Medicare Part D – Overview, eligibility, coverage, and enrollment

Overview and eligibility

Medicare Part D is the prescription drug part of the Medicare program. It came into being as the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (the Medicare Act of 2003). Part D, also known as a Prescription Drug Plan (PDP), is a voluntary drug plan that is available to all Medicare recipients who have either Part A or Part B. It is available through private insurers that are approved by and contracted with Medicare.

Essentially, there are 2 ways to get prescription drug coverage under Medicare:

  1. Stand-alone drug coverage plans can be added to the basic, Original Medicare. They can also be added to certain Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.
  2. HMO and PPO Medicare Advantage plans include prescription drug coverage in their plans. Remember, you must have both Part A and Part B in order to qualify for a Medicare Advantage plan.

Coverage

Most insurance companies offering Part D are allowed to design their own drug plans, so coverage will vary from plan to plan. Specific coverages are extensive and complicated, but in general the “basic Part D” meets the following conditions:

  • The annual deductible can’t be more than $310 for 2011.
  • The plan must cover at least two drugs in each drug class.
  • The plan must cover substantially all drugs in these six categories: antidepressants, antipsychotics, anticonvulsants, antiretrovirals (AIDS treatments), anticancer drugs, and immunosuppressants.
  • Members must be able to seek an exception if a drug is medically necessary but not covered under the plan.
  • Plans must have a network of pharmacies that provide convenient access.
  • Lists of covered drugs and pharmacy networks must be readily available to members.
  • Plans must work with nursing homes.
  • Plans must help transition a member’s current drug coverage.
  • Plans must offer catastrophic coverage that is at least as good as the coverage outlined in the 2003 Medicare Act.

(from Medicare.org)

 

Enrollment

 

Medicare Part D has both standard enrollment periods and special enrollments. There are also late enrollment fees that Medicare participants may encounter.

Those signing up for the first time can do it in one of 4 different ways:

  1. Sign up during the Initial Enrollment Period (IEP). As mentioned in previous articles, the initial enrollment period for most individuals begins at 65. If you’re eligible when you turn 65, you can sign up during the 7-month period that begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.
  2. You can join, switch, or drop a prescription drug plan during the Annual Coordinated Election Period (AEP). This period runs from October 5th to December 7th. Any changes made during this time will take effect on January 1st of the following year.
  3. If you get Medicare due to a disability.
  4. If you get Extra Help, a special program offered by Medicare and Social Security for participants with low income and limited resources

 

Generally, participants are required to stay with a plan for a calendar year, but sometimes individuals with extenuating circumstances may be able to join, switch, or drop their plans during Special Enrollment Periods (SEP). If you move out of your plan’s coverage area, lose other prescription drug coverage, or if you live in a nursing home or personal care home, you may qualify for SEP.

Late enrollment penalty:

If your initial enrollment period lapses for 63 days or more in a row, when you do not have Part D or another approved medicare prescription drug coverage plan, you will be charged a late enrollment penalty. This penalty is approximately 1% of the average national premium, for each month that you delay enrolling in a Part D. This amount is rounded to the nearest $.10 and added to your monthly premium.

 

Sources used in this article

http://www.medicare.gov/navigation/medicare-basics/medicare-benefits/part-d.aspx#msip

http://www.medicare.org/medicare-basics/part-d.html

http://www.aarp.org/health/medicare-insurance/info-11-2009/part6_enrolling_in_Medicare_partd.html

http://www.kff.org/medicare/upload/7044-12.pdf

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