Medicare Part D Eligibility
Key Takeaways
- If you are eligible for Medicare, you are eligible for Part D prescription drug coverage.
- Signing up for Medicare Part D is optional.
- Signup for Part D is not automatic.
- People on Original Medicare can add a stand-alone Part D plan; people on Medicare Advantage can pick a plan that bundles Part D coverage.
- If you don’t have prescription drug coverage and don’t sign up for Part D, you will incur a monthly penalty for the life of your insurance.
Many people assume Original Medicare (Part A and Part B) automatically folds in coverage for prescription drugs, but this is not the case. If you’re Medicare-eligible, you must be proactive and take specific steps, such as signing up for Medicare Part D, to ensure you have coverage for your prescription drug needs.
Let’s face it — as we age, we tend to need more prescription drugs, even if we take great care of our health. Many older adults require daily medications for conditions such as arthritis, diabetes, high blood pressure and high cholesterol.
Even if you’re not taking medication now, you will likely need to do so at some point in your life. According to Georgetown University’s Health Policy Institute, prescription drug expenditures are highest for people aged 65 and older. If you don’t have prescription drug coverage, you can quickly go through hundreds or thousands of dollars annually, particularly if you have more than one health condition.
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Who Is Eligible for Medicare Part D?
If you’re eligible for Medicare, you’re eligible to sign up for a Medicare Part D (prescription drug) plan.
You must be enrolled in at least Part B of Original Medicare before you can get Part D.
Eligibility for Original Medicare is determined by age or disability. If you’re 65 or older and a U.S. citizen, you’re eligible for Original Medicare and Medicare Part D. If you’re a permanent legal resident, you’re also eligible, provided you’ve lived in the U.S. for at least five years.
People with specific disabilities are also eligible for Medicare, despite their age. Suppose you have received Social Security Disability benefits for 24 months. In that case, you are eligible for Medicare and Medicare Part D. If you have ALS (Lou Gehrig’s disease), you will be eligible for Medicare and Medicare Part D starting the first month you get a disability benefit payment. In addition, most people with end-stage renal disease can get Medicare and Medicare Part D.
Does Everyone With a Medicare Plan Get Part D?
Despite eligibility, not everyone with Original Medicare or a Medicare Advantage plan (Part C) gets Part D. Getting Part D is not automatic. Once you sign up for Original Medicare, you must decide to enroll in Medicare Part D plan. You may choose, instead, to get a Medicare Part C plan that includes Part D coverage.
Are Enrollment Periods for Part D the Same as Medicare Part A and Part B?
The enrollment periods for Part D are the same as they are for Medicare Part A and Medicare Part B. However, there are specific signup rules to be aware of.
Initial Enrollment Period
You can sign up for Part D when you’re newly eligible for Medicare. This is known as the Initial Enrollment Period. This is the best time to sign up for Part D, especially if you don’t have other creditable drug insurance. Signing up for Part D when you are newly eligible is the best way to ensure you won’t incur a late enrollment penalty fee.
For many Medicare-eligible beneficiaries, this first signup period is triggered by age. Initial enrollment has a seven-month duration. It begins three months before your 65th birthday, includes your birthday month, and continues for three months after your birthday has taken place. You’ll need to sign up for Original Medicare first.
Medicare Open Enrollment Period
- Runs annually from October 15 to December 7.
- You can join a Part D plan for the first time during this period, which is also known as the Annual Enrollment Period.
- You also can switch or drop an existing plan you have already purchased.
- Runs annually from January 1 to March 31.
- If you’re in a Medicare Advantage plan with or without, you can switch to a different Medicare Advantage plan with or without drug coverage.
- If you’re in a Medicare Advantage Plan, you can switch to Original Medicare and add a Part D plan.
- If you’re on Original Medicare, you can’t add a Part D plan or switch to another Part D plan. You also can’t switch to Medicare Advantage with or without drug coverage.
Is Medicare Part D Enrollment Mandatory?
Medicare Part D is not mandatory. It is up to you whether or not you will get coverage for prescription drugs.
If you are not sure whether or not you want Part D, weigh the pros and cons. Like all insurance, Part D coverage is designed to give you peace of mind. Not having prescription drug coverage may cost you financially and in terms of health over time.
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Can You Get Part D for Free?
Many Medicare Advantage plans include Part D for no additional monthly premium cost.
There are a few premium-free standalone Part D plans, but most require a monthly fee that varies by plan. The Part D premium is paid in addition to the Part B premium that all Medicare beneficiaries pay.
There are other costs typically associated with Part D. These include copays for medications and in some instances, deductibles.
Your Part D plan may require you to use in-network pharmacies. Some offer the option of using a low-cost mail-order pharmaceutical service. If you use an out-of-network provider, your medication copay will typically be higher than it would if you remain in-network.
Is There a Penalty for Not Signing Up for Part D?
If you don’t sign up for Part D when you’re first eligible and don’t have other creditable insurance, you will most likely incur a late enrollment penalty.
The Part D late enrollment penalty is not a one-time charge. Instead, it is an amount that follows you for life and is added monthly to your Part D premium or Part C plan for the duration of your coverage. Since it is a percentage based on the average beneficiary premium that people pay for Part D each year, it may also go up each year.
The late enrollment penalty amount is determined by how long you went without having prescription drug coverage, either through Medicare or another insurer.
Medicare calculates the penalty amount by multiplying 1% of the current national base beneficiary premium, times the number of full, uncovered months you went without prescription drug coverage. In 2024, the national base beneficiary premium was $34.70.
Sources
- Prescription Drugs. Georgetown University Health Policy Institute.
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