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the medicare drug plan
6 Key Facts

1. Anyone on Medicare can get coverage regardless of income or health.

2. You are not obligated to enroll, but there may be consequences if you don't sign up when you are first eligible to do so.

3. To get Medicare drug coverage, you must select one approved private drug plan among many offering different choices. There is no single government plan.

4. Is your income limited? If you qualify for a part of the program known as "Extra Help." you'll pay very little for your medications.

5. Are your drug costs very high? You'll pay no more than 5 percent of the cost of each prescription after you've spent a certain amount of money out-of-pocket in any one year.

6. Do you have better drug coverage already? You probably won't need Medicare's Part D coverage. But it's wise to check.

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Medicare Prescription Drug Coverage Plan

Part 4: Do You Need Medicare Part D?

Considering all your options

I get my drugs from the Native American health service. Do I need Part D?

Drug coverage under the Indian Health Service, the Urban Indian Health program or a Tribal Health Organization is at least as good as Medicare, so you don’t need to join Part D. Even if you currently get free or low-cost drugs under one of these programs, you’re not required to join Part D. But if you do so, especially if you qualify for Part D’s Extra Help program, you would help your community by stretching the federal dollars that support your local clinic. If you’ll soon be turning 65, contact your clinic or the benefits administrator of your health program to discuss the implications of joining Part D.

What if I have medigap insurance?

If your medigap policy (also known as Medicare supplement insurance) does not help pay for drugs, it won’t be affected by Medicare drug coverage. Medigap policies that include drug coverage are no longer sold but if you still have one of these older ones (which are labeled H, I or J) these are your options:

  • You can keep your policy’s drug coverage if you choose, but you cannot also have Medicare drug coverage at the same time. Most medigap policies are not “creditable” — meaning they do not offer drug coverage as good as Medicare — so you’d pay a late penalty if you decide to join Part D in the future.

  • You can keep your policy but drop its drug coverage (or switch to a different medigap policy that does not cover drugs) and instead get your drugs through a Medicare Part D plan. Your medigap premium would then be reduced.

Note: You cannot use medigap insurance to pay out-of-pocket costs in Medicare drug coverage. Also, bear in mind that the law prohibited any new medigap policies covering drugs to be sold since Jan. 1, 2006. As fewer and fewer people will be enrolled in them over time, premiums are likely to increase.

I get my drugs from my state Medicaid program. What happens when I turn 65?

As soon as you become eligible for Medicare, you must get your drugs from Medicare’s Part D program, not from Medicaid. You automatically qualify for Part D’s low-cost Extra Help program. (See Extra Help for People with Limited Incomes.) Medicare will enroll you in a Part D drug plan — which may not meet your needs — unless you choose one for yourself. Under Extra Help, you have the right to switch to another plan at any time. For information and help, contact your state health insurance assistance program (SHIP).

I get my drugs from a state pharmacy assistance program. Will this change when I get to Medicare age?

If your state pharmacy assistance program (SPAP) is regarded by Medicare as “qualified” — meaning they meet Medicare’s requirements — you can stay in the program and continue to get drug benefits that are better than Medicare drug coverage. But your SPAP will require you to join Part D and probably also to apply for Extra Help. If your SPAP is not “qualified” in this way, it does not count as insurance and you’d need to join Part D as soon as you’re eligible for Medicare to avoid a late penalty. Call your SPAP for more information.

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