*You may pay less if you are subject to the safe harbor rule because you didn't receive a cost of living adjustment from Social Security and depending on when you first enrolled in coverage.
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Medicare Part D is the federal government's prescription drug program that covers both brand-name and generic prescription drugs in every treatment class at participating pharmacies in your area. However, there are no Medicare prescription drug plans that cover all drugs. It's important to check your medications before deciding on a plan.
Prescription medications can be covered under Part B or Part D but never both. If your medication is delivered in a clinical setting it will be covered by Medicare Part B. If you self-administer your medications then they are covered under Part D. If your medications are very expensive you are probably better off seeing if you can get them adiminstered in a clinic.
Medicare Part D is administered as part of the Medicare Advantage program and has the same marketing rules about when you can change, add or drop coverage. The coverage is available to all people eligible for Medicare, regardless of income and resources, health status, or current prescription expenses. Medicare prescription drug coverage is especially valuable protection for people who have very high drug costs. You might qualify for "Extra Help", also known as the "Low Income Subsidy" or LIS if your income and cash assets are below certain thresholds.
Congress decided to make Medicare Part D a voluntary coverage, theoretically to control government costs but it is doubtful that has any impact on how much money is borrowed every year because Congress never permanently funded the program. Although the coverage is voluntary, as is Medicare Party B, Congress created penalties for people who delay enrolling to encourage the risk pools to be as complete as possible, something that does lower individual cost for the vast majority of people.
If you have employer based coverage your health insurer is required to notify you on an annual basis whether or not your coverage is creditable or not. Typically these notices come with other information that is sent annually. You would be well advised to review every section of your annual notices to keep up to date with changes in your coverage. Creditable means that it is considered to be as comprehensive or "good as" as Medicare. If you don't have creditable coverage through an employer or Medicare Part D and you at least have Medicare Part A then you may be subject to a permanent penalty when you do enroll of 1% of the cost of the Medicare standard plan for every month you didn't have coverage after you became eligible which typically is when you turn 65 years old.
The late enrollment penalty (LEP) is an amount added to your Medicare Part D monthly premium.
You may owe a late enrollment penalty if you go without a Medicare Prescription Drug Plan (Part D), or without a Medicare Advantage Plan (Part C) (like an HMO or PPO) or other Medicare health plan that offers Medicare prescription drug coverage, or without creditable prescription drug coverage for any continuous period of 63 days or more after your Initial Enrollment Period is over.
Read what Medicare has to say about the LEP Part D late enrollment penalty
Extra Help is related to an income standard managed by Social Security known as LIS or "Low Income Subsidy" People that qualify for Extra Healp don't pay the prescription drug plan deductible or gap payments and go straight to the "Catastrophic Coverage" part of the standard Medicare Prescription Drug Plan model.
Medicare prescription drug plans have four stages: a deductible, initial coverage limit, gap in coverage, and "catastrophic" coverage for people whose total spending reaches the numbers below. The coverage gap is scheduled to be completely phased out by 2020. The Medicare benchmark plan is revised annually to reflect the phasing out of the coverage gap passed by Congress and increased costs to keep the program stable.
You'll get an IRMAA notice if you have Medicare Part B and/or Part D and Social Security determines that any 'Income Related Monthly Adjustment Amounts' (IRMAA) apply to you. The notice includes information about Social Security's determination and appeal rights. This is a means tested additional premium depending on your income. If you are paying an additional amount for your Part B coverage then you can also expect to be assessed additional premiums for Part D coverage.
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Medicare starts at age 65 whether you are retiring or not. You may defer enrolling in Medicare Part B but be very sure you understand how Medicare rules apply to your individual case. If you don't have creditable coverage for health and prescription drug coverage from an employer then you should take out Part B when you turn 65 or you will accrue a permanent penalty of 10% of the Part B premium for every year that you don't have this coverage. Medicare redetermines the Medicare Part B premium every year. If you didn't have creditable coverage for ten years you would pay a penalty of100% of premium as a permanent penalty for your life or until you no longer participate in the coverage. If you have creditable coverage through an employee benefit plan then you can defer electing to get Part B Medical coverage as it is voluntary coverage and no penalty will accrue as long as you elect for Medicare Part B within 60 days of losing coverage through your employer.
If you work for a company with 20+ employees and have creditable employer based health insurance there is no penalty or waiting period to defer taking Medicare Part B. although, you may choose to do so. Employer based coverage is the only health insurance that is considered creditable for both Part B and Part D, both of which are voluntary. There is no penalty for not taking out the voluntary parts of Medicare as long as you have creditable coverage through an employer. COBRA is not considered creditable.
Medicare's secondary payer rules changed in 2016. Make sure you understand how Medicare works with your existing insurance as there is a good chance that it no longer pays the balance of your bills. If you get no added benefit for having two forms of health insurance you can chhose the one that provides the best value. You might find that coverage with a Medicare Supplement or Medicare Advantage plan has a lower total annual cost than what you are paying for through an employer and has better coverage.
Carefully consider changes to employer based health plans. If you leave employer based health insurance you might not be able to get it back if you cancel all parts of it. There can be a huge difference in the costs of medications on a Medicare plan compared to employer based coverage. Ask me for a comparison of all available plans that includes the total annual cost estimate to see if purchasing a Medicare plan on your own is right for you.
If either part of your insurance becomes secondary and you don't have complete underlying coverage you could end up paying for the full cost of outpatient procedures. Check with Human Resources or your insurer to verify that your coverage works the way you think it does.
If you are retired then your coverage through a retiree plan becomes secondary to Medicare so you must have both parts A and B. Medicare is not available on a family basis so the community spouse cannot join just because a beneficiary becomes eligible unless they are losing coverage at the same time and they have their own eligibility to enroll.
Even though you are paying for full coverage with an employee benefit plan, you might owe the deductible and 80% of the cost of covered services if you don't have Medicare after age 65. You may have up to eight months to sign up for Medicare after losing creditable coverage from a company that has 20 or more employees.
You may qualify for assistance to pay your Part B premium if you qualify for certain types of Medicaid.
Your Guide to Medicare’s Preventive Services is an official Medicare publication that contains information about how preventive services are paid for in Medicare. Talk to your doctor or health care provider. Your doctor or health care provider may do exams or tests that Medicare doesn’t cover. Your doctor or health care provider also may recommend that you have tests more or less often than Medicare covers them. Medicare pays for some diagnostic tests. A diagnostic test may be recommended when a screening test or exam shows an abnormality. In some cases, you may have to pay for these services.
Permanent residents of the U.S. do become eligible to participate in our Medicare System after they have lived here for five years. But, a move to the U.S. requires the senior age new residents to go naked of medical insurance for five frightful years. Contact me if you need assistance finding coverage for someone in this situation.
To keep reading about Medicare go to our Medicare Part D Page.