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Medicare Part D Eligibility

Once Medicare Parts A and B kick in, whether you have one or both, your coverage sits in two broad categories: hospitalization, and medical equipment and supplies. What is noticeably absent from those is prescription drug costs. Medicare Part D is an essential part of your complete healthcare package, however it is an optional plan that you have to enroll in. Thankfully, for those seeking to add Medicare Part D, eligibility is simple. 

Qualifying for Medicare Part D

Medicare Part D eligibility begins with having Medicare Part A and/or Part B. However, qualifying, obtaining, and changing a Medicare Part D plan goes beyond that because of the rules surrounding enrollment periods. (You might also qualify for needs-based coverage, which has its own set of guidelines and enrollment rules.) You also want to be sure you live in the service area for the plan you want. Steps to enrolling include:

  • You can enroll during your Initial Enrollment Period, or IEP, which spans the three months before you turn 65, your birth month, and the three months after. 
  • You may enroll for a standalone Medicare Part D plan during the AEP or annual election period, which goes from October 15th to December 7th every year. 
  • If you leave an employer plan you have two months to enroll in a Part D plan.
  • If you move out of your current plan’s service area (typically out of state) then you will have a two month window to pick up a new drug plan in your new service area.
  • If you qualify for NJ PAAD or Senior Gold you can change your drug plan at any time during the year.
  • If you qualify for assistance with medications through the federal government you can enroll in a plan once every quarter.
  • If your state has a 5 Star rated Part D plan you can enroll in that plan any time during the year.  As of 2020 New Jersey does not have a 5 Star rated Part D plan.

You can elect to not have a prescription drug plan, however if you do not have other creditable drug coverage, such as VA Benefits or employer benefits, you will be penalized for not having drug insurance.  This is called a Late Enrollment Penalty. Once you enroll in a prescription drug plan in the future you will have to pay the penalty on top of the monthly fee for the plan. This penalty is calculated based on however many months you did not have drug coverage times 10% of the average monthly fee for a drug plan.  The penalty stays with you for the rest of your life.

Additionally if you miss the Medicare Part D eligibility periods when you are first qualifying for Medicare you may have to wait until the Annual Election Period (Oct. 15th-Dec 7th) with an effective date of Jan. 1st of the next year.  If you are prescribed a medication in April without drug insurance you may not be eligible to enroll in a Part D drug plan until January and won’t have insurance for that medication until then.

Medicare Part D: Coverage and Costs 

There is no public option for Medicare Part D, and it is offered solely through private insurance companies. All companies are required to offer at least one plan that fits the standard minimum benefit, but there are likely going to be options with more benefits (such as having no deductible). Patients may be willing to pay more per month to have a smaller deductible (the minimum amount you must pay before your insurance company pays for a claim) or none at all. For instance, a plan that costs $13 a month might have a $400 annual deductible that must be paid before insurance will kick in, but someone willing to pay $75 a month for their plan might not have to deal with a deductible. 

There are some drugs that Medicare Part D won't cover. These include: 

  • Non-prescription, over-the-counter medication.
  • Drugs sold outside the United States. 
  • Drugs that are not approved by the FDA (Federal Drug Administration).
  • Drugs that are not used for a medically-accepted purpose. 
  • Medications that you don't administer yourself, such as vaccinations, cancer treatments, and injectable medications. These are usually covered by either Medicare Part B or Medicare Advantage (Part C). The exception to this would be insulin for diabetes (unless it is administered via an external insulin pump, which should be covered via Part B). 

Your prescription drug coverage  can be through a stand alone policy (Part D)or included in your Medicare Advantage plan (Part C).  If you enroll in a Medicare Advantage plan you can not add on a separate Part D plan for medications.  

Whether you choose a standalone Medicare Part D plan or choose a Medicare Advantage (Part C) plan that includes prescription drug coverage, consult with an agent like those at New Jersey Medicare Brokers. These free consultations are with experts on local Medicare plans, offering unbiased information to help you navigate the many options available to you.

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