Have you been wondering how and when to enroll in Part D? Not sure if it's right for you? In this video, we explain what Part D plans are and some of the reasons why people choose to sign up for Part D. Medicare Part D Plans are essentially pharmacy cards that give you lower cost medications. You enroll in a Part D plan through an insurance company in your home state. Instead of paying the full cost for your prescriptions, you will pay only the copays required by the plan.
Each year, there are many companies that offer Medicare Part D plan options. It is not uncommon for residents in each state to have 30 or more choices. Each insurance company sets its own price and drug formulary. It determines what the copays will be for each tier of medications. However, they do have to comply with federal requirements to ensure minimum essential levels of coverage. They must also submit their plan designs annually to Medicare for approval.
Part D is voluntary, which means each individual can decide whether or not to enroll. You should think about not just the medications you are taking now that you may need coverage for, but also those that you may need in the future. Also, just as with Medicare Part A and B, if you fail to enroll when first eligible, you may be subject to late enrollment penalties and waiting periods until you can into a plan.
How to apply for Medicare Part D is simple. You contact a broker who specializes in Medicare insurance. Part D applications can be tricky with various election periods to choose from. You don’t want to get any of this wrong or your application can easily be rejected. The help of an agent is free and will save you time and hassle.
While technically Medicare Part D is voluntary, there are some very important reasons why you should seriously consider enrolling.
If you fail to enroll in Part D during your initial enrollment period (when you first become eligible), may result in a late penalty. The penalty is waived if you have had other other creditable coverage for prescription drugs, such as through an employer group health plan. If not, then your penalty amount depends on how long you waited to enroll in a plan.
The penalty is calculated by Medicare as follows: 1% of the national average base Part D premium for every month that you went uncovered and did not have other creditable coverage. The penalty is rounded to the nearest $.10, and then added to the premium you pay for your new Part D premium.
The base premium is around $35, so if you had waited 50 months to enroll in Part D, you would have a penalty of 50% of $35 added to your chosen Part D plans’ premium. When you do finally enroll in Part D, you will pay the penalty for the rest of your life.
More importantly, if you miss your window, you cannot buy a drug plan mid-year without a special circumstance. Imagine if you develop a serious health condition in March and you need a very expensive medication for it. You would pay the full retail cost of that medication until the next Part D annual election period. This means you would have no coverage until January 1st. Remember that you are insuring your body here, which is more important than your car or your home. Consider the true risks of being uninsured.
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