Medicare Parts A and Part B (Original Medicare) cover hospital and medical expenses, but they do not provide prescription drug coverage. Drug coverage is provided through an optional Medicare Part D plan, and while Medicare Part D enrollment is easy, there are a few guidelines to keep in mind.
When Can You Enroll In Medicare Part D?
To enroll in a Medicare drug plan, you must first be enrolled in Medicare Parts A and B. There are three times when Medicare Part D enrollment is permitted. These are:
1. Initial Enrollment Period
This is the first eligible Medicare part D enrollment period and begins three months before the month of your 65th birthday and continues for three months following your birthday.
2. Open Enrollment
An annual open Medicare Part D enrollment period that runs from October 15 through December 7.
3. Medicare Part D Special Enrollment Period
Under certain conditions, you may be allowed to enroll in a drug plan during the Medicare Part D Special Enrollment period.
Your circumstances will dictate when Medicare Part D enrollment works for you, but keep in mind that there may be penalties for late enrollment.
How To Enroll In Medicare Prescription Drug Coverage
Medicare Part D enrollment can be accomplished in three ways during one of the allowed enrollment periods:
- Contact Medicare at 1-800-Medicare (1-800-633-4227) and speak to a counselor who will explain options and help you enroll.
- Go to Medicare.gov online and use the Plan Finder tool.
- Contact the plan provider (insurance company) and speak to their representative to receive information and enroll.
Remember that Medicare drug plan premiums can be deducted from your Social Security check or sent by you directly to the insurance provider.
When Can You Change Your Medicare Drug Plan?
You may change your Medicare drug plan during the annual Fall Open Enrollment, October 15 through December 7. During this period you can:
- Enroll or change Medicare Advantage plans or change to Original Medicare.
- Change to a Medicare Advantage plan that offers prescription drug coverage or to one that does not offer drug coverage.
- Enroll in a Medicare drug plan through an insurance provider.
- Change to another Medicare drug plan.
- Eliminate prescription drug coverage.
Medicare Advantage Disenrollment Period (MADP)
The Medicare Advantage Disenrollment Period runs from January 1 through February 14 each year. During the Medicare Advantage Disenrollment Period, you can:
- Change from Medicare Advantage to Original Medicare.
- Add a Medicare drug plan if you change to Original Medicare during this period.
Your Medicare Part D enrollment coverage begins the first day of the month after your enrollment form is received.
Keep in mind that during the Medicare Advantage Disenrollment period you cannot:
- Change to a Medicare Advantage Plan if you have Original Medicare.
- Change Medicare Advantage Plans.
- Change your Medicare Prescription Drug Plan to a different one.
- Enroll in, change, or drop a Medicare Medical Savings Account (MSA) Plan.
Medicare Part D Special Enrollment Period
Certain conditions apply to the Medicare Part D Special Enrollment period. One or more of these situations must occur for Medicare Part D special enrollment to be permitted:
- You lost your Medicare Part D prescription drug coverage, and you are not to blame for the loss.
- Your residence location changes and your plan does not cover the new location.
- Better plans are available in the area, you moved into or from a skilled nursing or long-term care facility, or you were released from jail.
- Other coverage is offered through work, a union, the Program of All-Inclusive Care for the Elderly (PACE) or the Veterans Administration, or you leave such coverage.
- Your plan is sanctioned or canceled by Medicare for not abiding by its contractor fails to provide benefits specified in the contract.
- You end your Medicare Advantage Plan and choose to enroll in Original Medicare within the first year of enrolling in Medicare Advantage.
- You want to upgrade to a Medicare-rated five-star drug plan that services your area.
- You enroll in or lose enrollment in Medicare's Extra Help program, or Medicare Part D Low Income Subsidy (LIS).
- You are misinformed about the benefits of your existing drug coverage plan or private coverage that was supposed to be as good as a Medicare drug plan.
- A federal employee's error caused you to delay, fail to enroll or to enroll in the wrong plan.
- You are enrolled in or leave a Special Needs Plan (SNP).
Make sure you qualify for the Medicare Part D special enrollment period, before canceling or changing any current prescription drug plan.
Penalty For Late Enrollment
If you fail to enroll in a drug plan during the Initial Medicare Part D Enrollment Period, you may be subject to a late enrollment penalty. The penalty is added to the monthly Part D premium and applies if for 63 days or more following your Initial Enrollment Period ends, and any time after that, you do not have:
- A Medicare Part D Plan
- A Medicare Advantage Plan
- Some other plan that offers Medicare prescription drug coverage
- Prescription drug coverage through an employer, union or other entity that provides drug coverage equivalent to Medicare drug plans
The monthly late penalty is equal to 1% of the national average Part D premium multiplied by the number of months you did not have drug coverage. For Example, if you postponed Medicare Part D enrollment for six months after your Initial Enrollment Period, the penalty would be calculated as follows:
National Base Average Premium x 1% (.01) x Number Of Months Without Drug Coverage
$35.02 (2018 National Base Average Premium) x 0.01 x 6 months = $2.10
In this case, $2.10 would be added to the monthly Part D premium and would remain part of the premium for the entire time you have a Medicare Part D plan.
Remember that the penalty may also apply to those who wait until Open Enrollment to select a Medicare Part D plan for the first time.
How To Avoid Late Enrollment Penalties
There are three ways to avoid the penalty for late Medicare Part D enrollment:
- Makes sure you enroll during your Initial Medicare Part D Enrollment Period
- Make sure you do not go 63 days or more at any time without a Medicare drug plan or equivalent creditable coverage
- Make sure your drug plan provider is aware of any creditable prior coverage you had if they ask.
Enrollment in Medicare prescription drug coverage is easy. To avoid late penalties, take advantage of the Medicare Part D enrollment period that best fits your circumstances.
