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Medicare Basics

Medicare Part D

What Is Medicare Part D?

Medicare Part D, also known as Medicare Prescription Drug Coverage, is available to every Medicare beneficiary. This coverage helps beneficiaries pay for covered prescription drugs bought at certain centers, including retail locations and pharmacies. This benefit could help reduce prescription drug costs significantly.

If you don’t choose a Medicare Part D plan when you become eligible, and you don’t enroll in a Medicare Part C plan (Medicare Advantage) that includes prescription drug coverage, you could pay a late enrollment penalty if you try to join later. Exceptions exist if you have creditable prescription drug coverage or if you receive Extra Help.

Medicare Part D plans:

  • Are provided by an insurance company or other private company approved by Medicare
  • Can be offered as stand-alone plans or as part of a Medicare Advantage plan
  • Carry a late enrollment penalty if you do not sign up for Medicare Prescription Drug Coverage when you first become eligible and go more than 63 days without creditable coverage

Part D Enrollment

Medicare Part D adds prescription drug coverage to your Medicare Parts A and B, some Medicare Cost Plans, some Medicare Private Fee-for-Service Plans, and Medicare Medical Savings Account Plans. They are offered by insurance companies and other Medicare-approved private insurers. The cost of each plan depends on the provider and your location.

The Medicare Advantage and Prescription Drug Plan Annual Enrollment Period (AEP) takes place from October 15 to December 7 each year. During this period, you can get a prescription drug plan or a Medicare Part C plan. If you are about to turn 65 or otherwise become eligible for Medicare outside of the AEP, you have seven months to enroll in the following year’s plan in order to avoid a Late Enrollment Penalty.

Those seven months consist of:

  • The three months before your 65th birthday
  • The month of your birthday
  • The three months after your birthday

Coverage begins on the first day of your birthday month if you enroll during the three months before your birthday. If you join during or after your birthday month, your coverage begins on the first day of the month after you enroll.