Look at plans with no or a low deductible, or with additional coverage in the coverage gap.
-Look at plans with “tiers” that charge you nothing or low copayments for generic prescriptions.
-Look at plans with a low monthly premium for drug coverage. If you need prescriptions in the future, all plans still must cover most drugs used by people with Medicare.
MONTHLY PREMIUM FOR DRUG PLANS
Most Medicare Prescription Drug Plans charge a monthly fee that varies by plan. You pay this in addition to the Medicare Part B premium. If you join a Medicare Advantage Plan (Part C) or Medicare Cost Plan that includes Medicare prescription drug coverage, the plan's monthly premium may include an amount for drug coverage.
The same insurance company may offer Medigap policies and Medicare Prescription Drug Plans.
If you join a Medigap policy and a Medicare drug plan offered by the same company, you may need to make 2 separate premium payments for your coverage. Contact your insurance company for more details.
GETTING YOUR PREMIUM AUTOMATICALLY DEDUCTED
Contact your drug plan (not Social Security) if you want your premium deducted from your monthly Social Security payment. Your first deduction will usually take 3 months to start, and 3 months of premiums will likely be deducted at once.
After that, only one premium will be deducted each month. You may also see a delay in premiums being withheld if you switch plans. If you want to stop premium deductions and get billed directly, contact your drug plan.
PART D COST AND PENALTY
How much does Part D cost?
Most people only pay their Part D premium. If you don't sign up for Part D when you're first eligible, you may have to pay a Part D late enrollment penalty.
How much is the Part D penalty?
The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage.
Medicare calculates the penalty by multiplying 1% of the "national base beneficiary premium" ($33.19 in 2019) times the number of full, uncovered months you didn't have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium.
The national base beneficiary premium may increase each year, so your penalty amount may also increase each year.
If your modified adjusted gross income is above a certain amount, you may pay a Part D income-related monthly adjustment amount (Part D-IRMAA). Medicare uses the modified adjusted gross income reported on your IRS tax return from 2 years ago (the most recent tax return information provided to Social Security by the IRS). You'll pay the Part D-IRMAA amount in addition to your monthly plan premium, and this extra amount is paid directly to Medicare, not to your plan. The chart below lists the extra amount costs by income.
Social Security will contact you if you have to pay Part D-IRMAA, based on your income. The amount you pay can change each year. If you have to pay a higher amount for your Part D premium and you disagree (for example, if your income goes down), If you have questions about your Medicare prescription drug coverage, contact your plan.
The extra amount you have to pay isn’t part of your plan premium. You don’t pay the extra amount to your plan. Most people have the extra amount taken from their Social Security check. If the amount isn’t taken from your check, you’ll get a bill from Medicare or the Railroad Retirement Board. You must pay this amount to keep your Part D coverage. You’ll also have to pay this extra amount if you’re in a Medicare Advantage Plan that includes drug coverage.
If Social Security notifies you about paying a higher amount for your Part D coverage, you’re required by law to pay the Part D-Income Related Monthly Adjustment Amount (Part D-IRMAA). If you don’t pay the Part D-IRMAA, you’ll lose your Part D coverage.
EMPLOYER/UNION COVERAGE & PART D-IRMAA
You pay your Part D-IRMAA directly to Medicare, not to your plan or employer.
You’re required to pay the Part D-IRMAA, even if your employer or a third party (like a teacher’s union or a retirement system) pays for your Part D plan premiums. If you don’t pay the Part D-IRMAA and get disenrolled, you may also lose your retirement coverage and you may not be able to get it back.