Part D is the part of Medicare that covers prescription drugs. Prescriptions are not covered under Medicare Supplement plans, so to have Rx coverage, you must sign up for a separate Part D plan through Medicare (Medicare can enroll you in a plan by phone or online) or through one of the private companies that sell the plans.
Medicare gives you a 7-month initial enrollment period in which you should sign up for a plan. Signing up during this time frame prevents you from paying the Medicare late enrollment penalty for Part D. This penalty is 1% of the Part D premium average per month you were not enrolled in a plan. For example, if you delay enrolling in a plan for 12 months after your initial enrollment period ends, you would pay a 12% penatly when you DO sign up for a plan. This is Medicare’s design to prevent all of the “healthy” people who don’t need prescriptions from foregoing the Part D program altogether. Also, Medicare has an annual election period for enrolling in the plans, so if you do not sign up when first eligible, you would have to wait until the next enrollment period to sign up which could be problematic. So, overall, Medicare makes it important to sign up for a plan even if you are in good health and don’t necessarily need a plan at this time.
That said, if you are healthy and not on many, or any, medications, you may want to consider the following strategies for saving a little money on your Part D costs:
- First of all, and most importantly, you could, or maybe should, delay signing up until towards the end of your initial enrollment period. Your enrollment period is the month you turn 65 and three months on either side of it. However, the penalty for late enrollment in Part D does not accrue until the enrollment period ends. So at the least, you can save yourself a few months premium (assuming you don’t NEED a plan) by waiting until the end of that 7-month period to sign up for a plan. NOTE: Make sure you don’t go too long and miss the enrollment period – there’s no flexibility on this.
- Second of all, you should choose one of the lower-premium plans, with the knowledge that you can always “upgrade” your plan at a later time. Typically, the lower premium plans do have a deductible, but if you are in good health, this is a small price to pay to save money on the premium and avoid the future penalty.
- Lastly, if you do get on generic medications or are on them now, you can sometimes get the medications “off plan” than you can get them through the plan. This is an avenue to explore.
If you have any questions about Part D, Medicare, or Medicare-Supplement.US, please contact us online or call 877.506.3378.