Retirement & Medicare Part D

Medicare Part D is the component of Medicare that offers elderly and disabled beneficiaries prescription drug coverage. Many of Medicare's beneficiaries are retired, so understanding how all of the parts of Medicare work with your retiree insurance can save you money and problems in the long run.

Creditable Coverage

• In order to avoid paying a Part D premium penalty down the line, a retiree prescription plan that is used instead of Part D must be proven as "creditable." This means it must be shown, in writing, to be as good as or better than Part D.

Premium Penalty

• If a beneficiary delays enrollment into Part D and his retiree drug coverage was not creditable, he will pay a premium penalty. The premium penalty is 1 percent of the national premium for each month that enrollment was delayed.

Federal and Military Retirees

• If federal or military retirees have any prescription drug coverage through TRICARE or the Federal Employees Health Benefits Program, they do not need to take Part D. If they decide they want Part D down they line, they can do so without penalty.

Other Retirees

• All other retirees must find out if their coverage is creditable and must determine how Part D will affect the rest of their retiree coverage before they decide to take Part D or not.

Other Considerations

• Some retiree drug plans may drop a beneficiary from their entire retiree insurance plan, including medical and hospital coverage, if they enroll in Part D.