Medicare Part D is a federal prescription drug program managed by private insurance companies. Medicare beneficiaries can either enroll in a standalone Part D plan to enhance their Original Medicare benefits or choose a Medicare Advantage (Part C) plan that includes prescription drug coverage.
Prescription drug coverage is exclusively available through Part D plans or Medicare Advantage Prescription Drug plans (MAPD). Original Medicare (Parts A and B) does not cover medications typically obtained at your local pharmacy. Part D plans require a separate monthly premium and come with their own deductibles, copayments, and coinsurance costs.
Upon enrolling in a Part D plan, you’ll receive a distinct Part D insurance card, which you’ll need to present when refilling your prescriptions.
Medicare consists of four parts: A, B, C, and D. Parts A and B, known as Original Medicare, cover inpatient and outpatient medical costs, including some intravenous medications. However, they do not cover the prescriptions you typically get at your pharmacy.
Medicare Part C, or Medicare Advantage, includes various plans, some of which cover prescription drugs. These are called Medicare Advantage Prescription Drug plans (MAPD). If your Medicare Advantage plan includes prescription drug coverage, you do not need a separate Part D plan.
For those without an MAPD plan, a standalone Part D plan is essential for covering prescriptions obtained at the pharmacy. The only exception might be if you have prescription benefits through VA Healthcare or TRICARE for Life.
Even if you aren’t currently taking any prescriptions, enrolling in a Part D plan as soon as you are eligible is crucial. This is important for two reasons:
Enrolling in a Part D plan ensures you have the coverage you need for prescription medications and avoids penalties and gaps in coverage.
One of the most commonly encountered penalties in Medicare is the Part D penalty. Many people mistakenly believe that if they aren’t currently taking any medications, they don’t need to enroll in a prescription drug plan. This misconception can lead to costly penalties down the road.
If you go without prescription drug coverage for more than 63 consecutive days, you start accumulating a Part D penalty. Each month without coverage adds to the penalty, and once you enroll in a Part D plan, you’ll have to pay this penalty every month. Unfortunately, the penalty lasts as long as you have a Part D plan, which could be for the rest of your life.
