Medicare Part D: Key takeaways
- The only source of prescription drug plans is through private insurance companies.
- Most Medicare Advantage plans include prescription drug coverage.
- You can also purchase a stand-alone prescription drug plan if you’re enrolled in a PFFS or MSA plan that doesn’t include prescription coverage.
- Your first opportunity to enroll in Part D is when you’re initially eligible for Medicare.
- You have the option of selecting an Advantage plan and using that in place of Medicare A, B, and D.
- In most cases, enrollment outside of your initial enrollment period is limited to an annual enrollment period.
- If you don’t enroll in prescription drug coverage during your initial open enrollment and then enroll during a subsequent annual enrollment period, a late enrollment penalty will be added to your premium.
As of September 2021, more than 49 million Medicare beneficiaries had prescription drug coverage through Medicare Part D. The total is split nearly equally between those who have Part D coverage in conjunction with a Medicare Advantage plan (ie, a Medicare Advantage prescription drug plan — MAPD), and those who have stand-alone Part D prescription drug plans (PDPs), most of which are purchased to supplement Original Medicare.
But the balance has started to shift towards MAPD coverage, and it has recently surpassed the number of people with stand-alone PDP coverage (as of September 2021, there were about 24.1 million people with stand-alone PDP coverage and about 24.9 million with MAPD coverage).
How do Medicare enrollees get Medicare Part D prescription drug coverage?
All prescription drug coverage for Medicare beneficiaries is provided by private insurance companies, as Medicare A and B don’t cover outpatient prescriptions. Most Medicare Advantage plans do include prescription drug coverage (89% do so for 2022).
If you’re enrolled in a Medicare Savings Account (MSA) plan or Private Fee-for-Service (PFFS) plan that doesn’t include Part D coverage, you have the option to enroll in a stand-alone Part D plan to supplement your coverage.
However, a stand-alone Medicare Part D plan cannot be used to supplement a Medicare Advantage plan that doesn’t include prescription drug benefits. Medicare Advantage enrollees who want prescription drug benefits need to enroll in a Medicare Advantage plan that offers them.
When and how do I enroll in Medicare Part D?
The first opportunity for Medicare Part D enrollment is when you’re initially eligible for Medicare – during the seven-month period beginning three months before the month you turn 65.
If you enroll prior to the month you turn 65, your prescription drug coverage will begin the first of the month you turn 65. If you enroll during the month you turn 65 or one of the three following months, your prescription coverage effective date will be delayed — it will not be retroactive to the month you turned 65.
If you enrolled in Medicare due to a disability, you may enroll during a seven-month window beginning three months prior to your 25th month of disability. If you enroll in the three months prior to your 25th month of disability, your coverage will begin the first day of the 25th month. If you enroll during the 25th, 26th, 27th, or 28th month of disability, your coverage will begin the first of the month after you enroll (note that the effective date rules are different if a person is enrolling in Medicare due to a diagnosis of ALS or end-stage renal disease).
In both of these cases – whether you’re turning 65 or are eligible for Medicare because of a disability — you have the option of selecting a Medicare Advantage plan that includes prescription drug coverage, and using that in place of Medicare A, B, and D. The enrollment periods and rules are the same as those described above for stand-alone Medicare Part D plans.
After you’ve chosen from the various PDP offerings, you can enroll by:
- calling 1-800-MEDICARE to locate PDPs in your area
- logging in to Medicare’s Prescription Drug Plan Enrollment Center
- filling out the paperwork sent by mail from Medicare, or
- calling the private insurer with the specific PDP you want to join.
Once you apply for Medicare Part D, it can take a few weeks for your membership card to arrive. During that time, if you need prescription medications, most pharmacies will accept the initial letter you received from Medicare acknowledging your upcoming membership, or an enrollment confirmation number.