Medicare Part D Plans
Part D drug plans (either Stand Alone or in a Medicare Advanatge Plan) come with a drug formulary. A drug formulary is a list of prescription drugs, both generic and brand name, used by practitioners to identify drugs that offer the greatest overall value. A committee of independent, actively practicing physicians and pharmacists maintain the formulary. The formulary can change from time to time.
The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage.
Medicare calculates the penalty by multiplying 1% of the "national base beneficiary premium" ($32.74 in 2020) times the number of full, uncovered months you didn't have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium.
1. Join a Medicare drug plan when you're first eligible.
2. Don't go 63 days or more in a row without Medicare prescription drug coverage or other creditable drug coverage*.
3. Keep records showing when you had creditable drug coverage, and tell your plan about it.
* means that the coverage is expected to pay on average as much as the standard Medicare prescription drug coverage.
Medicare Part D is insurance for your medication needs. You pay a monthly premium to an insurance carrier for your Part D plan. You then use the carrier’s network of pharmacies to purchase your prescription medications. Instead of paying full price, you will pay a copay or percentage of the drug’s cost. The insurance company will pay the rest.
Part D drug plans are among the most confusing Medicare topics. All too often people join a plan without checking to make sure the formulary includes their medications. Sometimes they also miss that one of their medications has step therapy rules applied. Many beneficiaries also miss their initial enrollment window, so if you need drug coverage, be sure not to miss your window!
Part D drug plans also have changes from year to year. The plan’s benefits, formulary, pharmacy network, provider network, premium and/or co-payments/co-insurance may change on January 1st of each year. Medicare gives you an annual election period during which you can change your plan if you desire to do so.
There are specific times when you can enroll, dis-enroll, or make changes to your Medicare prescription drug coverage.
Medicare Advantage plans and Medicare Prescription Drug Plans are rated on a scale of 1 to 5 for overall quality and performance, with a 5-star rating being “excellent.”
If you are a member of a plan that does not hold a 5-star rating, you can use the 5-star Special Election Period to enroll in a Medicare Advantage with prescription drug coverage or a Medicare Prescription Drug Plan that has been awarded a 5-star rating outside of AEP. You can only use this enrollment period to enroll into a 5-star plan once per calendar year. This period runs from December 8 to November 30 of every year.