Do You Need a Medicare Prescription Drug Plan?
By: Source: AARP.org Date Posted: 2006-10-23 14:12:00-04:00
Even if your drug purchases are already covered through insurance or a program, you’ll want to know how this coverage compares to Medicare’s prescription drug coverage and determine whether your coverage is still right for you.
Or, if you don’t have prescription drug coverage and you’re not taking any medications right now or need them only occasionally, you may be wondering—is it worth signing up? After all, you would be paying premiums even if you didn’t need any prescriptions or if you don’t pay much for the drugs you now take.
One answer is that, like any insurance, drug coverage gives you protection against high drug costs if and when you need it. And, if you don’t have drug coverage from another source, there will likely be an added cost (late enrollment penalty) if you wait and enroll later than when you were first eligible.
The longer you wait, the more you will pay for Medicare drug coverage.
If you already have drug coverage...
You’ll want to compare your coverage with what you can get through a Medicare drug plan. Only then can you decide if you need to stay with your current coverage or choose a Medicare drug plan.
If you have coverage through your current job or a retiree benefit, this coverage may offer:
- Drug coverage outside of Medicare;
- Drug coverage through Medicare;
- A supplement to Medicare ’ s drug coverage such as help paying the premiums, coverage in the gap, or a lump-sum subsidy; or
- No help at all.
Your employer or union must send you a written notice telling you whether their coverage is at least as good as Medicare’s standard drug coverage. If it is, it is known as “creditable” coverage. You can keep this coverage if you wish. If your employer or union decides to stop offering creditable coverage in the future or the coverage changes so it is no longer at least as good as Medicare’s, you will pay a penalty if you sign up for a Medicare drug plan before going 63 days without coverage.
If the drug coverage offered is not at least as good as Medicare’s coverage, discuss your choices with your employer’s or union’s health plan administrator.
Before Making a Decision
If you are thinking about enrolling in a Medicare drug plan, it is very important to find out how your employer’s plan fits in with Medicare drug coverage--in particular, whether you can continue your medical and hospital coverage if you enroll in a Medicare drug plan. In some cases, joining a Medicare drug plan would automatically cancel your employer’s medical coverage. If you give up this coverage, you probably will not be able to get it back later. It also may affect health care coverage for other family members on your employer-sponsored health plan.
On the other hand, some employers insist that retirees and active workers over age 65 can keep their medical benefits only if they join a Medicare drug plan. So it’s important to check.
After a review of your health coverage, you may decide to drop your employer’s creditable drug coverage and enroll in a Medicare drug plan. You’ll need to check with your health plan’s administrator about when you can make this change in order to avoid paying a late enrollment penalty.
If you have drug coverage through a Medigap policy,* you cannot enroll in a Medicare drug plan. You have to choose. If you have a Medigap policy without drug coverage, you are free to join a Medicare drug plan.
Drug coverage through a Medigap policy is usually not as good as Medicare’s drug coverage. If you keep your Medigap drug coverage, you will probably pay a late enrollment penalty if you decide to enroll in a Medicare drug plan in the future. Although you can continue your Medigap policy with drug coverage, new Medigap policies sold after January 1, 2006, by law, cannot offer drug coverage.
Before Making a Decision
Carefully compare your Medigap policy to Medicare drug plans you’re considering. If you need assistance, contact your State Health Insurance Assistance Program.
*This is also known as a Medicare Supplement policy.
If you have Medicaid, you will be automatically enrolled in Medicare drug plan when you become eligible for Medicare. You will want to review whether the plan they choose for you provides all the drugs you need or lets you use your neighborhood pharmacy. As long as you are enrolled in Medicaid, you will be able to change to another plan up to one time a month, if necessary.
If you are in a state-run pharmacy assistance program, other than Medicaid, it may supplement Medicare’s coverage to give you even greater savings. Each state with a prescription drug assistance program works the coverage differently.
If you are in a drug manufacturer’s patient assistance program,** you may be able to continue to do so as well as have Medicare coverage – as long as you still qualify for the program. Check with the program. You will not be able to get the same drug from the assistance program and your Medicare drug plan. (You can use a drug manufacturer’s program to help pay for a drug you get from a Medicare drug plan while you’re in the coverage gap, but you can’t count this assistance towards your out-of-pocket expenses that would qualify you for catastrophic coverage.)
**These programs give you one or more drugs for free or at a reduced cost if you qualify.
If you have Veteran’s (VA) health benefits, TRICARE, or Federal Employees’ Health Benefits, your drug coverage may already be as good as Medicare’s. Your plan’s sponsor should give you a written statement telling you if your coverage is at least as good as Medicare’s standard drug coverage. You can be enrolled in a VA program and a Medicare drug program without losing VA benefits, and you can choose which plan pays for each of your drugs.
If you buy your drugs from another country…
You’ll want to consider these points:
- If you enroll in a Medicare drug plan, your plan will not cover drugs purchased from other countries. You may pay less for these drugs in the coverage gap by purchasing them from aboard, but they would not count toward your out-of-pocket maximum that qualifies you for catastrophic coverage if your drug costs become high enough.
- If your drug needs change and your total costs become very high, Medicare ’ s catastrophic coverage would give far greater protection than foreign prices.
Additional Resources
Medicare has created a plan finder tool to help you find a drug plan that meets your personal needs. Medicare representatives are also available by phone at 1-800-633-4227 (TTY 1-877-486-2048).
Allows you to access your personal information on Medicare benefits and services, including claim status and eligibility for preventive services.
State Health Insurance Assistance Programs
State Health Insurance Assistance Programs (SHIPs) have counselors that help you if you need individual assistance with Medicare issues. You can also call Medicare at 1-800-633-4227 to find a SHIP counselor in your state.
Drug Manufacturers’ Patient Assistance Programs
Drug Manufacturers’ Patient Assistance Programs provide free or low-cost drugs to people who need them. Each manufacturer develops its own program and determines who can receive the benefit and how.
State-Run Pharmacy Assistance Programs
State-Run Pharmacy Assistance Programs help people in over 20 states pay for prescription drugs. Programs operate differently in each state.
BenefitsCheckUp™ and BenefitsCheckUpRx™
These online tools list programs and services that help you pay for home heating, rent, meals, property taxes, prescription drugs and other important needs.
Additional Related Links
What Is Medicare Drug Coverage?
How to Compare Medicare Drug Plans
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