What are Medicare Part D Plans (also known as Medicare Prescription Drug Coverage plans)?
Medicare prescription drug coverage is insurance approved by Medicare and offered by private insurance companies.
You can purchase Medicare Part D plans in either of two ways:
As a stand-alone Prescription Drug Plan (also called a PDP) or along with a Medicare Advantage plan (often called a MAPD). You get part or all of your Original Medicare coverage (Part A and Part B) as well as prescription drug coverage.
There may be a penalty if you don't join a Medicare Part D plan when you are first eligible. The late enrollment penalty is an amount added to your Part D monthly premium and may be assessed for one of the following reasons:
You did not join a Part D plan when first eligible and you did not have any other type of creditable drug coverage (such as from an employer).
You did not have Part D coverage or other creditable drug coverage for 63 or more days in a row.
The penalty for late enrollment in Medicare Part D Plans is calculated by 1% of the national average premium ($31.08 in 2012) times the number of full months that you were eligible but did not join a Part D plan or have other creditable coverage. The penalty amount is then rounded to the nearest $.10 and added to your monthly premium. You may be responsible for this penalty for as long as you have a Medicare Part D drug plan.
Based on your income, your Medicare Prescription Drug coverage premium may be higher. It does not matter if your Part D plan is attached to another Medicare insurance plan or not. If your Part D coverage is a stand-alone PDP or is attached to a Medicare Advantage Plan or a Medicare Cost Plan you may have to pay more. The premium is based on your modified adjusted gross income as reported on your IRS tax return from 2 years previous. If your AGI is above a certain amount, you will have to pay a higher premium. For more information, visit the Social Security's website.
If you get Extra Help, you don't pay a late enrollment penalty. Many people are unaware that they may qualify for Extra Help in paying for their Medicare Part D drug costs. If you qualify, you may get up to 95% of your Part D costs covered. Other programs like the "Medicare Savings Programs" may help in paying you're your prescription drug costs.
To purchase a Medicare Prescription drug plan, first you must be age 64.5 or otherwise qualify for Medicare. Then to join a stand-alone Medicare Part D Drug Plan, you must have Medicare Part A or Part B. To join a MAPD, you must have both Part A and Part B, and you must also live within the service area of the plan you wish to join.
If you are still working and have employer or union coverage, do not make any changes until you check with your benefits administrator. When you join a Medicare Prescription Drug plan, you will need to provide your Medicare number and your Part A and/or Part B start date. This information can be found on your red, white and blue Original Medicare card. The Medicare Drug Plan Finder at www.Medicare.gov has information to help you compare plans in your area. The costs and coverages of Medicare Part D Plans vary with each plan.
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