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Information about all aspects of finances affected by a serious health condition. Includes income sources such as work, investments, and private and government disability programs, and expenses such as medical bills, and how to deal with financial problems.
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Whether you should enroll in Medicare Part D is a personal choice (unless you have Medicaid, in which case it is mandatory.)

As a person with a medical history, even if you are using few drugs now, it is worthwhile to have insurance against the possible need for high cost drugs.

If you are not currently spending a lot on drugs, if you do need drugs, or if drug costs increase, you'll have help paying for them. Also consider:

  • What drug coverage you now have, if any
  • The cost of Part D coverage
  • The cost of your drugs

If you have drug coverage at least as good or better, it may be better to keep it and not purchase Medicare Part D. You can purchase Part D at a later date without penalty because your coverage is "creditable" (see below).

If you do not have equivalent coverage, there is a penalty of at least an extra 1% of the national average premium which is added to your premium for each month you delay. This penalty (which increases each year along with the average premium) continues for as long as you have Medicare drug coverage.

You can tell if your coverage is at least as good as Medicare's because the plan you have is supposed to inform you whether your coverage is "creditable" -- which means it is at least as good as the Medicare coverage. If you didn't get the notice, call and ask for one.

Some special circumstances to consider are:

For more information see:

If You Have Drug Coverage (Creditable Coverage)

If existing drug coverage is at least as good as the coverage provided by Medicare Part D, it is known as "creditable." So long as you have creditable coverage, there is no penalty for delaying purchasing drug coverage.

Creditable coverage can come through your own policy (either on your own or through a group such as an employer) or a spouse's coverage. Tricare counts as creditable coverage. Medigap drug coverage doesn't count.

You'll know if your coverage is as good as Medicare Part D because you should receive a notice from the entity that supplies your current coverage which will tell you if what you have is as good as Part D coverage. It doesn't matter where you have your current coverage - including through an employer or a union. If you didn't receive a notice: call and ask for it. It must be provided to you in writing.

If you rely on the creditability of another plan, keep a copy of the notice with your Medicare file so you'll have it if you need it.

Some coverage which are known to be Creditable follow. If you have any of these coverages and decide in the future to take Mc drug benefit, there will not be any penalty.

  • VA benefits.
  • Tricare. Note that this is different from medical coverage under Tricare which sometimes requires that you have Part D. If Tricare is better, consider not purchasing Part D. If not, and you do purchase Part D coverage, Part D will pay claims first. Tricare will pay second like other secondary insurance. (To learn more, see: Coordination Of Benefits.)
  • Federal employee health benefits. Common wisdom is there is no reason to purchase Part D coverage if you have federal employee health benefits. If you are a federal retiree, and decide to purchase Part D, Part D will pay first. The federal plan will pay second. If you are a current employee, the federal plan pays first, and Part D pays second.

Creditable coverage is coverage that is at least as good as Medicare Part D.

If you know creditable coverage is about to end, start looking at what drug coverage is best for you. If you delay more than 62 days after the end of creditable coverage to obtain drug coverage, you will be subject to the penalty for late enrollment.

If You Have Medigap (Medicare Supplement Insurance)

You can keep your Medigap coverage.

If your policy doesn't cover drugs, it won't be affected.

If your policy does cover drugs:

  • You cannot also enroll in a Medicare drug plan.
  • If your drug coverage is as good as the Medicare drug coverage, the coverage is "creditable." You will not be penalized later if you drop the coverage and transfer to Medicare drug coverage. There are few plans that could qualify.
  • If your drug coverage is not as good as the Medicare drug coverage, it is not "creditable." If you later drop it, and pick up the Medicare drug coverage, you will be subjected to the penalty for late enrollment.

NOTE: New Medigap policies are no longer allowed to include drug coverage.

If You Get Your Drugs Through A Drug Manufacturer's Patient-Assistance Program

From Medicare’s point of view, you can continue to get your drugs through the program. However, check with the program. Most programs do not cover people who have other drug coverage.

If you can’t have both, do the math to find out which is most beneficial for you.

What If I Choose Not To Purchase Medicare Part D Coverage?

If you currently have Creditable coverage with coverage at least as good as Medicare Part D: you can enroll in Part D later with no penalty provided that you sign up within 63 days of losing or dropping your current drug coverage through no fault of your own. If you lose the coverage because you fail to pay the premiums, that is your own fault and you will be subjected to a penalty.

If your current coverage is not as good as Medicare Part D, or you lose it through your own fault, or there is a gap of more than 63 days between coverages, you will pay a penalty.

  • The penalty is a higher monthly premium that you pay as long as you have drug coverage.
  • The penalty equals 1% of the average national drug premium for every month you went without creditable coverage. For example, let's make the numbers easy and say the cover of an average plan is $25 a month. That would mean there would be an addition of 25 cents (1% of $25) a month to add to your premium as long as you have drug coverage. If you do not enroll for four months, that becomes an extra dollar a month. Eight months equals $2. a month. Although the penalty is small, the amount can add up.

Alternative means to consider to obtain drug coverage are the following:

  • Qualify for Medicaid which includes drug coverage if your income and assets are limited enough. (To learn more, see Medicaid.)
  • Check out state assistance drug programs in the state in which you reside. If you have HIV, look at ADAP.

What I Purchase All My Drugs Abroad?

Consider purchasing an inexpensive Part D Plan to keep the penalty from occurring in case there’s a change. For example, the drug you need is not available abroad, you need different drugs, or the value of the other currency increases.

If You Are In A Medicare Advantage Plan That Provides Drug Coverage

You can continue in the Medicare Advantage Plan.

Still, every year, it is worth comparing the benefits in your plan against the other alternatives available to you.

Keep in mind other features of the Medicare Advantage Plan as well – such as whether by making a change you would still be able to see your doctor(s).