When Should You Get Part D to Avoid the Penalty?
The simple answer is that most people should get Medicare Part D coverage during their Medicare Initial Enrollment Period.
The more complicated answer is that if you have creditable drug coverage through an employer or qualify for Extra Help, you may delay without penalty. If you have creditable coverage with an employer, you’ll get a Special Enrollment Period and will need to enroll in Part D within 63 days of losing your creditable coverage.
Quickly understanding creditable coverage
What are those minimum standards for creditable prescription coverage? Creditable coverage means that the coverage is expected to pay on average as much as the standard Medicare prescription drug coverage.
If you have drug coverage through a group plan, that plan is required to tell you if your coverage is considered creditable. Medicare requires your plan to send you this information at least once a year. It may come in a standalone notice or in a letter or newsletter. Keep this information; you might need to provide it when you sign up for a Medicare drug plan later.
Your Options for Medicare Part D
You can get Part D in two different ways – a stand-alone part D plan or a Medicare Advantage plan that includes prescription coverage.
If you want a stand-alone Part D plan, you need to have Medicare Part A and/or Part B first. A Part D plan can be paired with Original Medicare (Parts A & B) and some Medicare Advantage plans, as well as other supplemental plans.
If you want a Medicare Advantage plan that includes prescription drug coverage, you will need to have both Medicare Part A and Part B first. Medicare Advantage plans with included drug coverage are known as MAPD plans. They are all-in-one plans that include Part A, Part B and Part D coverage as well as often also covering other health benefits such as dental or vision.
No matter what you decide, the bottom line is to know when you need to enroll. Again, if you have drug coverage that meets Medicare’s minimum standards you won’t pay a penalty for not signing up for Part D when you become eligible. If you don’t, you need to enroll in either a stand-alone Part D plan or a Medicare Advantage plan with drug coverage during your Initial Enrollment Period. A final reminder: people who qualify for Extra Help, a Social Security program for people with limited resources and income, will not be penalized.