How to Enroll in a Prescription Drug Plan
You have been able to enroll in a Prescription Drug Plan since The Medicare Prescription Drug Improvement and Modernization Act of 2003. The legislation created new drug coverage options for seniors. Specifically, it added Medicare Part C and Part D.
Your Prescription Drug Coverage Options
Your first step is to decide on the type of coverage you want. There are two options. You can enroll in a stand-alone Prescription Drug Plan (Part D) or receive drug benefits through a Medicare Advantage Plan (Part C).
Option 1: Enroll in a Prescription Drug Plan
A stand-alone Prescription Drug Plan or Medicare Part D, often called a PDP, only offers drug coverage. A plan can be purchased in addition to your Original Medicare benefits, or used in conjunction with Medicare Supplement coverage.
Option 2: Enroll in a Medicare Advantage Plan with Drug Coverage
Under Medicare Part C, you can enroll in a Medicare Advantage Plan with prescription drug benefits. These types of plans are commonly called MAPD plans. With this type of insurance, you receive healthcare and prescription drug coverage in one plan.
Joining a Drug Plan May Affect Your Medicare Advantage Coverage
If you have a Medicare Advantage (MA) Plan, that does not offer drug coverage; you can also purchase a stand-alone PDP. However, if you have an MA Plan with drug coverage, and you enroll in a PDP, you will lose your MA coverage and return to Original Medicare Parts A, and B. Be sure to understand your current MA benefits before purchasing a Prescription Drug Plan.
All Prescription Drug Coverage Must Meet a Minimum Standard
Each year Medicare releases the minimum standard requirements for Prescription Drug Plans and Medicare Advantage Plans that offer coverage. The table below shows the coverage areas and amounts for 2016. Often, plans will have benefits beyond the minimum outlined by Medicare.
Minimum Standard Prescription Drug Plan Benefits 2016
| Total Annual Prescription Drug Spending | Coverage Periods | You pay |
|---|---|---|
| $0 – $360 | Deductible Period | You pay 100% |
| $360 – $3,310 | Drug Coverage Begins | You pay coinsurance of 25% |
| $3,310 – $7,062.50 | The Donut Hole | You pay 45% for brand name drugs and 58% for generics |
| $7,0652.50 and above | Catastrophic Coverage | You pay coinsurance of 5% |
How to Enroll in a Prescription Drug Plan
Once you have decided on the coverage option you want, it’s easy to enroll in a Prescription Drug Plan. You have five options.
- Enroll on the plans website
- Call the plan
- Complete a paper enrollment form
- Call 1-800-MEDICARE (1-800-633-4227)
- Work with an agent to enroll in a Prescription Drug Plan
Regardless of your method of enrollment, premiums will always be the same for the same plan. For this reason, we recommend working with an agent experienced with this type of coverage. An agent can explain your different options, along with a plan’s benefits and limitations.
How to Switch Prescription Drug Plans
If you are in an Enrollment Period and switching plans is allowed, the process is easy. Just enroll in a new plan. Automatically your old coverage will be canceled. I recommend joining well in advance of your desired effective date. By planning ahead, you can avoid any gaps in your Prescription Drug Coverage.
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