Why enroll in Medicare Part D?

In our last installment, we promised to talk more about prescription drug coverage (also known as Medicare Part D) because it’s one of the most confusing parts of Medicare. So, what are some of the key things you need to know when helping a loved one, such as a parent or spouse, enroll in Part D? First, unlike Original Medicare (Parts A and B), the program is voluntary—individuals can choose whether or not to participate in the Part D program. However, health insurance counselors recommend against this, as most beneficiaries need prescription drug coverage eventually (especially if they are not currently covered by an employer). Additionally, if your loved one chooses not to enroll in Part D when they first become eligible and then enrolls later (without qualifying for a Special Enrollment Period), they may have to pay a lifetime penalty for every month that they delayed enrollment. So if your grandmother tells you not to sign her up for Part D because she doesn’t want to pay that extra $30 per month “for a prescription she doesn’t need,” just keep in mind that she could be incurring a penalty if she decides to sign up later. You’ll also want to check back with her every year during Open Enrollment to see if her health situation has changed and she now needs a Part D plan. In summary, if your Medicare-eligible loved one needs prescription drug coverage and doesn’t have it, or will probably need it in the near future, you should strongly consider enrolling them in a Part D plan.

When you don’t need Part D: Creditable drug coverage & Part C plans

While many 65-year-olds would benefit from enrolling in a Part D plan, some older adults already have “creditable coverage” and don’t need a Part D plan right away. Creditable coverage means drug coverage from a non-Medicare provider that equals or exceeds what would be covered through a Part D plan. This includes people who are still working at age 65 and have employer coverage, people who have supplemental drug coverage from a retiree health plan, or veterans who are enrolled with the Veterans Administration and have their drugs prescribed by a VA physician. Be sure to get a certificate/letter of creditable coverage from the employer or organization in question so that you can still choose to enroll your loved one in Part D later if they lose their creditable coverage.

Additionally, if your family member has decided to join a Medicare Advantage (Part C) plan, then you probably do not need to choose a Part D program for them. Most Part C plans already include drug coverage. If you choose a Part C plan with drug coverage, make sure that the plan’s formulary (the list of drugs that the plans cover) includes all of your loved one’s medications.

Getting help with plan comparison

Clearly, choosing a Part D drug plan can be confusing. Some have annual deductibles in the range of $300 before the coverage kicks in; others offer first dollar coverage. Some are “good bets” if your loved one takes either no medication or only generics; others are more appropriate if the person who is being covered has specialized needs or a long list of medications that need to be tweaked on an ongoing basis.

This is where the Medicare Mini-Check tool (created by the non-profit National Council on Aging) comes in. It’s a free, brief assessment that helps you compare plans online, and can also connect you to free professional advice from a licensed Medicare advisor. Another great resource is the State Health Assistance Insurance Program (SHIP)—they provide free, one-on-one, federally funded Medicare counseling. As SHIP offices are primarily staffed by volunteers, it is wise to contact them early before the start of the busy Open Enrollment season (October 15-December 7) when anyone can choose or re-evaluate their Medicare plan. You can visit their website or call their toll-free national number at 1-877-839-2675. Not only can a SHIP counselor help you with choosing a plan, but some pharmacies have well-trained personnel who can use the www.medicare.gov website to give you a comparison of three different choices. Once you have a “saved drug list ID number” and a password date, it is relatively easy for you to check in each October during Open Enrollment to make sure that the drug plan you picked last year is still the right fit for your needs in the coming year. In addition, some states have what’s called a State Pharmaceutical Assistance Program. If your relative is relatively low-income—but doesn't qualify for Medicaid or other Federal subsidies—you may want to research whether the state they live in offers this method of “extra help.”

Re-evaluate Medicare Part D every year

The Open Enrollment period (when anyone can choose their Medicare plan for the first time or re-evaluate an existing one) occurs every year between October 15 and December 7. It is important to get into the habit of checking your loved one’s drug plan every year for a variety of reasons. First, plans can make major changes from year to year—prices can rise or fall; plans with no deductible can add one; formularies can change dramatically.

What is sometimes hardest to decide is whether a change in plans is worth it. Consumers with no prescriptions to cover may have picked a plan because it was the cheapest in their region. If the price goes up, should they change plans? Or is it easier to just pick something and stay with it? In general it helps if you set a benchmark—“I’ll only change plans if the overall price for the year is (fill in the blank) dollars higher than last year.” For example, you can use $100 or $150 or $250 as your benchmark.

Finally, keep in mind that in the area of drug plans, there is rarely a “wrong” choice. It may be more expensive than it needs to be, but in general having a Part D plan is better than not having one. Stuff happens, and you want to make sure that your loved one is covered for medications in case of an unexpected event like a heart attack or stroke. Take a deep breath and, when in doubt, call a SHIP counselor or 1-800-MEDICARE for advice on your next steps.