Medicare Part D offers optional drug coverage.
Traditional Medicare, which is government-sponsored health insurance for individuals age 65 and over as well as the disabled, includes Part A, which covers hospitalization, and Part B, which covers doctor visits. Newer Medicare programs include Part C that offers Part A and Part B coverage through private insurers, and Part D, which covers prescription drugs. If you choose to enroll in Part D after turning 65, you can expect to pay a penalty in addition to your regular premium.
Prescription Drug Options
You can enroll in Medicare Part D to obtain prescription drug coverage, which is not offered under Medicare Part A or Part B. If you have a Medicare Advantage plan (Medicare Part C) instead of Parts A and B, prescription drug coverage may be covered under the plan. Medicare Part D may sometimes work in conjunction with other types of prescription drug plans you may already have, such as employer-sponsored health care coverage or VA benefits.
Enrollment Period
The best time to enroll in Medicare Part D is when you first become eligible for Medicare upon turning 65. You must be enrolled in Medicare Parts A and B to be eligible for Part D enrollment. You can also join a Part D plan, switch from one plan to another or drop Part D completely during the annual open enrollment period. As of 2011, the open enrollment period lasts from October 15 to December 7, and any changes you make will go into effect on January 1 of the following year.
Late Enrollment
If you choose not to enroll in Part D upon turning 65, you can still do so at a later time, but you will need to pay a penalty. You can expect to pay roughly 1 percent of the average national Part D premium per each month you were not enrolled or 12 percent per year. The penalty will stay in effect for as long as you are enrolled in Part D. If you enroll late, you can only do so during the annual open enrollment period.
Creditable Coverage
You can avoid paying the Part D penalty if you already have what is known as "creditable coverage." This is defined as previous coverage that meets the minimum standards required for any Part D plan. In general, coverage is creditable if it pays at least 60 percent of the participant's cost for generic or brand name drugs, and coverage must be available at a variety of retail drug outlets. Individuals having creditable coverage can switch to Part D without penalty during the annual open enrollment period.
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