Learn How Medicare Works

Medicare is a federal health insurance program for United States citizens or legal residents of at least five years in a row who qualify for the program. That includes people 65 or older, people under 65 with certain disabilities, and people of any age with End-Stage Renal Disease (ESRD / permanent kidney failure requiring dialysis or a kidney transplant).

Medicare Part D, also called the Medicare prescription drug benefit, is a federal program that subsidizes the cost of prescription drugs to those individuals on Medicare A and/or Medicare B. It was enacted as a part of the Medicare Modernization Act of 2003 under President Bush and went into effect on January 1st, 2006.

Everyone who is entitled to Medicare benefits under Part A OR enrolled in Medicare Part B is eligible for Medicare D. However, you are not automatically enrolled in Medicare D coverage unless you are eligible for Medicare and Medicaid. All others must join a plan to receive coverage. Medicare Part D is a voluntary program that you may choose to purchase annually.

You can join a Medicare D plan any time during your initial enrollment period for Medicare. Generally, a Medicare beneficiary’s initial enrollment is a seven-month period: three months prior to becoming Medicare eligible, the month you are becoming Medicare eligible, and three months following the month you become Medicare eligible.

Congress designed Medicare D to work on an annual enrollment cycle: January 1st – December 31st. This means that each year, you will have the option to remain with your existing Medicare D plan or change plans between October 15th - December 7th for the upcoming January 1st effective date.

To get Medicare drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost, preferred pharmacies and drugs covered.

Late Enrollment Penalty

If you decide not to join a Medicare Prescription Drug Plan when you are first eligible, and you do not have other creditable prescription drug coverage, or you do not get Extra Help (a program based on low income) from the Federal Government (such as Medicaid), you will likely pay a late enrollment penalty. The penalty was designed to hold down the overall cost of the drug program and is similar to the penalty imposed for late enrollment in Medicare Part B. The late penalty equals one percent of the national base benchmark premium amount for each month that enrollment is delayed beyond your initial enrollment period. For example, if you delay enrollment in a Medicare D plan for two years, you will pay the regular monthly plan premium, plus 24% of the national base benchmark premium each month for the rest of your life.

It is important to review your Medicare D renewal information each year as the plans may change from year to year. These changes can include monthly premium, drugs covered, drugs not covered, co-payments, etc. If you want to make a change for the coming year it must be done between October 15th – December 7th.  If you do not make or wish to make a change, the plan renews automatically with the announced changes.

Please Note:

You may only be enrolled in one Medicare D plan at a time.

If you enroll in a stand-alone Medicare D plan while enrolled in a Medicare Advantage plan, you will be disenrolled automatically from the Medicare Advantage plan.

You can find out if you have Medicare Part A or Medicare Part B by looking at your Medicare card.