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About Enrollment for Part D Medicare Benefits

Anyone with Medicare---Part A, Part B or both---is automatically eligible for Medicare Part D prescription drug coverage. There are no exclusions based on income, current health or current prescription costs.

  1. Timing

    • You can enroll in a Part D prescription drug plan (PDP) when you first become eligible to apply for Medicare: from three months before until three months after your 65th birthday. If you don't enroll when you are first eligible, you may enroll during the open enrollment period between November 15 and December 31 each year. If you receive Medicare because of a disability, you first become eligible for Part D three months before and three months after your 25th month of disability payments.

    Warning

    • If you don't enroll when you are first eligible, you may be assessed a penalty if you try to join a plan later. As of 2009, the penalty is 1 percent of the base price for every month you delay enrolling.

    Information Sources

    • Detailed information is available through the Medicare homepage: http://www.medicare.gov/pdphome.asp. The Medicare website also includes a PDP finder. Persons with low income can get extra help in obtaining Part D coverage. Information is available at http:www.socialsecurity.gov.

    Features

    • All PDPs pay benefits according to four annual coverage points: the deductible (you pay 100 percent); the initial benefit period (you pay 25 percent of the drug costs); the coverage gap, often called the doughnut hole (you pay 100 percent of the drug costs); the catastrophic level (you pay 10 percent or less of the drug costs). If you pay higher premiums, you can lower the deductible (it can't be higher than $310 for 2010) or get some coverage during the doughnut hole.

    Key Detail

    • It's important to understand the doughnut hole. You enter the doughnut hole, which means you will receive no benefits from your drug plan, after the total of the drug costs paid by you and the plan hit a certain annual figure--$2,520 for 2010. You exit the hole based only on your total out-of-pocket costs. For 2010, that means you will pay the next $3,610 in drug costs with no help from your plan.

    Consideration

    • According to most analysts, if a Medicare participant spends as little as $68 each month on prescription drugs, she would break even by enrolling in a Part D plan with a monthly premium of $35. A lower premium or higher drug costs would tilt the equation in favor of the participant.

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