Whether or not you should enroll in the Medicare drug benefit (Part D) depends on whether you have drug coverage, your income, and how much you currently spend on drugs.
If you have drug coverage now that is at least as good as or better than Medicare's basic drug benefit ("creditable"), and you like it, you probably should keep it. If you join a Medicare private drug plan, you may lose your creditable drug coverage and be unable to get it back if you want it later.
If you have creditable coverage you can join a Medicare private drug plan later without penalty if you need it. The company that provides your drug benefits—such as an insurance company, employer or state program—should send you written notification once a year telling you whether your coverage is creditable. Be aware that this information may not come as a separate piece of mail; it can be included with other information, for example, as part of a plan newsletter.
If you are not notified whether your coverage is creditable, call and ask for their answer in writing. You will not have to pay a penalty if you can show you received inadequate information about whether your drug coverage was creditable.
If you have coverage from a current employer or former employer (retiree coverage), you should ask your human resources department, benefits manager or plan if and how this coverage will work with Part D. Some employer plans do not work with Part D at all and if you join a Part D plan, you could lose your employer coverage and not be able to get it back.
If you have no drug coverage, or have drug coverage that is not as good as Medicare's, you need to think about whether the Medicare drug benefit will help you. To decide if the Medicare drug benefit will help you, here are some questions to consider:
- Does my state offer a pharmaceutical assistance program (SPAP)? Many state assistance programs coordinate with the Medicare prescription drug benefit and help with the costs of Part D coverage (many of these programs require you to get Part D).
A few states have programs that do not require that you join Part D and offer good coverage that is creditable. You can delay in enrolling in the Medicare drug benefit without penalty in these states. If your state’s SPAP is creditable they must send you a written notification. If you do not receive a notification, but believe your SPAP is creditable you should call and request the information in writing.
Check out the MI Extra below to find out if your state has an SPAP and how it works.
State Pharmaceutical Assistance Programs (SPAPs)
- Can I get help paying for Medicare drug coverage if my income is low? Yes, if your income is less than about $1,459 a month in 2014($1,966 for couples). If this is the case, you should enroll in the drug benefit because the government will pay most of your drug costs if you qualify for Extra Help, the federal program that helps pay for most of the costs of the Medicare drug benefit.
If you qualify for Extra Help and sign up for a Medicare private drug plan you will not have to pay a premium penalty.
- Would a Medicare drug plan save me money? Make a list of your prescriptions, the dosages, and what you pay each month. Then compare what you pay now with what you would pay if you enrolled in a plan (including the monthly premium).
- If you have high drug costs, you may save money through a Medicare drug plan. But make sure the plan you choose covers the drugs you need and works at the pharmacies you use most frequently.
- If you have low drug costs, having Medicare drug coverage could cost you more now, but could protect you from high drug costs in the future. There may be a Medicare drug plan in your area with a low monthly premium you can afford.
If you do not have creditable coverage and do not enroll in the Medicare drug benefit when you are first eligible, you may pay a penalty if you enroll later. The penalty will be small. The penalty is 1% of the national base beneficiary premium for each month that you do not have coverage. In 2014 that would be 1% of $32.42 . Usually, you will not be able to enroll until the next enrollment period (October 15 - December 7). If you enroll during this period, your coverage will become effective on January 1.
If you do not have creditable coverage and are not eligible for Extra Help, you will need to wait until for Fall Open Enrollment (sometimes called the Annual Coordinated Election Period – ACEP) to sign up for a drug plan. If your drug needs change during the course of the year, you will not have drug coverage. Still, there may be other low-cost ways to get the drugs you need. To find out, call your State Health Insurance Assistance Program (call 800-MEDICARE for phone number).
If you are eligible for Extra Help, you will be granted a Special Enrollment Period to sign up for a Medicare prescription drug plan. You will also not have to pay a penalty for late enrollment, if you did not have creditable coverage. You may also qualify for a Special Enrollment Period for other reasons.