Medicare Part D Plans: Eligibility & Enrollment
When can I enroll in a Medicare Part D plan?
You can join a plan if you are entitled to Medicare Part A and/or enrolled in Medicare Part B and live in the service area. Specific enrollment periods for when you can enroll include:
- Initial Enrollment Period (IEP)- All individuals have an IEP. If you are just turning age 65, you can enroll in a Part D plan during the month of your 65th birthday, as well as three months before and after your birthday month.
- Annual Election Period (AEP)- The AEP occurs every fall. The AEP for 2014 runs from October 15 through December 7, 2013. You can make as many plan changes as you want during the AEP, but the last election you make during this period becomes effective on January 1, 2014.
- Special Enrollment Periods (SEPs)- SEPs allow individuals in specific situations (for instance, moving into a new service area, losing employer group coverage, or a benefit plan termination by CMS) to make changes to their current Medicare benefit plan outside of the normal enrollment periods. SEPs exist year-round for dual-eligible and LIS individuals or those in Chronic Care Special Needs plans.
Open Enrollment Items to Consider
- If you are enrolled in a Medicare Advantage coordinated care plan (like an HMO or PPO) or a Medicare Advantage private fee-for-service (PFFS) plan that includes Medicare prescription drugs, you may not enroll in a Part D plan unless you disenroll from the HMO, PPO or MA-PFFS plan.
- You may enroll in a Part D plan if you are in a private fee-for-service plan that does not provide Medicare prescription drug coverage, or a Medicare Advantage Medical Savings Account (MSA). You can also enroll in a Part D plan if you are enrolled in an 1876 Cost Plan.
- You should consider if you have other sources of prescription drug coverage -for example, benefits from a current or former employer or union. If you have questions, check with your employer or union. However, if that drug coverage is not at least as good as standard Medicare prescription drug coverage (creditable coverage) you may have to pay a penalty.
Is there a penalty for signing up late?
Yes. You may pay a late enrollment penalty if you did not enroll in a plan offering Medicare Part D coverage when you first became eligible for this drug benefit or had a break in coverage for 63 days or more.
Medicare will determine the amount of the penalty. The penalty is 1% for every month that you did not have credible coverage. Medicare will calculate the average monthly premium for all Medicare drug plans in the nation and multiply the 1% per month times this average.
You will not have to pay a premium penalty for late enrollment in certain situations, for example, if you are receiving Extra Help. There are three important things to understand about the monthly premium penalty:
- The penalty will change every year because the average national premium calculated by Medicare can change each year.
- You will continue to pay a penalty every month as long as you are enrolled in a plan that has Medicare Part D drug benefits.
- The late enrollment penalty will reset when you turn age 65 if you are currently under 65 and have a Medicare Part D drug benefit. After age 65, your penalty will be based only on the months that you do not have coverage after your initial enrollment.
Will my costs change after I enroll?
The premium, deductible and copay/coinsurance for the plan you are enrolled in cannot change during the plan year. (January 1st through December 31st), but may change from one plan year to the next.
However, a drug may move from one tier (cost group) to a different tier (cost group) during the year. These changes must be approved by Medicare. Your copay or coinsurance could change, depending upon the tier change. (There are rules that plans must follow if a drug is moved to a higher tier and has a more expensive copay/coinsurance.)
Benefits, formulary, pharmacy network, premium, copay/coinsurance may change from one plan year to the next plan year.
What if I have drug coverage from my job or retiree benefits?
The coverage offered by your employer may be better than the standard Medicare drug benefit. You should have received notice from your former or current employer explaining whether your coverage is "creditable," meaning it is at least as good as the standard Medicare prescription drug benefit. If you did not receive this information, you should contact your employer.
If your drug plan is "creditable," you may keep your employer plan and you will not pay a late enrollment penalty. You may also enroll in a new Medicare Part D plan. Check with your employer to understand the impact that the joining a new plan will have on your coverage. Be sure to evaluate the benefits offered under your employer plan with the benefits offered by Medicare drug plans in your area to be sure you choose the best plan for your needs.
If your employer plan does not qualify as "creditable coverage," you may pay a late enrollment penalty if you do not enroll in a plan offering Medicare Part D coverage when you first become eligible for this drug benefit, or if you have a break in coverage for 63 days or more. Your current or former employer or union must tell you if your present plan may change if you enroll in a Medicare Part D plan.
I have prescription drug coverage from an employer/union plan. Should I apply for Extra Help?
Even with employer/union coverage, individuals with limited income and resources may qualify for Extra Help. If you have employer/union coverage you should talk with your plan or benefits administrator to find out how your employer/union coverage will work with Medicare prescription drug coverage.
If you qualify for Extra Help, you should also contact your State's Health Insurance Assistance Program (SHIP). Customer service representatives at 1-800-MEDICARE (1-800-633-4227) (TTY/TDD users call 1-877-486-2048) 24 hours a day, 7 days a week, can provide the SHIP number for your home state.
A SHIP counselor can provide personalized assistance to help you decide whether it is better to keep the employer or union drug coverage or get Medicare prescription drug coverage.
What if I have Medigap coverage?
If you have a Medigap (Medicare Supplement Insurance) policy that includes prescription drug coverage, you must contact your Medigap Issuer to let them know that you have joined a Medicare Part D plan.
If you decide to keep your current Medigap policy, your Medigap issuer will remove the prescription drug coverage portion from your Medigap policy. This will occur as of the effective date of your Medicare Part D coverage. Your issuer will adjust your premium.
Call your Medigap issuer for details. If you or your spouse has, or is able to get, employer group coverage, you should talk to your employer to find out how your benefits will be affected if you join a Part D plan. Get this information before you decide to enroll.
What if I have veterans or military retiree drug benefits?
You will not pay a penalty if you later lose this coverage and switch to a Medicare drug plan within 63 days. But if your income is low enough to qualify for Extra Help it is worth comparing those benefits with what you have now.
What if I receive prescription drug coverage through a Medicare Advantage plan?
If you are enrolled in a Medicare Advantage plan such as an HMO or PPO that includes prescription drug coverage, you may not enroll in a Medicare Part D plan unless you disenroll from the Medicare Advantage plan.
What if I purchase my prescription drugs from outside of the United States?
Medicare plans will not cover drugs purchased outside the United States.
Are there programs to help people with limited incomes?
There are two basic kinds of assistance to help people in paying for their prescription drugs:
- Extra Help from Medicare - This is commonly referred to as Low Income Subsidy or LIS. If your annual income and resources are below certain levels, you can qualify for this help. If you qualify for both Medicaid and Medicare, you automatically qualify for financial help and are fully subsidized by Medicare. Learn more about this program by calling 1-800-MEDICARE (1-800-633-4227). TTY/TTD users should call 1-877-486-2048. You can also submit an application online at www.ssa.gov.
- State Pharmacy Assistance Programs (SPAPs) - Many states help you pay for your prescription drugs through State Pharmacy Assistance Programs based on financial need, age, or medical condition. Since states can have different rules, check with your State Health Insurance Assistance Program.